Video gaming is a world of absolutes. Live or die. Win or lose.
Whether you work in the industry or are a consumer, the market conditions us to think this way. We expect a world where a single franchise will dominate each genre, no prisoners taken. Digital is tipped to consume retail, as boxes are fighting a losing game.
This conventional wisdom usually holds water. Unless you’re EA.
It’s the year’s most successful publisher of boxed games, but is growing – and fast – in digital sales. It has a dominant role on format-holder controlled consoles, but has pushed hard into open PC, mobile and social areas. It’s the underdog in a war on Call of Duty, but expects to conquer it.
This firm is, unlike many others, straddling two worlds, not placing its bets on one or the other. Speak to EA’s European publishing SVP Jens Uwe Intat and it’s clear that EA is operating across two worlds. Old and new. Retail and digital. Closed console and open PC.
“It’s stimulating, motivating, and fun,” he tells MCV when we meet him and ask about EA’s swift transition to a publisher with its eye on emerging digital opportunities. “It attracts me, and makes my job more interesting rather than doing the same thing every year.
“For me, being ‘digital’ means you look at everything – we talk to our consumers differently, distribute games differently, and provide more content for those games. And there are new roles in companies for all those things.”
Even Battlefield 3, he says, will have to live with a dual approach – the venerable franchise now has a new role for its owner. Battlefield will even co-exist with Call of Duty, at least in the short-term.
“We will give Activison a hard time in the space. And we have done it when we won back the football category from PES. That’s what we are doing in the shooter space. One of my favourite sayings is ‘Rome wasn’t built in a day’. We might not do it Day One, but we are going to take a decent amount share from Activision.
“In broad numbers, Activision has 90 per cent of the shooter market, and we want to see that go down to 70. I would be even happier if they were left with 60 per cent.”
The long game here is to erode Call of Duty via – more duality again – a classic boxed product supported year-round by digital content. It exists through a physical retailer, but survives through web.
“The poster child for the model really is FIFA. Ultimate Team has proven that we can give a compelling experience every day, and also monetise it.”
But the increasing success of FIFA, and planned success of Battlefield 3 – which will have an active DLC plan and an associated social wrapper called Battlelog – does surely suggest an inevitable decline in the importance of a boxed product, doen’t it?
Not so, says Intat: “For now the two are very additive. And for the foreseeable future the journey for many consumers starts with a boxed product. You can also download games on PC, and some first-parties let us do that through console. Most consumers just want to have a physical copy, or give it away as a present – because a gift is better than a voucher.
“Over time those models might evolve, but the journey still starts with the boxed product.”
It’s certainly a different view to the one that suggests games will be downloaded more and more.
“I don’t see that. To put a boxed product into retail is creating another opportunity to buy and another opportunity for retail to sell. So the value chain doesn’t necessarily mean you eliminate parts to get more percentage for yourself – you have to look at both what your percentage is and the size of the pipe. By putting boxed products out there you increase the size of the pipe and your overall addressable market. All that’s happening now is that we are giving customers more variety on how they can get their product.”
EA even sees two dual trends emerging in the boxed game slump of 2011, he says.
“Up to now for the calendar year we have seen some decline in the packaged business. But first we are seeing gains in the digital space, and we’re very curious to see how well Christmas will do.
“We see two trends: some franchises that will sell year round, but at the same time we see polarisation around Christmas too. It gets bigger and bigger every year.”
OLD WORLD MEETS NEW
EA’s dual approach has also seen it push heavily into open formats like PC, mobile and social. In this world, away from the fixed control of console manufacturers, EA sets the rules. Its all-encompassing Origin platform is built on this principle, and will be built into all of its games.
The thinking, says Intat, is to simply be ready for any gamer, anywhere.
“FIFA 12 coincidentally happens to be released on 12 platforms. That is us giving every opportunity to play a game. We look at each format and weigh up if it has the installed base right for each IP.”
Is there not a cannibalisation between new formats versus old?
“Well cannibalisation, except amongst humans,” he jokes, “is really hard to measure. You’re left asking: How much of what we sell is actually incremental? And how many people would have bought the console game but now play on Facebook? You’ll never know. The point is to be there on those formats in the first place.”
This is why free-to-play – another contrasting factor, the total opposite of any model where you pay upfront – is becoming such a crucial part of the EA portfolio too. At Gamescom the firm announced a new free-to-play Warhammer title and launched The Sims Social.
“These games are for two audiences,” says Intat. “One is the people who already like a franchise and get an additional opportunity to play it – take The Sims or FIFA on Facebook. So we can offer more to those.
“But secondly it also attracts more people. For them Facebook is an entry to The Sims for FIFA. They can then choose to step up to those games on console or PC where they have a richer experience – higher resolution, stronger AI, or bigger teams. Think of it like going from TV show to a movie experience.”
Get Jens Uwe Intat talking about another dual topic, though, and he becomes a little less pragmatic. The FIFA versus PES journey is one that has proven, hands down, EA can reclaim a losing battle. As he says above, it’s the template the firm is following for Battlefield.
“What we did there is look at our code, and return with a better game, and better technology. Then we took back market share and then claimed the majority.”
FIFA the game has grown and grown – as too has football in general, he points out.
“In football, the differently shaped balls are differently attractive on the two sides of the Atlantic. Here we play with a proper round ball, and over there they play with that oddly-shaped ball,” he quips.
“But FIFA is actually getting more and more attractive in the US. Not the least driven by the phenomenon of soccer itself – the US women’s team has done well, and the male team… well, they’ll have a bit of a wait. But soccer generally is played more in the US than ever before. So FIFA is catching up there, more than Madden ever will in Europe.”
He’s joking – in part, at least. But the joke speaks to the biggest truth of all: EA sees all the opportunities. And while it may be playing the long game on things retail versus digital or closed formats versus open ones, in the end it expects to be the absolute victor.