EA Sports president Peter Moore today admitted that his company's games have sometimes been "too hard" for mass audiences, claiming that core offerings must be balanced out with more accessible games and innovative business models.
The remarks were delivered at the BMO Capital Markets Interactive Entertainment Conference -- with the announcer pointing out Moore is a long-time veteran of the conference, from not only his Microsoft days but dating back to Sega and the Dreamcast.
After some brief reminiscing himself, Moore launched into discussion of Electronic Arts. "It's really a period of change for us," he said. "New structure with the labels, very different from 14 months ago when I arrived. ...There's a focus for the company on both quality, innovation, as well as continuing to drive our core business moving forward."
"We need to grow into a more mass market company," he went on, "and at the same time we need to make sure we're digitizing our content, we're having deeper and more meaningful relationships direct to consumers. ...We're investing this year alone $150 million, with no associated revenue with that, in building out our online infrastructure, so we're well positioned to go forward with this direct-to-consumer digitization strategy. We have the infrastructure, we have the ability to interact with both our retailers and our retailers' customers, and the ability to drive our business going forward as we enter this new world of connectivity...is going to be very important."
"We're starting to see the results of scale and leverage being brought down to the bottom line, with growth in our operating income," Moore said. "We're very bullish about our ability to continue that."
Moore then moved to EA Sports specifically, a division he called "a core part of what this company has been about for nearly two decades." He said EA is looking to grow the overall sports segment "and take into account this new consumer that's looking for a different experience."
"We're saying great growth in what I'm calling lifestyle sports," said Moore. "Our strategy is to return the EA Sports business to double-digit growth. ...At times, our games have been too hard. We need to make our titles much more approachable and accessible to the new consumer."
A slide showed franchises like Madden, Tiger Woods, and FIFA, and the PS3 and Xbox 360 consoles as being part of "yesterday," while the online arena and social networking, Nintendo, and casual gaming represent shifting market trends. Examples of "the future" include the EA Freestyle label, subscription-based gaming, heavily online-oriented titles, content creation tools, and digital distribution.
Still, Moore noted EA Sports won't be giving up on the core consumer. "We need to defend our multi-billion dollar business for the core consumer. Our licensed product business that has served us well for nearly two decades must be defended. But at the same time, we've got to captivate the masses," he said, adding that EA Sports "can't be so reliant on one market in the United States."
"We need to be able to engage the consumer in ways other mediums don't do," he said. "I stood here nine years ago saying the Dreamcast was going to change the way we play games, connecting through a 56K modem with NBA 2K. At that point, I said, 'This is where gaming is going.' ...Fast forward to where we are today, and obviously billions of dollars are being accrued from online gaming."
Moore claimed that "EA Sports is arguably the only true brand in gaming from the publishing side itself." This makes it critical to expand that brand, he said, and ensure it is the "world's leading sports entertainment brand." For example, the company is focusing less on traditional per-title television campaigns, and more on brand promotion, for example via Wal-Mart endcaps.
Part of that effort is continuing the yearly update mentality, he said. The exec admitted that "in some instances, we've fallen down, and we haven't done our job well, and our sales have reflected that in some franchises," but noted that this year it saw Metacritic scores raise across the board, in some cases by double digits. "I'm very proud that we can do this on this incredible treadmill [of] our development teams both in Orlando as well as in Vancouver...year in and year out."
Moore pointed to FIFA Soccer as an example of a franchise that has seen consistently increased sales even against a strong competitor in Konami's Pro Evolution Soccer, by way of investment in a new engine, innovative gameplay features, and a "disruptive marketing campaign," resulting in an average Metacritic score of 88 for FIFA Soccer 09.
He then moved onto EA Sports Active, the company's new Wii-oriented label focused on "bringing lifestyle sports to new consumers."
"This consumer is someone we've not spoken to in the past, but see a huge opportunity," Moore said. "We're looking at health, wellness, and fitness as being a core new platform." He noted that research suggests $4.3 billion each year is spent on home fitness.
"In the same way that the music genre has revolutionized how people think about video games, we think health, wellness, and fitness is the next big opportunity for this industry to be able to drive new consumers to utilize their console," Moore said. "There will be software updates; there will be peripheral items. ...It will be endorsed by Bob Green, Oprah's trainer, and we think it's a huge opportunity to bring new consumers not only into our business, but into video games, period."
That same attitude should be applied to EA Sports' core business, Moore said.
"We didn't get off on the best foot with the Wii with our authentic, simulative products," he admitted. "In our first year, our results were probably best described as miserable. But we've made huge progress." He noted that the division's core games on Wii, Tiger Woods and Madden NFL, are up 20 percent year on year and are EA's top-rated games on the system.
Moore attributed that new success to a more genuine ground-up approach on the system, "and we also have a more casual, lighter, more approachable experience than you would get on the Xbox 360 or PlayStation 3. ...We'll continue to invest...as a platform for EA Sports to take advantage of the consumer who maybe loves football but is intimidated by the menu screens and complexity we deliver on the Xbox 360 and PlayStation 3."
Less traditional distribution models are key as well, Moore said. EA Sports is currently operating a number of franchises like FIFA and NBA Street in Asia on a free-to-play basis, "and our ability to bring this to Western markets is only a matter of time," he added. "We bring in and engage sports fans who may not necessarily have the time or inclination to play a full console football game."
"The incentive for us to make this a business model is of course to convince you to buy stuff," he explained. "[Among] those who actually buy stuff, we're averaging $28 per consumer."
Moore wrapped up his talk by noting that EA Sports is actually seeing yearly growth without significant head count increases, by relying more on outsourcing as well as innovative marketing methods.
Finally, he stressed that while new business models and accessible titles are key, the division's core yearly franchises remain a crucial part of the EA Sports brand's identity.