EA Partners, that's under the EA Games label, right? I think that's a really interesting little subset. What do you see as the future of that division? Is that going to expand even more? There's some really interesting stuff coming out of there.
FG: I'm very proud of what we've done with EA Partners. It was based on a very simple notion that we needed to be partner first. We needed to go out and find the best in the world in the third party development community and figure out what they needed and how to give them the largest audience possible globally through our company.
The early part of that process was going out and telling them that EA was not the Borg, and we weren't jerks [laughs], and that we actually would treat their titles equally well as an internal EA title.
And that took a lot of personal diplomacy and time and effort and frankly proving ourselves with a couple key partners early on so that we go that momentum.
EAP has not peaked at all. There are plenty of places to go. There's a lot of room in the marketplace for more of those titles. The third party development community is at an all time high in terms of generating marketshare within the top 20.
The number of games are doing well there -- the Epics, the Harmonixes, and everybody else -- they're generating massive amounts of market share. It's an all time high. The third party development community is going to end up stronger.
EA/MTV/Harmonix's The Beatles: Rock Band
It's a very tough business, but it's at scale. We think we have a winning formula in terms of getting partnered with them. I think our signings and the momentum we have in that unit is indicative of that. I think we have more opportunity to work with Asia, bringing product from Japan to U.S. through EAP.
I think we have more opportunity in building out online at EAP from online in a way, as well as continuing to sign the best and the brightest out there inside the third party community. Realtime Worlds' APB is great. There's a lot more partners out there that are looking for publishing.
We don't just do the publishing for the games; we also help from a development standpoint when they want it. It's a very opt-in situation. We sit down with the developer and say, "What do you need? What do you want?" If they need help with a PS3 issue or a 360 issue, we deploy actually EA engineers and help them with it. We helped companies build a Wii game. So, it's a full-service...
Yeah, it seems almost one-sided. They're getting EA's big distribution network, they're getting the help and development when they want it, but you guys don't own the IP, right? And the margins are lower.
FG: But the risk profile is different. You don't carry the team in between projects. So, when you look at a lower margin, of course, we're not taking the same risk. And so, when you look at that risk/reward calculation, it's actually very positive for EA.
At the same time, we have over the years acquired companies through that relationship. You get to know each other, there's a strategic fit, there's a cultural fit, like DICE, like Criterion. You know, the BioWare/Pandemic guys came in through EAP. We had EAP titles signed up with them.
So, you get to know each other, you try each other out, you feel good. If it feels like you want to join EA, and if EA wants you to join the company, then you have a good runway towards that.
Not all deals are going to be that way. There are a lot of fiercely independent developers out there. The good news is that if we prove ourselves on the first game, when the sequel rights come up, we can usually get them. And we're very open about that. It's ours to lose.
In fact, when we close a new partner, we typically ask them just to call the guys that we have. You know, call id, call Valve, call Epic, call Harmonix. See what they say about us. We're very open about that because we know we're kicking ass in this sector of the business. More often than not, it closes the sale.
So, I wouldn't characterize it as very one-sided to the development community. I think that's what working is: it's enlightened self-interest. You know, no company can have a monopoly on the best talent in the industry.
We're going to compete with these games if we didn't partner with them, so why not partner with them? Why not figure out how to build a relationship with them? Why not learn? Why not have them learn? It's good for the industry. It's good for us.
So, it's much more progressive than it was before, [or] the way other companies handle it, where it's internal titles rule, my way or the highway, very formulaic, how they approach it. We're very flexible. It's been one of the more exciting strategies that we've had, and it's working very, very well.