Opinion: EA's Origin More Than Just A Simple Digital Play
Retail's harshest critics argue that the sector is made up of middle-men who do little more than stack product on shelves, charging extortionate margins, and then re-selling the same product with zero recompense to the creators. Retail also has the power to dictate how much to charge for products, passing this reduction on to the suppliers, who must suffer in silence.
The old school retailers are desperate to get into digital distribution, because they understand that content no longer needs to be sold in boxes. It does not require trucks and warehouses and underpaid checkout clerks. They want to keep hold of the source of their power, which is their direct connection to consumers.
New retailers like Valve's Steam have shown that there are other ways to reach consumers than by renting space in a mall. But they have also shown that it is possible for producers to create their own Steam-a-likes, and maybe even do it better.
Steam, with its 30 million user accounts, has done a terrific job of retailing digital content, selling products framed within a connected community with features like forums, notifications, achievements, chat, news and friend groups. But while Steam has the reach -- and isn't tradition boxed retail -- it's still a middle-man.
EA wants to establish a direct relationship with customers via Origin, building online entertainment hubs, social networks and community features around its brands. From a marketing standpoint, Origin is very much like Activision's Elite plan, which takes much the same approach to online connectivity. It's not just about monetization. It's about owning the audience ("engaging" is the correct euphemism) all the way through the process.
EA knows that a digital platform that focuses purely on selling products just won't work today, as the publisher found out with its previous effort, the EA Store and Download Manager. Retail is moving towards ubiquity and commoditization. And so, in order to win a competitive edge, the retail players must offer something special, something that stands apart and gets noticed. Ideally something of tangible value. No-one is in a better position to do this than the content producer.
EA can load its retail environment with all manner of cool content, special offers, and social programs. It can build its products with exclusive retail promotions built in, with the knowledge that these promotions benefit no-one else but EA and its customers. It has full access to all the metrics that show what's working and what isn't. (Retailers hate to give out granular metrics to their suppliers, and will make every excuse possible to avoid doing so.)
It can also offer exclusive content that isn't available to other retailers, an extremely powerful trick that's already planned for Star Wars: The Old Republic.
Steam has great branding, good pricing and lots of choice. But it has never been about "content" above and beyond what it sells. EA can build entertainment around the retail experience. It also has the brand power to compete in a retail environment, something which many of its competitors will struggle to emulate, although I have no doubt that many will make the attempt. (Namely Activision Blizzard, whose Battle.net is rumored to eventually host third-party games.)
For the moment, Origin is restricted to the PC games market. In the console digital distribution sector there are already heavyweight middle-men, the console manufacturers, that will not allow content producers to enjoy direct relationships with their customers. But the future may hold different models for "console type" games, that do not require a hardware gatekeeper, and EA would very much like to be ready for just such an eventuality.
EA's Origin isn't just a retail play. It's about entertainment and it's about exercising control. The relationship with consumers is no longer something that companies like EA want to pay for. They want it themselves.
[You can follow Colin on Twitter @brandnarrative. As well as being business editor he works for a marketing agency that supplies content to companies.]