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Getting EA Ready for the Future


March 26, 2012 Article Start Previous Page 3 of 4 Next
 

Do you think that current retailers are learning the lessons they need to be learning now, fast enough, as much of the business goes away from retail and toward digital?

RH: What I see is different people reacting in different ways. Walmart is spending a lot of effort trying to figure out what it means for them. They have essentially bought a TV company, and their vision of that TV company is not as a straight TV. That's emblematic of them understanding they need to change their relationship to the value proposition, from my perspective.

Companies like Best Buy, what you see them doing is taking their digital distribution assets very, very seriously, and spending time and money to be effective in that place and doing experiments -- crazy things like Gaikai -- to try and be a difference in that business.

So we have a sales guy named Tom Cipolla, who I've known for 25 years, and we love each other to death. And I worry about his future, but I've been telling him for the last three years that I think he needs to be telling sales people "It's going to be okay."

And the reason why is because if a retailer has a relationship with 20 million customers, they're not going to someday be stupid about that. They got to that position because they understand how to talk to those customers, how to bring value to those customers, and how to produce some outcome with those customers and have helped us over the years.

It is very likely that if they run a digital distribution asset -- and they do as good a job as they learned how to do a brick-and-mortar -- that we're going to want to do business with them. And that means that those sales people will have jobs, except without standard return allowances, which they will be pretty happy about.

There are going to be some that go away. Absolutely. But I think to believe that they all die and Amazon is the whole winner, I think, dramatically underestimates the talent of people who run retail and their understanding of customers.

I do see that in a lot of cases sales and marketing are, to some extent, unnecessary for parts of this new business.

RH: They're different jobs. They're not unnecessary; they're just different. So marketing is a day-to-day job -- it's a radio job, not a movie release job. And your relationship with the customer is driven by a whole bunch of new things including understanding a collection of numbers you've never been responsible to understand before.

The sales job, I think, is evolving into understanding how different markets are accessed, what are the tools of communication that work in those places, and then crafting an individual digital offering for each one of those players. These are big, meaty problems -- I think they're better jobs.

Do you think we're going to get to the point where, rather than hardware savvy, it's going to be much more network and service savvy as things go more cloud-oriented, for the value proposition for presenting a game? Like, theoretically, I can play OnLive stuff on an Android device, and I can just have Batman: Arkham City on my phone that can't run Arkham City.

RH: Yeah, I think all the growth in the business for the last eight years has been people outside of the core. The vast majority of the places they're playing are not at home with a 20 foot experience from their television set; they're doing it where they are, at the time that they are. They're paying for it when they want to, the way they want to, and they're running it on the devices that they have.

For those people, the competition is really much more about their time than money. If you gain their time, you'll eventually gain their money; if you lose their time, you may not get them back. And so for us that's the challenge on these platforms is to create an experience that feels pervasive and ubiquitous across those platforms. That they don't want to go anywhere else and they don't want to spend time anywhere else, or at least limited amounts of time in those places. That's really our job.

Do I think that that's going to change the specialization in this business? It means that the services and products that customers value will increasingly be content and services that are delivered through network services that the piping and architecture of them has a lot to do with how they're qualitatively perceived. Game teams in the future will have great network engineers on them, because they won't be able to produce their services without them.

But do you think someone could have or should have sold Minecraft to customers, aside from just Notch himself?

RH: So I don't know if Notch cares -- in fact, I'm pretty sure he doesn't. What I've told the guys who run Origin for us is that we should do it for free, because as you can see my vision of that business, that's not where the money comes from anyway.

As somebody who has had to reinstall Windows on my son's computer after he attempted to install Mod Manager on that machine, there's a lot of value to be provided for the customer in making Minecraft and its mods and installations something that's a more commercial and predictable product.

And those are the kinds of things that Notch needs help with, and that without the help of a publisher or other support, he's probably not going to get there completely by himself. Now maybe his community will, and I'd love to see that happen. It's a great experiment; I'm really anxious to see what happens.

The reason I wish we were involved is because I think we'd learn from him. And the other thing that's true is Notch is a true talent of this business; I just like us being associated with great talent. So from my perspective, I'm watching Minecraft with both eyes -- sometimes with a third and fourth, because my wife is trying to manage my children's behavior. But what we think is true about it is that it is a style, and not an end in itself, and that the long-term evolution of it as a business has to do with the things that go around it, and not just the client.


Article Start Previous Page 3 of 4 Next

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