In the second of our four interviews with various heads of EA's businesses, we discuss retailing and Steam with EA Origin boss David DeMartini
Origin has grown well in its first year. But what's stopping rival publishers from launching their own service?
This isn't easy. We have tried a couple of times to develop this kind of technology. It took us a little longer and was certainly harder than anticipated. So in this iteration I'm glad to say we've been successful. It's completely different to game making. You have to build a unit that knows how to do e-commerce effectively and knows how to have a reliable commerce platform and knows how to deal with friends lists, in-game overlays, cloud saves and stuff that isn't tied to making games.
Aren't there too many digital retailers out there as it is?
There's always room for innovation. Customers are smart at picking out whose a ‘me too' and who is innovating. What happens with the ‘me toos' is that they don't have the creative minds to differentiate themselves and they tend not to last in the long run.
You've recently offered to list crowd-funded games on Origin for free. Why do that?
Crowd-funding is really popular, and the people on these crowd-funding sites seem to be the hardcore of the hardcore. They're willing to back these titles with a lot of money. We looked at that and said: The hardcore sometimes has issues with Origin, but they seem to love these crowd-funded games. Wouldn't it be a great to offer these games the opportunity to have it published without having to worry about the fee?” That allows them to sell it for a lower price so that it's accessible to a wider audience, or it allows them to gain more profitability to invest. It was one of the few things we have done that wasn't controversial and nobody had anything negative to say about it.
During events such as E3 and Gamescom, EA Origin sees a spike in sales
Why is there a negativity towards Origin from the hardcore?
I think it's about change. People forget that nine years ago when Steam launched there was a lot of backlash from the core about having to deal with this Steam thing. ‘What is Steam? Why do I want it? Why do I need this app on my desktop?' Origin represents a change, and anytime EA does something that's significant in the industry, it generates a certain reaction. Anytime we move in a direction somebody has already moved in, people ask Why are they doing that?” Really it's just to give customers choice. We feel we have an opportunity to partner with our internal studios in a way that no one else can in terms of adding exclusive content, or having an insider view on the game that's being developed.
That doesn't mean that people will or can only buy from Origin. If we don't violate any of Steam's rules all of our games are available on Steam – they're certainly available at places like GameStop. It's very much a re-enforcement of the fact we believe in choice. We're just trying to earn your business by being the best downloadable game site that we can be.
Steam doesn't want EA pushing Origin on its service – just as other retailers in the past didn't want to stock games that had Steam built into them. Does the industry need to move beyond this fear of ‘giving away' customers?
We sell games on Origin that are Steamworks-wrapped and we are absolutely not afraid of that. We believe that you earn the customers' business on a transaction by transaction basis, and we are willing to earn that right to be able to sell you a product over and over again. By virtue of the quality of the service that we provide, the loyalty programs and the achievements, we'll try and earn your business back. If we break that chain and you want to buy from Steam or GameStop, great. As long as you're buying one of EA's great intellectual properties we kinda don't care where you buy it.
Think of this: if MySpace had stayed the one answer in social networking and no one wanted to switch to Facebook, then we wouldn't have had the Facebook phenomenon. There are better mousetraps that ultimately get built when other people try and do a better version of what someone has done. That's what we're attempting to do on Origin. Gabe [Newell, Valve CEO] was quick to point out, in the first time he spoke about Origin publicly, that he didn't think we'd achieved that yet. I agree, we're on a path of constant improvement. And I didn't expect to out feature Steam within our first twelve months. But I'm optimistic that we will differentiate ourselves as a service. The first year was about putting a good foundation together and if you take a look at where we started and where we are now, you'll see a constant release-by-release improvement.
Gabe Newell mentioning you on-stage must also highlight how far you've come.
He has never uttered the word Origin before. There were a few pregnant pauses in his comments, but we are now in the conversation. If 12 months ago you would have said we'd be in the conversation, I would have been pretty happy. And when you look at the fact that over 12m people have downloaded Origin, we have over 50 partners on the service in less than 12 months, and we did over $150m in revenue, which represented over 400 per cent growth over the previous year, you can see we are making huge progress. EA is a really interesting place. We have this bar that is set so high, in that whether it is a game or a service, we want to be 90-plus Metacritic at everything. Origin is moving in that direction. We are not there yet. But people come in inspired every day to make sure we are going to get there soon.
What is the split between third- and first-party content on Origin?
Right now the split is heavily EA games. But you are going to see more exclusives and offers from third parties coming onto Origin. If you go onto Origin you'll see third-party titles featured on a daily basis.
What do you do when you have an EA game clash with a big game from a partner publisher?
It is kind of like when 15 or 20 planes are all coming in to Heathrow at the same time, you have air traffic control. You control it so that all the planes don't hit each other. The great thing about being in the retail business is that I don't get to decide what is popular. The players do. So if at any given point in time they are choosing Batman over Battlefield, then great, we are selling a lot of Batman. If two titles launch on top of each other, you put them both in the ring of fame and put them up in the hero images as they rotate through and the customers get to pick which one they really want.
How do you judge Origin's success? Is it about the numbers or the consumer reaction?
It's both. You have to be careful when you run one of these services not to get all caught up in the numbers. In the enormous industry move towards analytics and numerology, it's easy to just look at the numbers and judge the quality of your service based on ‘did I grow revenue?', ‘did this many download the app?' If you obsessively focus on quality, everything else takes care of itself. Don't worry about how much sales growth you have, worry about how good your next feature implementation is and then customers will gravitate to your service. If they gravitate to your service, they're more likely to make a purchase, then your sales will grow. It's like video games. I had the Tiger Woods series for four years from 2002 to 2006. We never worried about how many versions of Tiger we sold, we worried about turning it from a 68 Metacritic, which is what is was before we took it over, to an 82, to an 88, to a 92. By virtue of having that improvement year-over-year the sales, of course, took care of themselves.