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The New EA: An Interview With Frank Gibeau
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The New EA: An Interview With Frank Gibeau

August 1, 2007 Article Start Previous Page 3 of 5 Next

We tend to focus on the American market the most because it's biggest, but it's not the biggest for everything.

FG: No. What's interesting about the North American market is that people have this over fascination with NPD data. It's important and it's valid to watch, but it doesn't measure how much time people are spending online. It doesn't measure what people are doing in China, it doesn't measure what's going on in Europe, and it misses whole categories of product where people are playing. Where does Second Life show up on NPD data?

Right. Well, they're going to have to make some significant changes over time, because the industry's changing too much for those kinds of stats to be really that relevant.

FG: I couldn't agree more. We've gone from three relevant platforms to like eleven. One of the things we tried to do is figure out where people are spending their time. We went in and we talked to people in their houses, and watched them. We had them keep diaries, and we just tried to figure out when they were spending more time playing games, less time playing games, and when you're playing games, what you're playing them on.

What we saw was a lot of really interesting things. There's a lot of multitasking going on while you're playing games. There's a lot of playing games and taking them with you on your phone as well as playing it at home on your PC, and going over to your friend's house and playing console games. We're trying to keep a broader sense of what's going on with our fans and our customers, and we're doing that through figuring out how they're living and what they're doing. It's proven to be pretty useful for us.

What have you found people are playing the most, in terms of platform?

FG: Globally, it's on the PC, and by that it means a midsession game in China as well as a PC game in Germany, as well as a PC or casual web product here. When you look at just the raw numbers, once you step out of that 100 million people you superserve with Halo and Madden and you step out into the larger PC market, that's where you see the broadest base of people. It's very diffuse and fragmented, but that's where the mass is.

Can you say on the console side, or handhelds?

FG: After the PC, it's definitely the PS2, and the DS. The Wii is just starting, but the Wii is on track. One of the things you look at is how many markets they are successful in. The Wii's successful in Japan, North America, and Europe. The Xbox is successful in North America and kind of successful in Europe, and not at all in Asia. But there is no console business in China.

I was reading an interesting plan the other day when we were looking at the market. I think there's 300 million males 18-34 in China. It's larger than the population of the United States! There's no women in that, and I'm not even talking about 12 to 17-year-olds. Not all of them can play games, but a lot of them have access to PCs and phones. None of them have access to consoles, or if they do, it's pirated stuff. When you take that step back and take a broader perspective and put NPD in it, it's like looking at an elephant through a straw.

It's really hard to tackle the China market. It seems like it's been pretty hard for Western companies to break into the Asian PC market.

FG: Yeah. I think the market is becoming mature enough for Western companies to go in. Obviously, what's critical in China and Korea is finding the right partner who can help you understand the culture and how to go to market, and how to make a great game for them. For FIFA in Korea, we had a lot of success with Neowiz. We completely changed the game design and put it in the market, and found that it did very, very well. We have similar hopes for China.

Do you think the Wii's success is sustainable? Anecdotally, I know a lot of people who were really excited about it, and are now kind of wondering what the next game is to buy. That's also sort of true on the casual side. Once the housewife or whomever buys Wii Fit, what's her next game?

FG: I think it's been off-the-charts successful and the buzz is positive, and now the challenge is not so much getting on peoples' radar as the hot platform as it is how they sustain. You're absolutely right. When you look at their pipeline of products they have coming, there's a lot of stuff for everybody in there, and all the publishers are chasing it hard.

I don't think there's going to be a problem of supply of titles. They're going to be in all kinds of categories. How that housewife who's a first-time buyer of games adjusts from a 0% tie ratio -- does she go to 2%, or three? She might pick up Brain Age. Maybe she picks up a Harry Potter game and plays it with her son.

Those are the factors that I think frankly a lot of people are shooting in the dark on. They're just going to have to watch events unfold. They can start to measure it, but the platform is so fantastic in how it changed the machine interface that I think there's a lot of stuff that's going to happen that surprises people. Does it sustain as long as a high-end console? Maybe its lifecycle is shorter, but I bet they sequel pretty quick and keep it fresh with new content.

That's something I've been wondering about as well. It seems like the 360 and PS3 are probably going to have longer lives than previous generations, though the PS2 had a long life. Perhaps not longer than that. We typically used to say five to seven years, but now it seems like the technology is at the point where it has to be longer to keep it profitable. The Wii strikes me as something that might not be able to stand quite as long.

FG: The other important thing is that they don't have to. Their business model's completely different from Sony's or Microsoft's. Their costs of goods on the boxes are different. They're already in the money, so they don't need to hit profitability in year five. They're already there. So the fact that they could still experience a five-year lifecycle and come back with something else after that that leveraged what they achieved is, to me, totally reasonable, and exactly in the right place for them. I think the PS3 is going to have to have a longer lifecycle, and the power of the online connection on those is a little bit more [important]. The amount of content you can bring and things you can do will help extend those lifecycles, and I think Nintendo will think about that.

I think they really have to. They have to ditch the friend codes, and just make a network that people can sign into. It's a little unfortunate when Sony can beat you at an online experience in a platform. In the past, I know that EA chose to do its own online platforms, even when there were more alternatives. That has changed now.

FG: Yeah, I think the nature of the web has changed as well, though. I think that what you see is more distributed networks, and more content and personalization being spread across more things. What used to be centrally planned, walled gardens just doesn't work as a model anymore. Consumers want different things. I think we've adapted to that. The other thing is that there's a lot of terrific off-the-shelf tech support platforms that you can pull into the company. I think it's a mindset and a read that's different. It's just evolving with the market.

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