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EA's Riccitiello: 'Nintendo Isn't Trying To Dominate The Platform'
EA's Riccitiello: 'Nintendo Isn't Trying To Dominate The Platform' Exclusive
June 9, 2009 | By Leigh Alexander

Despite Nintendo's overwhelming success, questions often linger over whether the proliferation of Wii has benefited third parties nearly as much as it should, as publishers appear challenged to make regular hits on the platform.

Like many publishers who felt the sting of an overcrowded holiday 2008 on the next-gen platforms, Electronic Arts has made an increased focus on Wii a core component of its product strategy for 2009. EA's efforts have already begun to bear fruit, with the 600,000-unit launch of EA Sports Active on Wii.

"That's our best launch so far on the Wii," EA CEO John Riccitiello tells Gamasutra. "It's the first time a third party has been number one on the Wii platform two weeks in a row."

It's clear why this is an important success: "The number one platform is expanding the market, and growing," says Riccitiello. "Having a lead position there seems like an obvious thing for us to do."

Keys To Wii Success

So how did EA break through? "I think we realized what it takes to be successful on the platform," Riccitiello says. "No ports and pushes -- do things that optimize against the controller system inherent in the wand and nunchuk."

For example, the company hopes it will make similar strides with its upcoming Harry Potter title's wand-based mechanic, which lends itself to the Wii remote, and EA's Tiger Woods PGA Tour 09 and Grand Slam Tennis will be among the first games to leverage the new Wii Motion Plus peripheral for its swing mechanics that Riccitiello says "are better on a platform like the Wii than alternatives." EA Sports Active has been successful in part because it's "clearly enabled by the technology."

New marketing initiatives also help build a presence on Wii, Riccitiello asserts, and in the coming year EA plans on "speaking differently to this consumer." Small changes -- like advertising that focuses on showing the consumer interacting with the product and not just footage of the game itself -- are important to attracting the Wii's more casual audience, says Riccitiello.

So in Riccitiello's opinion, Nintendo's not failing to support third parties on Wii. "If [Nintendo] was an independent third party, it would be a rival to EA as the number one packaged goods game company -- on their own platform, it concentrates."

"We've been, in years past, able to do a 20 percent share on Nintendo platforms, comparable to our share on PlayStation 3 and Xbox 360," he says. "We had a 13 percent share last year with a product lineup that I thought was... good, in certain cases. Now, our product lineup in [fiscal] Q1 is better than our entire 2008 product lineup, for Wii specifically. That lineup, well-supported, will be really successful."

"For what it's worth, Nintendo isn't trying to dominate the platform -- they're trying to have their platform dominate the world. It's a different objective."

On The Way To A Turnaround

Now that the company's focusing more on its Wii strategy, Riccitiello expects EA to continue narrowing its losses and improving the company's outlook as the publisher has done since it announced aggressive cost-cutting earlier this year.

"We needed to address quality, Wii, and direct-to-consumer business models," says Riccitiello. "I think we've addressed all three now in a really good way. Our cost structure was too high... but it needed to be done in a certain order. If I'd left quality unaddressed and Nintendo unaddressed, I don't think I'd have a situation where any cost structure would have worked."

"When we hit the wall last year, in a weird sort of way I think it was an opportunity to right the cost structure all at once," he adds.

The Economy's Permanent Mark

Even with the extenuating circumstance of the larger macroenconomic climate, Riccitiello still feels confident about the road ahead for EA and the industry at large thanks to new business models and new consumers.

"I don't think our industry is ever going to be like it used to be," he says. "There are close to several hundred million gamers in the world. It's a big market now, and it's going to be a bigger market."

He says the recession has had a permanent effect. "I'm not sure the consumer is ever going to come back the way they did," he says. "Big-ticket item disposables are going to be pretty hard hit -- I'm just glad I'm not in the restaurant business, or the travel business! I'm really glad people stay home and need something to do, because I think what they're going to do is play video games."

Shifting To Software-As-Service

To adapt, publishers will need to focus a greater share of their attention on business models previously thought of as minority or emergent, says Riccitiello.

"The industry has traditionally been 80 percent-plus console," he says. But over the next two years, he expects console software to comprise only about 50 percent of total revenues, with a combination of subscription and microtransactions models, mobile downloads, casual gaming and PC titles to comprise the other half.

"Presently, we are packaged goods with strong service components," he says, noting that EA and other industry companies are already extending the life of packaged products and their relationship with the consumer through post-release DLC content and persistent online modes that receive continuous updates.

"Within a year or so, we're going to feel more like services enabled by packaged goods," he predicts. "Services are the Nirvana that I'm trying to get to, because I think it's better for the consumer; there's more value in the dynamism of a service."

Last year, Riccitiello says EA's NBA Live received "several hundred" updates to keep current with the stats of real basketball games, and the company plans to maintain a similar level of dedication to its other online-enabled titles. "That's what's happening with The Sims 3, that's what's happening with most of our games."

"It's hard to do, this new approach to building products and supporting them," he says. "It further widens the advantage online has."

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Alexander Bruce
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Good read. Thanks.

steve roger
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"When we hit the wall last year, in a weird sort of way I think it was an opportunity to right the cost structure all at once," he adds.

Looks like buying your way into the dominate position didn't work. As he stated:

"Our cost structure was too high... but it needed to be done in a certain order. If I'd left quality unaddressed ..."

Quality was their number one problem. You can't buy quality. The more cash you through at a game at doesn't address the fact that it was a crappy game. I don't mean that cash for polish doesn't make the difference it does. But if you paid dearly just to get the rights means that you don't have the money to get it right.

Nintendo has the good properties locked up tight on their platform and they work hard to polish them.

Dedan Anderson
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lol... what took them so long??? Wii is dominating and has been since it's release... it doesn't take a genius to realize cheaper dev cost, most units IN THE WORLD equals the place to be... and they get paid the big bucks...

Bob McIntyre
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60 Hertz, you're oversimplifying. The customer base that makes the Wii so huge is very different. The "expanded audience" crowd doesn't spend a lot of time playing games, doesn't keep up with gaming news, doesn't pre-order stuff, and in some cases has no history of playing video games at all. It's not like looking at the 360 and the PS3 and going "well, the 360 has a bigger base, so Devil May Cry 4 will obviously sell more on the 360." That's very simple because the populations are made up of almost the exact same type of customer. The Wii user base is very different, and your whole approach to sales and marketing can't be the same as it is on the 360/PS3.

Russell Carroll
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Bob, I think that is oversimplifying as well. I agree with you up to the point that the audience is very different.

Beyond that there is plenty of evidence about pre-orders and time spent on console that suggest the Wii audience behaves in ways that are expected, just with different types of games. For example, Tiger Woods w/WiiMotion Plus was a huge pre-order seller at Amazon if you watched the daily sales charts. The bigger difference is the 'what' people are pre-ordering and playing, not whether or not it's being done or whether people are playing (the playing time of mass-market consoles (PS1/PS2) is always lower than the ones that don't hit mass market overall, but the core players on those consoles are not playing any less time - additionally attach rate is lower on mass-market consoles (notably the Wii attach rate is still above what the PS2 attach rate was over the same period of time from launch)).

Anyway, I agree with the general "when taken altogether it's a different audience." Just not with the specifics. For sure marketing needs to be different :). It appears that it takes time for Wii players to know they want something, WiiFit didn't sell out at first, once people knew about it, that's when people had to get on waiting lists (which in itself is somewhat akin to a pre-order).

Mike Lopez
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I'm not sure they have figured the magic formula for Wii yet despite the exceptionally promising EA Sports Active. So far it is only an anomaly and they will need to prove they have broken out of that with a much stronger and more rounded slate of games.

Lorenzo Wang
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60 Hertz you're missing the point, JR is saying that there is a misconception that the wild success of the Wii is solely for Nintendo to enjoy because 3rd party developers don't get the support they need. The truth he points out is that Nintendo best interests is with the platform, and that often means focusing on 1st party games to drive the platform. All developers have to put a brave, creative stake in making quality games to succeed on the Wii, not just blame the lack of Nintendo support.