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DICE 2010: EA's Schappert on Surviving the Next Three Years in the Industry
DICE 2010: EA's Schappert on Surviving the Next Three Years in the Industry
February 19, 2010 | By Brandon Sheffield

February 19, 2010 | By Brandon Sheffield
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More: Console/PC



John Schappert, COO of EA, is bullish on the game industry’s future, giving 5 tips for succeeding in the current market, including “Don’t abandon the consumer base, specifically the shiny [retail] discs,” while also lamenting not enough marketing spend on key titles like Mirror’s Edge and Dead Space.

The headlines these days are not good - “In fact, they’re kind of depressing,” says Schappert. But he also asserts that the job loss and the flagging retail sales don’t paint the full picture. NPD doesn’t track big box retailers, international sales, or digital downloads or subscriptions, so he says it’s very hard to get an accurate shape of our industry.

We’ve weathered this storm before, Schappert reminded us. “But this one’s different, it’s harder, it’s more difficult, it’s more complex. There’s a lot more platforms now.”

“Consumers are being very price conscious with their money, and very selective in what they buy,” he says, admitting also that “If you’re not in the top 30, maybe the top 20, or even the top 10, you’re probably not making money,” talking of the blockbuster retail arena.

But though those platforms make it tougher, it “also gives us more opportunities than we’ve ever had before,” said Schappert. With that, he divulged his top 5 tips for succeeding in this market over the next 3 years.

Tip 1 – Commit Yourself to Quality.

“The days of people going in, getting excited because they saw a commercial, picking up a game and going home to try it for the first time, I don’t think we have those days anymore,” he says.

Schappert gave an example of EA’s FIFA series versus Konami’s Winning 11. FIFA was a venerable title since the Genesis days, but toward the later days, “We took our eye off the ball a little,” he admits. “We started focusing on cutscenes, and graphics, and CG. Then came Konami, who focused on gameplay. We found ourselves in the position of losing marketshare in an area we helped create.”

And this was just an example. In general, he says, “we were over-iterating our franchises, we were asking too much of those titles, and too much of our creators.” That’s when EA made a cultural change to deliver high quality games to a consumer once. “It took a long time to regain that crown, and it taught us a lot of lessons,” he says. And you’ve also got to listen to consumers. “We can’t have teams and creators make the game that they want unless it’s also the game consumers want.”

Tip 2 – Great Marketing.

“Great marketing only works on great games,” he reminded us. The days of selling a poor product with good marketing are over. And yet, “we have great games, or very good games that don’t get the marketing that deserve,” saying specifically that Mirror’s Edge and Dead Space “are good examples because these are good titles, and it was during a time when we were focusing on fewer bigger hits.”

“I don’t think we gave them the marketing support they deserved.” Particularly as they were launched alongside blockbusters like Fable and Gears of War, he said. Especially when launching in the holiday period, “you need to spend even more to get that share of voice.”

Tip 3 – Invest in the Future – That Means Online.

Connected consoles “are ubiquitous with online,” he says, “and it’s something we need to keep in mind.” Going back to his message from earlier, he restated that “people are buying fewer games than before, but they want to play them longer. We need to prepare for a long-term relationship with our consumers, and have at least a 6 month plan of downloadable content for those consoles.”

Social is the hot new place, obviously, as everyone scrambles to get a slice of the Facebook and social pie. “I’m a big supporter and believer in the space,” he says, “But I do want to express a little bit of caution. Before you give up making these shiny disc-based games at retail, and jump for this new hot space, we need some caution. I think this industry is destined for consolidation.”

If you look at the extremely high market valuations compared to the number of people rushing to the space, “I think we’re probably in a bubble,” he says, just like we saw with iPhone/mobile. “Fast forward to today, 18 months later,” after the launch of the iPhone. Now known brand-oriented games are dominating the iPhone. “It’s going to be about the brands people trust, and people relying on playing games cross-platform.”

Tip 4 – Don’t Abandon Your Consumer Base.

“Don’t abandon the consumer base, specifically the shiny discs,” he urges. “I think we often forget about how important the disc is, and we often underestimate the technical hurdles we have to go through to get rid of the disk. I don’t think in the near term, or the medium term, arguably the long term we’re going to be without the disk.”

Tip 5 – Don’t Let the Critics Get You Down.

”Every generation has ushered in a larger, stronger industry than before,” he says. “We have more new consumers and more new gamers than we ever had before.”

“It’s easy to get down, but we should look at the future and say we’ve done this before. There’s nothing to make us think the outcome isn’t going to be the same as it was before,” said Schappert. “Keep your head high, don’t listen to the cynics, and keep making those great games for us.”


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Comments


R G
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This was a pretty good article. I too don't want to see pure DL games.



To me, DLC is one of the overplayed cards in this generation. Games that have DLC the same day or week of release tick me off because there's no excuse that the content couldn't have been on the disc. I'm not saying I don't support DLC or DL games (DLG?), but I like holding the actual disc and knowing that I own the game, no matter what.

Uyiosa Iyamu
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I agree with most of what he is saying, but I'll be waiting to see if he starts practicing what he preaches.

Andre Gagne
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I'm with Uyiosa. Has he even played Mirror's Edge? I found it terribly unfun.



@Robert I give you this:



http://www.businessweek.com/magazine/content/10_08/b4167064465834
.htm



Note the last part about "Project 10 dollars" where EA is essentially admitting to giving customers less product for the same price.



I'm a decent fan of DLC in so long as it's decently priced. Although it does make it impossible for my school's library to get a copy for us all to try. It means students who have little to no money either don't get to play the game (difficult for people trying to get a degree in game design), or end up pirating.



my 2 cents anyways.

Fiore Iantosca
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Tip 4 is why the recording labels are in deep doo. Suing your customers is bad business.



Listen to what your customers want - this spans all industries. Sounds like common sense and business sense, but many companies don't use both.

R G
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@Andre-- Thanks for the link. Glad to see somebody who agrees here. It's the same with my school lol.



What I would really like to see, and this would help EA I believe, is to put a quality MMO on a console.

Amir Sharar
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"Let's see, this is coming from a guy who is running a company that has been losing money for 3+ years. A company that also isn't known for #1.



Grain of salt time?"



To be fair, Schappert only recently rejoined EA after a 3 year hiatus where during that time he was with Microsoft.

[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

Paul Lenoue
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He forget EA's Tip #6: Always use DRM that prevents legit customers from playing the game. I have a CD of Spore that stopped playing after a few hours because the DRM locked down. Several friends have various other EA games, legally purchased discs, that they can't play because of the DRM. Meanwhile I know many people who downloaded pirated copies specifically because they didn't want to mess with the faulty DRM issues. They were able to play the games with no problems.



You can bet that those of us who were burned by EA's DRM will never buy one of their games ever again, especially when there are so many better games we can spend our money on.

Richard Cody
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I think Mirror's Edge is one of the great games of this generation, I absolutely love Madden Arcade (any Madden since 08 has been good), NHL series rocks... all their sports games are well done.



Mass Effect and Dragon Age are further proof of quality. EA is a good company, they're huge and it's trendy to hate them, and DRM was a nightmare (I guess, I don't buy many PC games), but they put out lots of great games.



I also agree that we should go back to expansions and patches. DLC should allow you to purchase pieces of the whole expansion. If you're trying to support a game for a long time, look at the PC model. games there have a 2 or 3 year plan of expansions before the next sequel comes.



I do agree though about everything being consolidated online. Like everything being sold through iTunes. That type of thing could potentially be dangerous.

Adam Bishop
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@ Andre



How is Project Ten Dollars giving consumers less for the same price? It gives all the game's content, plus some bonus content, to people who buy games new. The ten dollar part applies to people who buy games second hand. Those people are not EA's customers, and EA is not providing them "less product for the same price" since EA does not get any money from them to begin with.

Maurício Gomes
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@Adam



Selling a crippleware just to force a second hand user pay them is cirvuncent the right of first sale. They circunvent copyright laws then complain of piracy...



@General people



I think that EA is waking up, maybe they will manage to be "less evil" and let Actvision (that is trying really hard) and Ubi (that suddenly is trying hard too) take their place as "evil company from hell".



Also, I LOVED Mirror Edge, but the shortness of the game (its price no way pay what the game content is). But I played on PC, might explain why I liked it, on console I heard it suck, it was not meant for console...

R G
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@Mauricio-- Agree with you on the Activision being "evil". MW2 is the bane of my existance as of today. Blog coming on that shortly, too. Curious though how has Ubisoft been like this? Not saying they haven't I just haven't seen much from them.

Maurício Gomes
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@Robert they used some time ago Starforce DRM, got lots of backlash...



Seemly they learned and dropped it for a time.



Now they come with their shiny new DRM: You can only play if you are online. If you have a crappy connection like mine (that today reseted each 12 minutes or so) you will see MANY times the connection lost menu (and btw: it returns to the last checkpoint, not the what you was doing). Or worse, if Ubisoft servers fail for some reason (like a ISP here that once went down because a truck hit the cables...) EVERYONE will be unable to play any Ubisoft game.


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