MCV talks to Electronic Arts’ European boss Jens Uwe Intat just after the firm announced losses of $276m and revenues of $3.59bn for its FY2011. So many of his answers are peppered with facts and figures first aired during the associated analysts call.
He also, inevitably, echoes the current corporate themes that CEO John Riccitiello pushed to the fore as part of the full year announcement – most specifically the ongoing and much-trumpeted transition from boxed product behemoth to shiny new digital entertainment company.
Only once does he, well, not exactly stray from the script, but certainly give it a bit of oomph. Towards the end of the interview he’s discussing Battlefield 3 and, inevitably, the CoD wars.
Asked if he thinks Battlefield, as a brand, can ever overhaul its great rival commercially, he replies: “Certainly. The only question is when that day will be. And for me, the sooner the better.”
No deviation from the corporate line there, but it’s all about his intonation in that last phrase: “The sooner the better”. He doesn’t quite growl it, but he sure does mean it. Either that or he’s tired of being asked about the question and his ire is for unimaginative journalists, not rival franchises.
First, though, some re-packaged nuggets from FY2011. “HD console and PC revenues grew by 13 per cent in the Western world during the year – and they account for 80 per cent of our packaged goods business.
“So that’s an attractive business in that sense, but it’s also attractive because it offers digital expansion opportunities. People start with the disc and then they buy additional digital content.
“This is the transition between boxed and digital and I would say we’re in a leading position in terms of that transition – and we’re nicely ahead of our own targets. We were planning for $750m worldwide in digital revenues in FY2011, but we actually achieved $833m.”
THE BOXING RING
Back in the boxed world, on a pan-European basis, EA held onto its No.1 position, with an 18 per cent share in terms of value (the same as in FY10). In its Q4 (calendar Q1) it actually climbed to 20 per cent (thanks to titles such as Bulletstorm, Crysis 2, Dead Space 2 and Shift 2: Unleashed) compared to 17 per cent in the same three months last year.
Intat offers further evidence of EA’s progress away from the packaged goods sector via some FIFA stats plucked from the FY2011 highlights package. FIFA 09 (released in ‘08) generated $15m in digital revenues, whilst FIFA 10 (released in ‘09) clocked up $32m. Up to March 31st, FIFA 11 managed $46m, but Intat expects it to eventually double FIFA 10’s total, so it should climb to about $64m.
The publisher’s digital revenues should receive a substantial boon later this year with the release of Star Wars: The Old Republic, the eagerly awaited MMO.
EA isn’t discussing its expectations in terms of sales and subscribers, but it has revealed that over one million consumers are participating in a free beta programme.
Intat says: “The MMO sector has been more polarised than any other and it is a difficult one to get right. But we are in a good place to make a strong play. For a start, the franchise is one of the most admired in the world of entertainment and has an amazing number of fans.
“We have one of the most admired studios in the world, BioWare, making a great product which we feel very confident about.”
Where confidence wavers slightly is in regard to the release date. Another much-repeated line from the conference call revealed that there is “an outside chance” of the game slipping to 2012.
Intat says: “The reason we’re hesitant is that, even more than with a traditional product, it is crucial we get it completely right at launch because we need people to not just buy the game, but to subscribe to it and commit to it – and to have a great experience from day one.
“It’s also very complex to build, including all the back-end infrastructure. And we want to be sure that we can hold to the launch date when we announce it. So we will only do that when we’re comfortable we can.”
There are parallels in terms of the challenge and the ambition, between Star Wars and Battlefield. In both cases EA is a long way behind a market-leading brand owned by its fiercest rival Activision Blizzard.
In MMOs, it’s World of Warcraft, in the shooter space, it’s Call of Duty.
But whilst World of Warcraft is, almost literally, another universe, Call of Duty is the noisy neighbour. It’s the firm’s No.1 ‘take down’ target.
If EA is Ahab, then Call of Duty is the (heavily armed) whale.
Intat is confident that the tide is turning: “With Battlefield 3 we have a superior games engine and a top notch product. We are convinced that we will, in fact, have a better product than our key competitor in the space. We think this is the perfect year to gain back market share.”
Strangely, whilst EA’s core corporate strategy with regard to boxed product is “fewer but bigger”, it hasn’t really applied that to the FPS sector. Battlefield is just one of several shooter brands the publisher maintains, others include Medal of Honor, Crysis and Bulletstorm. Obviously there are nuances in content and different games will appeal to different gamers, but there’s also a lot of shooting things.
So, does this year’s activity and bullishness suggest that Battlefield is the brand? EA’s champion?
“It’s our champion this year, yes. But it is true that we have a few more in the genre, so we will see how many different franchises we will continue with in that space.”
Pushed on whether that means there may be some sort of brand cull, meaning EA can put all its considerable weight behind fewer products, Intat sticks to the script and simply re-states: “We will see how they develop.”
But Battlefield is surely a notch above the rest, in terms of EA’s priorities, and not just this year. It’s the one that might, one day, match or surpass the sales of Call of Duty.
Most pundits would view that as a distant goal and, should it come to pass, an incredible achievement. Intat, however, sees it as inevitable, merely a question of time – the sooner the better, in fact.