EA talks Gaming 3.0

EA Sports’ senior vice president and worldwide head of development Andrew Wilson spoke at the Develop Evolve conference in Brighton, giving the publisher’s view of ‘Gaming 3.0’.

"There’s a lot of hype around right now," he explained, by way of introduction. "Everything seems to be about this digital age, and this digital age of gaming… It’s very easy to get caught up in the hype. The question I get the most from people is ‘Is this the real deal?’" In other words, will mobile, free-to-play, social gaming and other new business models have a lasting impact?

Wilson said it’s important to look at the numbers to answer this question. "While our industry is growing, the growth is very clearly coming from digital," he said. "Digital now makes up a far bigger chunk of the overall industry revenue that we saw in 2010, and that continues to grow." Specifically, digital was 45% of industry revenues in 2010 – $19.9 billion – compared to 31% in 2008 – $12.4 billion.

What has been driving this growth? Wilson talked about the shift from the games industry’s focus on the core gamer in the days of PS2, GameCube and the original Xbox, to the disruption that started to happen with the next generation of consoles: Wii, Xbox 360 and PS3, and to today’s market of many mobile phones, tablets, handhelds and other devices.

"With all of these new platforms that we’ve got, the good news is it’s brought in more and more gamers," he said. "The challenge is what does the gaming experience look like on these platforms?.. Those companies that have the greatest success will be those who figure out what a connected experience will look like across those platforms."

Wilson said this is not just a development and distribution challenge, but also a marketing challenge. He also talked about social games firm Zynga, pointing out that its success has been built just as much on marketing as on other factors.: "What Zynga would have had us believe was that viral was key to their success… they’re spending in excess of $100 million a year in marketing these free-to-play games."

He went on to talk about fundamental changes in various entertainment industries, and how changing consumption behaviour is what has changed how people develop and make money from digital media. The key: people have taken control: over what device they listen to music on, what time they watch TV shows and so on.

"Ten years ago we said we want to do music our way. Five years ago we said we want to do television our way. And now what we’re saying now is we want to do games our way… We wanna see an evolution in this sapce. We wanna take control of games in the same way we have taken control of music, television and movies. And the result is we as an industry have to change our business models… There is a consumer shift happening here in the same way as it did in music and movies, and ultimately if we don’t get ahead of it, we’re going to be in a little bit of trouble."

Wilson said there is a big need for the games industry to "learn the lessons" of the music and movie industries from the last 10 years. He even threw in a quote from economist Joseph Schumpeter about the "perennial gale of creative destruction" in response to new business models.

He praised two particular companies in the wider entertainment industry who are examples of this: Netflix and Amazon. Netflix started in 1999 by dramatically reshaping the DVD rental market – not just by posting DVDs to customers, but by ditching the idea of charging fees for late returns. In 2008, though, it launched its on-demand streaming service, and today has a 60% share of the digital movie market.

"They were called Netflix. They weren’t called Mailflix, Postflix or DVDflix," said Wilson. "They already anticipated that they were going to evolve that business model over time, and that digital was going to play an important role in their future… What Netflix did was disrupt the marketplace, unseat the player that was in control of the experience, gave control back to the consumer and then continued to evolve their business model."

Over to Amazon, who "got digital a long way before the rest of us did" right from their early days as an online bookstore, before proving that its model worked for all manner of consumer goods. But Wilson highlighted the disruption of the Kindle e-reader and Kindle digital store.

The big disruption, though, was shifting to a model where people bought an e-book once, and could then read it on a range of devices without having to pay more than once. "What Amazon did was stay ahead of this curve of creating disruption that Schumpeter talked about," said Wilson. And in 2010, Kindle books outsold hardback and paperback books on the Amazon website.

Naturally, Wilson said EA is looking to follow suit in the games market.

"We’re going to build across every platform that consumers have, and some that they don’t yet. We’re going to make sure everything that we do is socially engaging… And we’re going to capitalise on this notion of persistence and presence: this notion that you can buy once from us, and have complete control of your game in the world."

Wilson said that whenever EA runs focus groups with EA Sports gamers, social interaction is one of the key topics that comes up as being important to players. "Everything we make is social, not just what happens on Facebook." Which is why EA has been investing in its own Origin community, where players have their own digital identity to be used for EA games, that travels with them across various platforms.

He went on to talk about EA’s work with FIFA 11 Ultimate Team, which has more than 3.3 million players, who have played 200 million matches, with 1.3 billion items released into the game – "it’s going to generate $50 or $60 million this year alone".

Wilson also said EA is trying hard to persuade players of its console games to continue playing on other platforms. "If by the time they get to Facebook they’re playing CityVille, or by the time they get to iPhone they’re playing Angry Birds… Every minute of every day that you give to another player is a chance that you will lose them long term."

His final points focused on persistence and presence: people taking their gaming experience with them whatever device they’re playing on. He cited the example of FIFA players signing in to support a real-world club, and then completing challenges on a range of devices to bump their team up virtual league tables.

"Now, rather than going and playing Angry Birds on your iPhone, you’re going to play FIFA on your iPhone, because that’s going to help build your identity…"

He also talked about EA’s attempts to make a business model work across these various platforms, suggesting we’ll see more from the publisher on this score in the year ahead.

"How about we drive towards a business model where a gamer can experience everything you make without having to pay that much more?" said WIlson, before giving the audience of developers some parting advice.

"Move away from having yourselves or your company or the platform holders at the centre of your business vision, and put the consumers at the centre. Because regardless of what you do, they’re going to put themselves at the centre anyway… They’re going to use technology against you unless you empower them to use technology with you."