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Opinion: The Sad Ending To EA's 2008 Narrative
by Leigh Alexander [PC, Console/PC, Columns, Exclusive]
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December 11, 2008
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[Electronic Arts looked to be truly in the midst of a spiritual turnaround this year, garnering cautious optimism from an audience that once demonized it. Yet the kinder, gentler EA couldn't make its numbers this year -- Gamasutra news director Leigh Alexander reflects on one of the year's most complex stories.]
I ultimately followed Electronic Arts more closely than any other company this year. Part of this is due to their media strategy -- most publishers of their tier don't tend to do biz interviews with the games press as often.
It's also because I was personally interested in the story there, as I think a lot of people were -- this publisher we were so accustomed to demonizing seemed, to all appearances, to be not only gaining a soul, but to be aiming to make amends.
Obviously, business is business, and I am imposing a "personal narrative," as CEO John Riccitiello said people liked to do around the EA-Take-Two saga, which I also covered quite closely.
Still, as we watched EA this year make what appeared to be a genuine attempt to raise its quality bar, diversify its portfolio with what Riccitiello called "creative risks" and talk a lot about investing in new ideas and new IP at the expense of short-term profitability, it was a heartening narrative for anyone who's a fan of games, especially alongside comments from EA's peer companies about eliminating "franchises that don’t have the potential to be exploited every year across every platform."
Exposition, Rising Action
"I can't believe EA is actually the one to be doing things right," one of my colleagues said to me at some point during this year, probably around the time the company scored a partnership with Goichi Suda and his renowned Grasshopper Manufacture, a move that surprised everyone -- and delighted many.
"Whoever simultaneously publishes id and Valve games has my vote," a commenter wrote on the E3 interview with Riccitiello I conducted for consumer weblog Kotaku. "EA's definitely won me back over," agreed another.
I think that many agree that even if Mirror's Edge, for example, was not executed well, the effort itself was appreciated, and surprising from EA. All in all, it was a happy narrative for the company this year -- the problem is, it didn't work.
You probably already heard the recent news -- EA said its holiday portfolio just didn't sell as well as it needed to, and that coupled with other economic factors, like cautious retailers keeping smaller inventories, the company won't make its numbers. Analysts came down on it hard.
A kinder, more creative EA does not make money.
Climax, Or Turning Point
Now, to get profitability back up, it'll have to cull some of those creative risks from its portfolio next year and focus more on maximizing the proven hits.
It plans to move further into online business models, like subscriptions and microtransactions, too. Many of EA's fellow companies are eyeing the same strategy, but when EA does it, it'll no doubt bring ragging on EA back into fashion among the internet community.
There's no "close but no cigar" award in enterprise; investors don't buy stock for any other reason besides profitability, and a company is a business entity, not an identity with a moral mandate -- although many, including EA, are often successful at marketing themselves that way.
What's disappointing is that I agreed with my colleague -- DRM scandals aside, EA did seem to be doing everything "right," according to the things that gamers as a community say they value. The company's goals were inspiring, and whether or not you liked its games this year, whether or not they had design problems and whether or not they were reviewed well, that in and of itself was respectable.
And it's perplexing to me that the things we respect are not the things we reward with purchases. Of course, that's been the story of the games business for many years. We've seen excellent games go unrewarded, we've seen talented studios go bankrupt, and we've seen beloved online games close because the numbers just weren't there.
"You don't make games profitable on purpose," Riccitiello told me this year. "You make great games first, and then they are profitable."
"I think that trips up a lot of companies... even EA, at different times, when a company is seeking to make purely a profitable game. Frankly, even when EA was at its peak at the last cycle, we didn't talk a lot about profitability as a goal."
Apparently, EA is going to need to start talking about it again.
Falling Action, Denouement
However, the moral of this narrative, one supposes, is that effort doesn't always translate into excellence -- perhaps, despite its most earnest endeavors and its healthiest attitude, EA's games genuinely weren't good?
Yet how do you explain the quantifiable measure that Riccitiello offered yesterday as evidence that indeed, most of them are? 17 of the company's titles scored 80 or above on Metacritic this year, as opposed to 7 of the same last year. To be fair, EA did release more games this year than last, but nonetheless -- 17 titles score over 80, and you can't score strong sales?
Do we not want the things we say we want?
This means that either Metacritic is useless as a measure of quality and product desirability (if so, then what's it for?), or that consumers don't care as much about quality as EA thought they did. Theoretically, then, the consumer that doesn't demand technical excellence would buy on innovation instead -- but if that consumer was dominant in the market, Mirror's Edge would have done just fine.
Either way, the relative failure of EA's portfolio this year doesn't make a good deal of sense at face value, and what EA learns from its road back from this stumble will be educational to all of us, I'm sure. The pessimist can predict the lesson that the rest of the industry will take from this is that "new IP doesn't sell" and "gamers don't want innovation," but I hope that's not the case.
As a journalist I obviously don't professionally prefer one company over another. But as someone who loves video games, I just wish this personal narrative had come to a happy ending.
Finally, I'd like to remind Gamasutra commenters that, regardless of your feeling about a company, when things like this happen, people get fired, during a period when it'll be especially challenging for many to find new jobs. Please show some respect and civility in your comments.
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The thing to take away from this would be that EA expects only to focus on their potential big hitters in "09, and focus LESS on new IP. NOT abandon new IP altogether.
This is similar. It will take more than one year to turn the lumbering EA ship around and get people back.
The market was over saturated during the holidays. It's one of the main reasons it did not work for EA. If you look at the January window however, there is a lot of space for new IPs to make their mark.
In essence, I agree with the author, I think EA has made some steps in the right direction. My buddies that still work for EA say its gotten a little better, buts its going to take more than a year and changes a little more drastic, especially to recapture their former #1 status.
Publishers don't try to release all their best-seller-list capable books at Christmas because it would be publishing suicide. Very few people can read 17 books over Christmas even if every single on of them is "scoring over 80."
Games are NOT movies. Publishers need to realize this and spread their releases over the year. Save the most promising titles for the Holidays but try and spread the rest over the whole year--in particular with new IPs being released early in a year, so that they have time to garner recognition and identification, so they can benefit from the holiday spending when it finally comes around.
Of course, this is problematic if you base too much of your product line on movie tie-ins, since you're then tied to their whim and release, but that's another problem entirely.
As evidence, I point to games like Imagine: Babies. Metacritic ratings are low, but sales are in the millions. The game's target audience of children does not contain a large number of game reviewers...
As further evidence, I would invite you to look at the numbers for Metacritic's original reason for existence: movies. Movie reviewers rate certain movies highly, but movies with lower ratings sell more tickets. For the weekend of 12/3, not a single movie in the top 10 rated higher than 70 on Metacritic. This is because 1) a movie made for critics rarely matches what the general public, which holds most of the disposable income, wants, and 2) a movie made specifically for critics often has such a small potential audience that it suppresses its own sales potential.
(It also points to a glaring problem with review scores that has been covered so often that I'll just gloss over it: review scores are based on a 7/10 scale, so review scores are artificially inflated above the more intuitive 5/10 scale that all other media review forms use. A 70 for a movie is about equal to an 82 for a game.)
You ask, "Do we not want the things we say we want?" Perhaps 'we' do, but 'we' doesn't mean the general public. It means your particular splinter of the gaming population. Now that interest in gaming has exploded over the past several years, it's impossible for gamers to be a united group that can be represented by a single aggregate number.
http://opa.yale.edu/news/article.aspx?id=4598
I think part of the pressure, aside from the obvious holiday cash rush, is the average gamer's 'I want it and I want it now' mentality, which may put pressure on developers and publishers to release games at the soonest possible moment, instead of waiting until the holiday dust has settled to take advantage of the quieter following months.
They are trying to compete for the consumers time, all at once. Game business goals seem situated towards incredibly short term, like movies. The idea that if it doesn't get a million preorders or sales the first week may work for movies, but games cannot be treated the same.
I think companies like EA need to be the trendsetters in a situation like this. For high risk properties, be smart about when they will release, and make sure the marketing is there. Don't play your whole deck at once. It will take patience and time for the gains to emerge, and that's the nature of being a creative force and not just a corporation selling a commodity.
The way I see it, there are many external problems that need to be addressed for the game industry to reach its potential in quality while maintaining profitability.
1. It's simply too damn expensive to make games. You need people with technical skills, artists, as well as a whole host of other professionals to bring together the huge amount of "world-building" that goes into games. More effort needs to go into finding a way to simplify and streamline the cost of creating games.
2. Culture. Crap sells. The majority of people who provide sales for companies like EA don't want an experience, they want a diversion, and will accept the most readily available and easily recognizable diversion available to them. They don't want to put any kind of effort into enjoying a game on a deeper emotional or intellectual or artistic level, they want quick and easy shock and awe because it makes them feel good, quickly.
Games which can be made and sold quickly dominate the market. We can belly-ache about this problem all we want, but the question is: What can we do about it?
I sure hope EA doesn't abandon this new philosophy without giving the economy a chance to rebound. People losing their jobs and can't even pay their bills, losing their mortgages, and we're thinking that they're not buying our games because they don't appreciate quality? Wake up, Marie Antoinette... take a look out your window.
My point - even movies, which are passive and much faster to complete than games, are spread out much more through the year.
The most important points in my view:
-Yes, we're in a global economic recession and nothing is recession proof. Game industry executives claiming that we're recession proof have only set us up for a disaster on par with the Titanic.
-It takes time to rebuild a brand name once it's been tarnished. People are just now realizing that EA is cool again and they need to keep pushing. For every action there's an equal and opposite reaction. They pushed long and hard to be the generic game peddlers of the world and they'll have to push equally long and hard to get back to good.
-New IP's do take time to gain popularity. Throwing money at the problem can only speed the process up so much. It takes time for people to communicate and digest new ideas.
-Finally, there is something to be said for proper gameplay execution. When developing new IP's it takes a really long time to perfect the gameplay. Perhaps some of these new IP's missed their mark a bit but there's nothing like a few iterative steps to right the wrongs. Any other strategy for new IP means rolling the dice and hoping they get lucky.
The mirrors edge demo on 360 turned a lot of people off, they realized it wasn't as great as the ads had told them.
EA have a bad reputation especially on the pc side of things
EA release their pc games with ridiculous drm
If EA want to be competitive on the pc side, they need to at LEAST match what other pc devs are doing or do better (I'm mainly talking about digital distribution)
I buy all of my games on Steam now, it's easy, I trust them (important), it works, it's non intrusive...etc. The drm on most of the games is also fine by me (GTA4 and crysis were a bit much).
EA's digital distro is an absolute joke, steam started off rough but became the standard and EA thinks that they can walk in and offer a far inferior service with much more drm and a limit on installs and get people to sign up.
I personally won't buy from retail outlets again and know many gamers who feel the same. So unless EA starts putting their games on steam, I will not buy a thing from them.
Plus, I read John Riccitiello's response to the limited installations for spore and it was blatantly insulting to gamers, but people ate that stuff up. It amazes me how disconnected from gamers someone like Riccitello is and how easily some gamers bend over when he starts yelling at them.
I realize that there are a bunch of other reasons, and I'm also more informed about the gaming world than the average person. But this is what applies to me and most of the gamers that I know.
I also tried leaving EA some feedback about all of this, it's very difficult to and I got some random response from some support center guy saying that they have EA games in retail outlets....
Despite what anyone says about the recession, games ARE recession-proof; there will always be a market for games. What is not recession-proof are the risks that companies like EA take to secure a “sure thing.” I’m impressed by the investment EA made in Dead Space and Mirror’s Edge, but I wasn’t completely interested. Does this mean I don’t want quality and innovation in my games? No…but I can wait.
Finally, I have to think the poor PS3 attach rate performance in the market is hurting all publishers. My PS3 now only plays Blu-Ray and does a smashing job...games - not so much.
So indeed, we gotta be realistic too. Anything that wasn't 9 hasn't been forgotten. it's just lower on the list. But I'm sure it's still on the list for most of us.
Hmm... I suggest you go out the front page and look at the *other* article published today that showed "blistering" growth for game sales in November. I don't see a need to call anyone "Marie Antoinette" here.
I wish EA all the best in their strategy and truly hope they succeed. I just wouldn't put the whole fault on the "downturn".
Nevertheless, the only one I bought was Crysis, because it is the only one of the mentioned titles that didn't require online registration and didn't have limited installs. Maybe they didn't counted on clients making a point against DRM with their wallets, or maybe they consider that the losses will be minimal, but they still lost sales because of that and I don't think there's a reliable method of actually gauging the loss.
Another thing that put me off in regard to one of EA's titles (Mirror's Edge) is that even before releasing it, they announced that it will actually be a trilogy. For me, that was just like saying, "we'll actually give you just an unfinished game and you'll have to fork over some more money to get the finished product 3 years from now". And what's tragic is that this mentality is spreading in the gaming world: Blizzard is doing the same thing with Starcraft 2. I understand that this is a for profit enterprise, but treating your potential clients like that is a double-edged sword.
http://www.blueunplugged.com/p.aspx?p=122588