EA has had a really good year in Europe in terms of market share. What were the key drivers?
We had an excellent start to the year. Army of Two, Dante’s Inferno and in particular Battlefield: Bad Company 2 sold really well.
It shows our strategy to focus on fewer, bigger titles coming to fruition. We’re focusing on a balanced portfolio of existing brands and new IP, and that has paid off because we have stronger launches and we’ve managed to push our titles for longer – as proven with Battlefield: Bad Company 2, which is still in the Top 40 of the UK charts.
Is this market share momentum something you can maintain for the rest of the year?
We still have three very, very strong launches ahead of us: FIFA, Need for Speed and Medal of Honor, all of which should help us to maintain our market share for the rest of the year at least. We expect those last two will make a strong comeback.
Over the last couple of years, FIFA has been an excellent performer and we continue to grow market share over Konami. It also shows that our products do get better – FIFA’s Metacritic scores keep going up. We have a clearly superior product over Konami, which we did not have in the last generation.
Can you to do the same for Need for Speed and Medal of Honor, which are returning to much more competitive genres?
That depends on the finished products. With FIFA, we always had strong marketing and sales programmes but were hitting a ceiling with the product quality. With the quality now coming back, we can really step up. We still have stepped up our marketing but it comes down to the product.
And product quality is something we see improving strongly on Medal of Honor. It’s a very strong brand, very well-known and well-liked by consumers, and this year the product itself will be much stronger. The combination of digital marketing and advertising with the strength of word of mouth – something that really helped FIFA – should help the comeback of both Medal of Honor and Need for Speed.
The big question is: what are your expectations for Medal of Honor as it comes up against Activision’s Call of Duty?
We’re not going to outdo Call of Duty with this year’s Medal of Honor but it will get dangerously close. This is going to be a journey, as it has been with FIFA. And we actually have two IP bullets in our gun – if you’ll excuse the metaphor. Battlefield: Bad Company 2 sold very well this spring and in some countries it came close to outperforming Modern Warfare 2. In the years to come, we’re definitely going to beat Activision and Call of Duty.
There’s an opportunity to gradually encourage consumers to migrate from a rival franchise. Is that the plan?
Actually, our long-term strategy in most genres is just to have the best game with the biggest audience. We already have that in the football sector and the racing market – although we can make Need for Speed much bigger. And we certainly want to get back on top for shooters with Medal of Honor.
And let’s not also forget we have leadership in family markets with products such as The Sims 3 for console and Harry Potter – all for people that do love video games and spend a decent amount of time with them, but want a much more casual experience.
In the last six to twelve months, that casual sector has dropped off in Europe – predominantly because Wii and DS hardware sales have slowed. How does this affect EA?
We’re certainly not going to walk away from Wii. Traditionally, third-party publishers are stronger on Microsoft and Sony platforms than on Nintendo, so 360
and PS3 getting stronger certainly suits us. We’ve always concentrated on those two formats because we have products that sell particularly well on those, which helps us maintain or increase market share.
EA and Sony have become closer of late – FIFA marketing, DLC extras, and so on. Why? Has the console caught up with 360 to the point where you want to invest more in it?
We could certainly see Sony come back – in the UK it’s still a head-to-head competition between PlayStation and Xbox, but on the continent Sony is traditionally stronger than Microsoft. But we’re very happy to watch the competition, because as long as they’re competing to get more consumers in, there are more people we can sell games to. It’s interesting to see that both companies embarking on a slightly different path when it comes to controlling games. Kinect and Move are both very interesting ideas.
Obviously you’ve incorporated both Move and Kinect into some of your games, but are you waiting to see which becomes dominant?
It’s less of a question of which one is going to win and more a question of which will achieve critical mass. We always support a platform where we believe we could get critical mass. It doesn’t have to be a winner as long as the installed base will be interesting enough that we can actually develop games and recoup our costs.
We’re certainly not waiting until those two become established. Because it’s always games that drive hardware sales. We’re very confident that Kinect and Move will both grow very interesting installed bases, globally and in Europe, and we’re trying to have a few games early on that make these controllers interesting.
In EA’s most recent financials digital sales were declared a meaningful part of its revenues. What does that mean from EA Europe? And it’s a clich to ask – but is it gradually killing off boxed products?
For us, online comprises a number of areas. We have our mobile gaming revenues, digitally distributed games on the PC, paid-for DLC, and casual games like the ones by Playfish.
I don’t think online will kill boxed product, or vice versa. One may overtake the other, but we don’t know when. The growing portion is going to be the digitally distributed content. On PC, the numbers vary depending on who you ask – on some products, we have between 10 and 30 per cent of consumers download the full game in North America. We actually see some decent numbers in Europe also emerging, but it will take many years until this overtakes packaged goods.
And most of those products will start with a boxed product before we extend the experience online. We’re in the position to keep games fresh, to offer more additional content in a much more convenient way.
Take The Sims, for example: we always traditionally have expansion packs but you don’t have to go to the store any more. For quite some time, we will see both at the same time – we’re even looking into giving people the opportunity to buy the digital content in stores, with retailers helping to explain PDLC and so forth to customers.