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JR: EA “dropped the ball,” but has best IP in the industry

Wednesday, 16th February 2011 00:21 GMT By Brenna Hillier

EA CEO John Riccitiello has said the firm has emerged from a transitional period with both the strongest core portfolio in the trade and increased digital focus.

“If you go back seven years, we were the leader,” the CEO said, giving a speech at the Goldman Sachs Technology and Internet Conference in San Francisco.

“And we dropped the ball. Our IP deteriorated, our costs went up, and we didn’t really have an answer for the rise of digital.”

Riccitiello said that prior to the “transition” of the “PlayStation 3 era,” EA had eight core intellectual properties, but a few years later, was left with only three.

“Need for Speed ended up flat on its back,” he offered as an example. “That annual sequel thing got to us.

“That was a very tough business run. We just didn’t have the portfolio.”

“We have the strongest intellectual property portfolio by far in the games industry today.”

But now the CEO feels the company has rebounded with several new properties – BioWare’s chief among them – and a resurgence in the core packaged game market.

“We have the strongest intellectual property portfolio by far in the games industry today,” he said.

“The core market for high definition gaming is a huge and fast-growing one.

“It’s a great business, it’s growing, and it’s where IP is created that spreads out onto other platforms,” he explained, citing FIFA, Need for Speed and Mass Effect as examples of titles with ex-console spin offs.

As well as resurrecting a flagging portfolio, EA’s decision to push for the digital dollar – as suggested by the company’s recent financials – is a key strategy.

Riccitiello mentioned a “dramatic” number of changes to the company based on the key phrase “transformation and turn around” based on “pure products”. The publisher’s return to a market-leading position was spear-headed by digital growth and reduced production costs.

Riccitiello on: EA Partners as a platform

“Our most important asset is turning ourselves into a platform,” Riccitiello said.
“Our technology base – all those users, all those registrations.”

EA’s Gun Club is an example of the publisher’s ability to connect directly with its userbase, becoming a destination in and of itself for gamers.

“In a way, we’re booming a media network ourselves,” the CEO explained. “We’re going to use that platform effectively not just for our own content but for the best of third party content.”

Going digital

“We’ve built the leading position,” Riccitiello said, referring to the company’s online, mobile and social gaming presence.

He compared the console scene – dominated by Activision, EA and platform holders – to the digital world, where “half a dozen companies, several players and… the riff-raff” all have a stake, but that for EA, digital is “the fastest growing part of our business, and we’re one of the fastest growing businesses in the industry today.”

Riccitiello said if you add up the man hours recorded in online gaming, the figures are staggering.

“But what’s surprising is that it’s starting to monetise.”

“People seem to like paying for games,” he added, comparing the booming games industry with other media struggling to survive the internet age, such as newspapers.

According to Riccitiello, micro-transactions are proving the most rapidly growing non-traditional revenue model – and nobody saw that coming.

“Play first pay later – that’s a very compelling model for today’s gamer,” he said.

Ricitiello answered a query on the “catalogue” question – the failure of games to continue monetising after sale, and the loss of earnings to the second-hand market.

“The alarm that went off for us two or three years ago is largely gone,” he said, after mentioning EA’s Online Pass system and continuing downloadable content as counter-tactics.

EA is now seeing “significant revenues post-release”, as games “stay in the tray longer”.

Riccitiello on: the cost of production

“For major titles, we’re – if not the – low cost producer, pretty well right there,” Ricitiello said of EA’s in-house development.

The company has a “religion of cost” designed to ensure games are profitable, but still meet and exceed industry standards of quality.

“I feel really good about what our teams have been able to do.”

Dead Space as core IP

When listing the publisher’s core properties, Riccitiello explicitly excluded Dead Space from the list.

“It will probably take Dead Space 3 to get into that 5 million core,” he said.

He did confirm the recently released Dead Space 2 is selling like hot cakes, though, after early reports of double first week sales on the original.

“Sell-in numbers can be a little misleading,” he mused, preferring to talk “sell-through” figures: Dead Space 2 has seen “100 percent growth” on its precursor in “a number of weeks”.

Motion controls

“Sell-in numbers can be a little misleading.”

Riccitiello was cagey on the subject of both Microsoft and Sony’s entries into the motion wars, describing Kinect and Move as quite literally “peripheral” to the core high definition gaming business.

“It’s horses for courses,” the CEO said, adding that adoption of either “new interface” would be very “genre-driven” and unlikely to encompass major sellers like shooters, RPGs and strategy games.

On the subject of EA’s own forays into the market with EA Sports Active: Kinect Ricitiello was disarmingly honest.

“We got clocked,” he admitted.

“EA Sports Active Kinect is one of the best experiences on Kinect; it’s a good experience,” he said, blaming the exercise title’s under performance on the bundled heart rate monitor.

“We learned there was no appetite in the holiday market for that premium price,” he mourned.

Riccitiello on: FPS

“It’s no secret: I want market leadership in first person shooters.”

EA had “established” the FPS market, but lost its lead during the transitional years.

The CEO blamed the dying off of the Medal of Honour franchise on sequelitis. Referring to the “annual franchise problem”, Riccitiello said sequelitis results in developers being unable to “take the time to re-engineer the underlying code,” and that this leads to consumer fatigue.

Going for World of Warcraft’s throat

“I was once a World of Warcraft player,” Riccitiello commented, adding that he had played most MMOs and had great respect for the market leader, but that EA is “going right at it” with Star Wars: The Old Republic.

“Bioware is probably the highest-rated average developer in the history of games and the history of RPGs – which is a pretty good foundation,” he said.

The CEO commented that “lots of products” have tried to emulate World of Warcraft’s “faux-British dark fantasy” feel without success, but The Old Republic repackages dark fantasy in a familiar sci-fi skin.

“We think that’s just enough innovation,” he explained, suggesting players swap swords for lightsabers and steeds for spaceships. “Lots of people want to live out that Star Wars universe,” he added.

Moreover, The Old Republic is “the first talkie” against Blizzard’s “silent movie”, referring to the MMO’s full voice acting.

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39 Comments

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  1. DSB

    I’m kinda hoping to see some outrage over Ricitiello basically saying they want to pursue monetization on online play. Really, that should’ve happened once Madden 11 arrived.

    Still, I’m impressed that he came clean on the way the company was going until recently. I still think they could benefit a lot from shaping up and focusing on a number of developers that might be doing fine, but are nowhere near where they were 10 years ago.

    #1 3 years ago
  2. xino

    he is right…but now they need to fix their UK connection because of the constant disconnections!

    sadly I won’t be getting Crysis 2 day one because of this unsolved constant problem!

    #2 3 years ago
  3. HighWindXIX

    They do have the best IPs in the business really. They need to consider Dead Space a core game though, regardless of selling. Word of mouth on that game is off the charts and if they keep supporting the franchise, Visceral will keep making incredible games.

    With Battlefield 3 and Mass Effect 3 coming out at the end of the year, EA is primed to make some serious cash…

    #3 3 years ago
  4. Crysis

    I wouldn’t say they have the best IPs, likely the most but quantity ≠ quality, I prefer how much work they do with third party devs(& smaller publishers), compared to their own in house work.

    #4 3 years ago
  5. mojo

    for a cross plattform developer/publisher they do have some pretty decent ips, no doubt.

    #5 3 years ago
  6. Patrick Garratt

    EA really does have the best core spread in the industry, bar none. Note what THQ’s doing in terms of focusing on “creativity” and “quality”. Bilson’s tack really resembles JR’s over the past few years. EA will have an awesome 2011.

    #6 3 years ago
  7. Syrok

    They could make it even broader by giving Mirror’s Edge another chance. :)

    #7 3 years ago
  8. back_up

    only sony has the best IP
    nobody else

    #8 3 years ago
  9. Patrick Garratt

    @8 – Pack it in or I’ll delete you account. I’ve had too many complaints about you.

    #9 3 years ago
  10. Kerplunk

    @9 – Make sure you take care of those ‘sucky’ trolls that constantly appear in other commment threads whilst you’re at it.

    #10 3 years ago
  11. back_up

    @9
    truth hurts
    prove me sony doesn’t have best IP than any other publisher

    #11 3 years ago
  12. Patrick Garratt

    @12 – Last chance. One more and I’ll delete your entire account. Up to you.

    #12 3 years ago
  13. back_up

    @12
    i am not getting it
    why are you not prove me wrong

    #13 3 years ago
  14. Kerplunk

    @12 – If that’s the guy’s opinion let him have it. There’s far more persistently disruptive and antagonstic commenters around that would benefit from your attention than this guy.

    #14 3 years ago
  15. xino

    @Back_up

    this is different man!

    Sony is a console manufacturer and of a course publishers.
    But this competition is about publishers vs publishers, Sony is above other publishers like Activition, EA, Tecmo etc Those publishers I listed are the ones who work for Sony as in provide Sony games for Sony to approve.

    @3
    Dead Space is made board now with Extraction and Extraction is total kick ass! I can’t wait to show my sis.

    #15 3 years ago
  16. Patrick Garratt

    @13 – I am not “prove” you wrong because all you do is troll. We’re all sick of it. Stop it.

    #16 3 years ago
  17. Patrick Garratt

    @14 – Which ones? I’m getting bored of people moaning about these threads. Tell me and I’ll warn them, if warranted.

    #17 3 years ago
  18. Kalain

    @back_up

    Saying sony has the best range of IP’s is only your opinion.

    In my opinion PC’s have the best range of IP’s. See, opinion. We all have them. We’re all different in what we like and dislike. Get use to it, you’ll realise this as you grow up.

    #18 3 years ago
  19. back_up

    @15
    so what if sony is console manufacturer
    we will neglect sony as publisher ???
    metacritic also listed ninty, ms and sony as publisher

    #19 3 years ago
  20. back_up

    @16
    yay i get it
    you proved to me

    #20 3 years ago
  21. Zurtech

    @14
    I think Pat’s well within his rights to do so. The guy’s not just a troll, he’s a rude biased troll who just posts to get a rise out of other posters. All he’s done is bring down VG247′s fun *aura* if ye will, and most likely put off other people from joining the site and posting.

    #21 3 years ago
  22. back_up

    @18

    what do you mean by PC we are talking about publisher here not entire PC
    and i said Sony has best IP not PS3 has best IP’s

    if you like PC games it’s good i am not against it good for you

    #22 3 years ago
  23. Patrick Garratt

    Well, any more problems and you’re gone. back_up, you’re more than welcome here, but only if you stop being a twat. Stop being a twat. I won’t tell you again.

    #23 3 years ago
  24. Kalain

    @back_up

    Since Sony publish PS3 games 99% of the time, with 1% being PC EQ1/EQII/PS/DCUO, I concluded that you must be talking about PS3 only games, since you have an insepid hatred of all things PC gaming. I take this from your posting history and the way you always said that “PS3 is best”, “Sony best games” and “PC gamers are all pirates”.

    So, am I wrong in this assumption?

    #24 3 years ago
  25. Kerplunk

    @17 – Thank you. My personal opinion is that “itsucks” and “sony_sucks” have an equally one-dimensional input to the comment threads they contribute to. This is only my opinion though, you may wish to get feedback from others.

    #25 3 years ago
  26. back_up

    @24
    again i repeat doesn’t sony have best IP (not PS3)
    what do you think ?

    as far as these statements
    PC gamers are pirates = most of dev say these (except blizzard & valve)

    PS3 is best ? if not prove console which is best

    sony has best games = Uncharted,infamous,resistance, ratchet and clark,warhawk….

    #26 3 years ago
  27. Gekidami

    ^ FROM ORBIT!

    @25
    And they’re obviously the same person. Blantant sock accounts should be deleted without warning.

    #27 3 years ago
  28. Blerk

    Didn’t you get deleted yet? :-D

    EA are massively improved on where they were. It’s slightly ironic that what they see as ‘dropping the ball’ I see as ‘much better than they were before’. I wouldn’t want to see them going back to being a shit-shovelling factory like they used to be, or end up like Activision. They’re big, yes, but they can also knock out some blisteringly good stuff when they put their minds to it.

    Personally I’d like to see them put even more into new IPs and sign up more teams to the partners programme, use the traditional IPs to feed less traditional output. They’ve been doing a decent job of that, I think. Being ‘leader’ isn’t always the best thing to be.

    #28 3 years ago
  29. Kalain

    @back_up

    And we go back round again.

    In your opinion, yes. In my opinion, no. The only decent IP they have, in my opinion, is LBP and thats it. I wouldn’t say it was the best as I think other IP’s are better (Starcraft, Sins of a Solar Empire, Dawn of War). Remember, my opinion.

    As for the devs. You do know that sale for games are not really affected by piracy don’t you? I mean, if they were the industry in the 90′s, which was carried by the big PC games such as Deus Ex, Baldurs Gate etc etc, would’ve collapsed due to Rampant piracy! No, piracy is an excuse for poor sales.

    For instance, look at Crytek. Crysis 1 didn’t sell well at the start of it’s life due to unoptimised code and needed a PC which had bugun life drinking a can of Irn-Bru. But, when sales picked up after people began their upgarde cycle, it sold millions and Crytek was able to buy 2 studios and begin development on Cryengine 3. Remarkably, you don’t hear about the issues they had with piracy on Crysis/Crysis warhead because it turned a healthy profit for them.

    From the otherside, you had CDProjekt with The Witcher. A small company making a brilliant game which people went out and bought. Yes it was pirated, but they didn’t care about that as much as other companies because the game sold very well, for them.

    Piracy is just an excuse for poor sales.

    If I’m to believe my friends in the gaming industry, then the PS3 and 360 are on par with each other. They are both capable devices and both have their pros and cons. I’m probably more likely tobelieve them since they know what they are talking about and not many people on here do.

    #29 3 years ago
  30. Kalain

    Anyway, on the post.

    EA have begun to move in the right direction, I wish they would market PC centric games better, but I guess thats the sign of the times.

    #30 3 years ago
  31. back_up

    @29
    why you are finding to so hard to understand i am only talking about publisher
    “”again i repeat doesn’t sony have best IP (not PS3 as a whole)”"

    Starcraft, Sins of a Solar Empire, Dawn of War all are published by different publisher

    #31 3 years ago
  32. Blerk

    I wouldn’t necessarily agree, but is I think in a straw poll of gamers worldwide Nintendo would probably win the ‘best IP’ slap-fight.

    #32 3 years ago
  33. Maximum Payne

    @31 By that logic Microsoft also have awesome IP. Alan Wake,Gears,Halo,Forza,Fable,PGR…
    And so far as Sony ip i think only God of War,Uncharted,GT and Killzone are great selling games and others are medicore for rest of people.

    #33 3 years ago
  34. Erthazus

    I don’t agree at all. AT ALL.

    There are some ULTIMATE franchises like Battlefield.

    But start compare EA to Blizzard (not Activision) or Take-Two, Rockstar and everything goes a bit down.

    The one thing that is for sure is that EA begun to move in the right direction. They started to deliver.

    #34 3 years ago
  35. KL

    @33Quantity doesn’t equal quality.just saying
    Bayonetta,Okami,ICO and many more had poor sales but they are some of the greatest quality games.
    As for the troll,Sony doesn’t have the best IP’s.They just happen to have a wide selection published over three generations for almost every taste, that’s all
    as said quantity doesn’t equal quality

    #35 3 years ago
  36. Maximum Payne

    @35 I agree just like Alan Wake.Point is Sony don’t have best IP’s :)

    #36 3 years ago
  37. Crysis

    You can’t simply call any IP ‘The Best’, that’s only an opinion, you could say that you prefer one publisher’s games over another, like I tend to like Sony IPs much more than others but I’m definitely not saying that Sony has the best IPs.

    #37 3 years ago
  38. DSB

    So no one cares that EA are going to try to earn money on online play?

    Okay then!

    #38 3 years ago
  39. ManuOtaku

    @26
    again i repeat doesn’t sony have best IP (not PS3)
    what do you think ?
    No it doesnt, the best is just a subject matter what i find best, maybe you dont, and otherwise, so i go with the most sold franchises and/or ips in history, and believe me they are not too many sony games in there.

    as far as these statements
    PC gamers are pirates = most of dev say these , so the psp, the playstation2 or ps1 were not pirated, or do no have pirated games, come on…… they were more than the pc

    PS3 is best ? if not prove console which is best,
    again look at the sold standings ,iam not saying that this means the wii is the best console, but for each gen basically the one that sold the most was the best, for me the xbox and gc were better consoles with more horsepower than the ps2 but ps2 was the best console since it came first, so i think is not

    sony has best games = Uncharted,infamous,resistance, ratchet and clark,warhawk….
    As nintendo has mario galaxy, zelda, pikmin, kirby, mario kart, fire emblem, etc or microsoft halo, fable, gears of war,alan wake, so it is pretty even if you ask me

    #39 3 years ago