EA Moving Away From ‘Large-Scale Marketing’

Electronic Arts participated in the Credit Suisse Technology Conference yesterday, where CEO Andrew Wilson and CFO Blake Jorgenson answered some questions from the assembled analysts. The insights into EA’s strategy and how their executives perceive the market in the future are a key glimpse into how EA will proceed. EA’s plans for marketing were also discussed, and the company has some changes in store.

EA’s marketing strategy and spending has changed, and both executives discussed the particulars of the marketing differences. “One of the biggest shifts for us was simply an organizational shift,” said Jorgenson. “Trying to consolidate marketing inside the organization, to stop the sprawl and get it under a single leader. That allows for greater sharing of experiences, greater sharing of skill sets, and more focus on where the dollars are being spent. Longer term, our real focus is to try to move away from traditional large-scale marketing, heavy TV marketing, to more ROI-based marketing that’s very customer to customer. We have a relationship with many of our customers, we’re connected to many of them, we should be able to market to them at a much lower cost.”

The intent seems to be to move Electronic Arts away from mass-marketing techniques towards focusing more on individuals, as the company continues to build direct connections with customers. The enormous audience that EA has built through Origin, online play, and social media forms the basis for a direct marketing connection in non-traditional ways. This is also tied in with the shift to focusing on brands as a year-round thing, rather than a once-a-year launch of a packaged title.

Marketing is intimately tied to the company’s product strategy, according to the CEO. “One of the things that we see, and it’s somewhat counter-intuitive, is you would think if you played a game for five weeks and then put it away by the time the next version came around you would have an appetite that would have built up over the last ten or eleven months to play that game again. Actually, the reverse is true,” noted Wilson. “The closer we can get you in terms of engagement to the next launch, the greater propensity you have to purchase. That’s why we’re investing a lot in the live service post-launch, not just in the monetization opportunity in and around the product you just launched, but because it acts as a key acquisition tool for the next product launch as well.”

Wilson sees growth opportunities in a variety of areas for EA, and that the revenue mix over time will be more even across different categories. “There are three key components that will drive a revenue shift over time. One is geographic based, one is platform based, and one is business model based. I don’t think all of those things are mutually exclusive,” Wilson commented. “Console is potentially a smaller user base than mobile or PC in large markets like Brazil and China, but at a significantly higher lifetime value per consumer at this stage versus the volume play that you get out of PC free-to-play and mobile in these markets, I believe we can certainly get to a more balanced revenue mixed rather than more heavily skewed to console that we have today.”

Asked about next-gen consoles and how they might be doing five years from now, Wilson noted that “five years is very hard to predict.” He does feel that there’s good potential for next-gen consoles, but it’s not assured by any means.  “I think Microsoft and Sony have a real opportunity to build a strong following and a strong installed base while they continue to be the single best way to get high quality, high definition interactive entertainment to your 80 inch television,” Wilson said. “Three or four years from now they’re going to be under some fairly stiff competition for the living room, from mobile providers, from Apple, from Google, from Roku, from Comcast to try and own that living room experience.”

What does the future hold for the game industry and Electronic Arts, and what will be driving revenue in five years? “It might be a hologram that come up through your living room floor,” said Wilson. “For us we are less focused on the device and more focused on the modality of play. We think there’s a lean-back experience on your living room sofa in front of your 80 inch TV, we think there’s a lean-in experience in some form of PC device, we think there’s a lean-over experience as it relates to mobile and tablet.”

PC Sales To Continue Slide

Next year should be an interesting one for PC’s, as far as a report from IDC is concerned.

The forecast indicates that 2013 sales for PC’s will fall approximately 10.1 percent, a slightly higher percentage rate than the 9.7 it previously reported.

 

3D Print Your Own Key To Erebor

With The Hobbit: The Desolation of Smaug set to hit theaters in just a few days’ time, Warner Bros. is running full steam on promotions for the film. For its latest one, the company has announced that it is teaming up with Microsoft for a cross-platform campaign that will provide fans with a key goodie from the film.

This offer revolves around a free 3D printer blueprint of The Key of Erebor, a specific item used in the film. It will run across various Microsoft devices, including the Xbox 360, Xbox One, MSN and Windows 8, and will provide information about key characters, events and artifacts, as well as actor biographies and other behind-the-scenes information.

Fans interested in a free blueprint download for the 3D model can access it and reproduce the item for the cost of the print. It will be available for download on the same day as Desolation of Smaug, on December 13.

Owen Sagness, General Manager for Microsoft Advertising and Online UK, stated, “By offering fans a blueprint for a 3D model of one of The Hobbit: The Desolation of Smaug‘s ‘key’ artifacts, we’re providing a genuinely valuable and unique experience that puts the consumer first, while continuing to deliver for the client and push the boundaries of what is creatively possible using new technology.”

Source: 3Ders

Vita TV Heading West

Sony’s Vita TV allows you to play PS Vita titles on your TV, as well as stream services like Netflix, for about $99. Even though the device hasn’t gotten off to the strongest sales in Japan, Sony is still considering releasing its television-friendly Vita TV device in Western markets, according to Sony Computer Entertainment’s Andrew House.

Talking with Eurogamer, House stated that Sony still has plans to release the device on other markets, despite the fact it only sold 42,000 units during its launch week in Japan.

“The positioning of Vita TV may be different between Japan and some of the other markets,” he stated.

The $99 hardware, which enables playing of Vita, PlayStation Portable and PS One games on HDTV’s, could still find a niche in the market. “We think there’s a great opportunity to broaden the market, because you essentially remove the need to make the console purchase in order to have access to that experience,” added House. “It may sound counter intuitive, because, aren’t you replacing a business that is your bread and butter But part of being an innovative company is being a pioneer in new forms of distribution of content, and we would like to be there first and take a leadership role.”

The Vita TV device is currently only available in Japan.

Source: Eurogamer

$1.2 Billion Southeast Asian Game Market Forecast

Southeast Asia’s gaming market could very well be in for a financial boom, if a report from Niko Partners has anything to say.

Lisa Cosmas Hanson, managing partner for the group, stated that the region – including Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – will reach a whopping $1.2 billion over the next few years.

The gaming market currently hovers around $661 million in revenue, based around 85 million gamers. However, Niko believes the number of gamers will see a huge increase, to 132 million, by 2017.

Not only that, but mobile gaming isn’t the only part of the market expected to rise. PC games will also play a huge role in the market increases. “Mobile games are booming in Southeast Asia as they are worldwide, yet client-based PC online gaming remains vibrant and will continue to experience aggressive revenue growth over the five-year forecast period,” said Hanson. “We were surprised to find out that many Southeast Asian hardcore PC gamers ignore mobile gaming all together, a major behavioral difference from the Chinese gaming population.”

Source: VentureBeat

McDonald’s Joins Xbox One Promotional Fray

Not to be outdone by Mountain Dew, Doritos and Chef Boyardee, McDonald’s has announced its own special promotion revolving around Microsoft’s Xbox One game console.

The fast food company has announced that it will give away 14,000 Xbox One consoles, with a copy of the racing game Forza Motorsport 5 included. To win, users need to pick up a medium fries, Quarter Pounder or Premium McWrap, and peel off the included stickers.

The win ratio for the contest is 1:1, so people will walk away with something from the contest, though not necessarily a game system. Other prizes include downloadable games for Xbox Live Arcade, as well as a month of Xbox Live Gold subscription and an Xbox Music Pass.

“With the excitement of the holidays around the corner, McDonald’s wanted to pair the bold, spicy flavors of the Southwest Chicken Premium McWrap and Bacon Habanero Ranch Quarter Pounder Burger with a chance to win this season’s hottest gift, the Xbox One. Through our partnership with Xbox, everyone wins something for Xbox,” said McDonald’s in a FAQ.

Source: McDonald’s

PlayStation 4 System, Atari 2600 Style

The PlayStation 4 is a sleek little system, a black unit with a futuristic, slanted design that makes it rather simple to activate and put in games. Still, we can’t help but wonder…what if it was modeled after an Atari 2600

After Oculus VR’s John Carmack posted a picture of an Atari 2600 sitting on top of a PlayStation 4, a designer by the name of “Phantom Fighter” took it upon himself to design a custom PlayStation 4 system via Photoshop with the classic wood grain design of the 80’s console, as well as a controller that features black design with red buttons, and circular pads similar in design to the original Atari 2600 controller.

Though the system modification isn’t real, it certainly leaves us wondering who could rebuild a model in real life. Don’t be surprised if someone makes a skin that would work wonders for the PlayStation 4.

Source: The Food Sucks

Fun Is Not A Metric

There’s a danger lurking the game industry — the rise of the metric-driven game that aims to maximize monetization without consideration for how fun the game may be. Those sorts of games may make some money in the short term (especially if done quickly, usually by copying an existing type of game) but they don’t have a lasting value. Worse, such games tend to devalue the whole idea of game playing on a platform, and can lead to an exodus of players. That may be part of the reason why social games dropped in popularity, though the rise of mobile games accounts for the majority of the switch. Mobile games, though, are certainly suffering from this issue, and games on other platforms could be too. How did we get to this point, and what can be done about it

The rapid expansion of the game industry into new platforms, new markets, new business models and new demographics over the past ten years has resulted in a Cambrian explosion of games. This growth sparked the creation of many new game companies, as both developers and investors have sought to take advantage of the massive growth. The rush to create and grow new companies has inadvertently resulted in too many games and companies where the focus is on metrics, rather than fun.

It’s a terrific advantage for game designers to get large amounts of reliable data about how people are playing their games. In the past, the only information designers received was anecdotal, through reviews or the occasional letter. Now mobile and social games get incredible amounts of data from every player, and PC and console games are beginning to do the same. Designers can see exactly where players have difficulty, or it’s too easy, and tweak the game accordingly. Company execs have also seen how the game can be tweaked to improve revenue, watching the effect of adjustments to the design and how it alters income.

The danger that’s manifested all too often is that the metrics end up driving the development of the game. There are game companies whose raison d’être seems to be maximizing revenue by tweaking the psychology of game players. Sure, companies usually are trying to maximize revenue, but when you’re making games it seems that creating a fun game should be right up there among the top priorities. Shouldn’t it If it’s not, shouldn’t you be in some other business

Eventually gamers get tired of being played instead of playing. While free-to-play games make it easy for new players to enter, the vast array of free-to-play games available make it easy for people to switch to something else. We’ve seen this with many mobile games that appear on the charts, blaze brightly for a while, then fade. Former EA CEO John Riccitiello pointed out that we have yet to see a successful sequel to a mobile game, or a mobile game franchise that has had anywhere near the longevity or revenue of the best console or computer game franchises.

Console games are beginning to find out just how much the console gaming audience will accept microtransactions, with games like Forza 5 where you can pay for new cars. Most console games now have regular doses of DLC arriving, and we may see that DLC available in smaller and smaller pieces. How well will this work in the long term, and is there a point at which there’s too much DLC for a game We don’t really know the answers yet. We need to be careful how we find out those answers, though.

There are some wildly successful games using the free-to-play model on the PC, like World of Tanks and League of Legends. Those games are very different, but what they have in common is a focus on making the game fun and continuing to improve the fun factor. Wargaming CEO Victor Kislyi is proud of the fact that half of the company’s employees deal directly with customers, working in support or community roles. Kislyi does look at metrics, but stays away from constantly tweaking deals in order to squeeze a little more money out of users each month. He feels the game will do better in the long run by focusing on making it better and more fun, which will keep users engaged for the long term.

Adding fun to a game is extraordinarily difficult. It’s not a dial you can easily adjust to add 23 percent more enjoyment. It’s not a metric you can read directly, though you can infer the amount of fun people are having to some extent by the depth of their engagement with the game and the number of hours put in. Finding out exactly what it is that players enjoy about a game really requires conversation, and engaging with gamers on community forums, message boards and social media. Getting that information back to game designers is critical, but there are no guarantees. Fun is elusive, and magical, and sometimes you just have to get lucky to find it.

Games are now more than ever a long-term proposition, at least if you want the effort put into the game to really produce a substantial profit. Big publishers increasingly want every game they produce to be something that attracts and retains a large audience for a long time, with plenty of opportunities to sell things to the gamers and spin off other products. That can only happen when a game is really fun. All the marketing and brand extensions and DLC in the world won’t get an audience to stick around in the kind of numbers big publishers need. The game has to be great fun, with prospects of more fun to come in the future, to create the kind of audience publishers crave.

That fun factor is key for smaller developers, too. Yes, it’s hard to find an audience these days, and getting harder. If your game is fun, and you are patient, you can find and grow your audience over time through recommendations. (The caveat here is that many small developers can’t afford to wait a year or two for a substantial audience to develop, so this must be taken into account in the planning phases.)

Game designers, developers and publishers can only build lasting, long-term value with a fun game, and that has to be the core value for a game company to be around for the long term. Investors in game startups should be looking for the fun in what developers are proposing, not for just for their engineering talent or advanced analytic chops. Do that, and the rising cost of user acquisition won’t bother you. Let’s all have more fun with gaming, and the rapid growth of the game industry will continue.

PlayStation 4 Hits 2.1 Million

The PlayStation 4 launched in Europe over the weekend, and it’s already an extraordinary success with players. A report from The Telegraph indicates that 250,000 units managed to sell in 48 hours’ time, which generates to about $1.4 billion in U.S. funds. That’s better than the 100,000 units that the PlayStation 3 sold years ago, and the 150,000 Xbox One units that sold during its launch last week.

The PlayStation 4 has now racked up an impressive 2.1 million units sold worldwide, according to Sony. “PS4′s North American debut on 15 November was PlayStation’s largest ever, with more than one million gamers picking up a PS4 in just 24 hours,” said SCE CEO Andrew House. “Now, with PS4′s global launch expanding to a total of 32 countries worldwide, including Europe and Latin America, I’m proud to announce that more than 2.1 million PS4s have been sold.”

“It’s an impressive and record-setting accomplishment for our company and for our industry and we couldn’t have done it without you,” continued House. “I want to personally thank PlayStation fans, both old and new, for your vote of confidence. The best part: the PS4 journey has just begun. In addition to an incredible line-up of PS4 games from the best developers in the world, we will continue to introduce valuable new features and services to PS4 in the months and years ahead.”

Source: GamesIndustry International

Microsoft Offering Two Xbox One Bundles

Just in time for the holidays – and the hot demand that comes with them – Microsoft has announced the availability of two limited edition Xbox One bundles, which can be purchased directly from its Microsoft stores.

The bundles go for $699.95 and $799.99, and come with different content.

The first bundle, the Xbox One Day One Bundle, comes with a 12-month Gold membership, Microsoft Complete for Xbox One (a coverage program that includes a limited warranty) and your choice of two Xbox One games for $699.95. That’s a $50 savings.

Those who want a little more out of their package can purchase the Xbox One Day One Ultimate Bundle, which also has Microsoft Complete for Xbox One, a 12-month Xbox Live Gold membership, your choice of three games, and an additional Xbox One wireless controller. This bundle will set users back $799.99, which is a nearly $70 savings over list prices.

Those interested in the bundles can visit here {link no longer active} to order, or find their nearest Microsoft store. But you’d best hurry, this deal is likely to sell out.

Source: Microsoft