Riccitiello Talks Turning EA Around, Old Republic's Prospects
Despite some tough times in recent years, EA CEO John Riccitiello seems confident that Electronic Arts is on the right track towards regaining its previous leadership position in the industry.
In a presentation at the Goldman Sachs Technology and Internet Conference, which Gamasutra listened in on, Riccitiello acknowledged that the company has fallen far from its peak.
"Through this last transition to the PS3 era... for a whole bunch of reasons that are worth getting into, I think it's fair to say we dropped the ball," he said. "Our IP deteriorated, our costs went up, and we didn't really have an answer for the rise in digital."
Since that transition, though, Riccitiello said EA has refocused by cutting its title slate in half, reducing rampant growth in costs and paying more attention to the growing digital business, moves that have helped make it the fastest growing public company in the industry, he said.
A large part of that turnaround has been an embrace of the free-to-play model, which Riccitiello said "on balance... in its current state of rivalry, is a better model than pay to play."
He pointed out that total revenues from FIFA Ultimate Team quadrupled from $10 million to $40 million when the price of the core game went from $10 to zero.
"As the head of our Playfish division likes to say, 'There's no such thing as free to play... it's play first, pay later,' and that's a very compelling model," he said.
That doesn't mean EA is ignoring retail titles for high-definition systems, which still form the core of the company, Riccitiello said. But one of the most important things about successful IP on these platforms is their ability to extend to the digital space.
"Our FIFA business is a leader on iPhone, a leader on Android, a leader on social networks, a leader on free to play," he pointed out. "We did it with Dead Space, we did it with Mass Effect, we did it with Dragon Age, we did it with The Sims."
Despite disappointing sales for the Kinect version of EA Sports Active during the last holiday season -- a result attributed to an unattractive price point driven by an included heart rate monitor -- Riccitiello said he still saw the potential of motion controllers for targeted genres like exercise and dancing.
That said, "other genres -- first-person shooter, driving, role-playing, strategy -- I tend to think that the more traditional controller is likely to be superior hardware," he said. "I think it's more horses for courses rather than either of these controller devices are going to replace what's gone before."
Riccitiello also discussed upcoming Star Wars MMO The Old Republic, speaking boldly about efforts to unseat World of Warcraft from its perch atop the genre.
"We're going right at it. We want share, we want leadership position here," he said. "I'm not expecting to sort of knock them over, but ... we're gonna get a big chunk of [their market]."
He added that the Star Wars universe is just different enough to provide innovation that's been largely lacking in competing MMOs, and that new technologies used in the game would help set it apart.
"In a way, theirs is a silent movie and ours is the first talkie," he said. "By and large, theirs is not a voiced MMO. Ours is a fully voiced MMO in multiple languages."