IG: Let’s move on to the whole online pass thing. Obviously that’s been making pretty big headlines for the past couple of weeks since word got out that you guys had started this at EA Sports along with the project ten-dollar stuff that is sort of across all the games essentially. I guess one thing I’m curious about is that I’ve seen people at EA say this is really not designed or not intended to combat used games sales, and that it’s more about giving more value to the online players. But to me frankly, that does sound maybe a little bit disingenuous. It seems like you can’t help but not damage used sales with a program like this. What is your response to that?
JR: Well look, I would say… I would first send you back to our press release. Dan DeMatteo was in our release, enthusiastically supporting it, quoted as enthusiastically supporting it, and we had nothing to do with his recent move up to executive chairman. But the point is this: it’s a well orchestrated plan with us and our retail partners because we think it makes sense. Look, I think what can happen in the game industry is there’s some small number of people that carry a cynicism about publishers in general, and they’re always going to. God love their hearts, they’re dedicated to our industry and they want to see us do all the best things for them. But our business is moving. Ten years ago, five years ago, we’d gold master a game, the dev team would move on to something else and no one was there. Today, what happens with a game is a team is there where you [use data] to improve it, provide great post-release content, new services like we did with FIFA and Madden recently with Ultimate Team. I mean the project is only half done when we ship it. It keeps going. We’re selling services.
And we’re going to continue to experiment with smart models to support the heavy, heavy use that people are giving our games, not for two weeks like they used to be, but for a year or more post-release. And you know, the fact we’re providing a service you can expect ongoing evolution of the business model in ways that best support that service.
You know, if you think about it, you grew up watching television from ABC, CBS, and NBC, and got an hour of sports on a Saturday. The world is very different, and most of us pay for the television in a different way. We watch fewer ads, we enjoy better content, but the world’s moved. I’ve been through my cassettes and 8-tracks, but I thought I was going to be buying CDs forever. I haven’t bought a CD for a long time from a Tower Records, mostly because I can’t find a Tower Records. But, you know, today I primarily buy my music online and it’s just different. I buy it by the song, sometimes by the album.
I can’t even tell you… I watch everything Showtime puts out, and I don’t even have their system. I get it on DVDs and/or through the Apple store.
And so the fact that each of these evolutions takes place and involves different business models for different service levels and different support levels is not a surprise. And I understand why it makes noise with some people but it seems to me like, um… let’s see, my daughters, you know, I’ve got an eighth grader and a sophomore in high school, soon to be a freshman and junior, and it seems I have a focus group in my house three nights a week, you know, doing nothing but talking about games and what they’re playing and what do they like and what they don’t like. And only the people that read game blogs have ever asked me about that. I think it’s sort of centered on a universe of people that are the most dedicated fans, and to answer your question it's incumbent on us to prove the value, and that’s what we're going to do this year in spades. We’re going to prove that what we say is not disingenuous. I get that you can believe that it is. I mean look, we’re in a political hot season in California. You turn on the news, tell me who’s not lying to you. I get the point. (Laughter). Um, so… sorry but I (laughter) probably have my communications people cringing.
PR Person: Politics aside...
JR: But it always feels like what we're choosing to believe what we hear from authority is a shading of the truth. The fact is here it’s not. We did this because we’re evolving a service. We provide at least a third of all the benefits associated with a game after we ship it – and that’s not a mathematical equation behind that, I’m just scanning my team to see what they do. And it’s going to be 50-50 in no time, and in that world we’re ultimately going to figure out the best way and the best way to price those services. And it’s going to be responsive to what the consumer wants. We are going to continue to experiment, and what works will work, but we’re going to make sure the services are darn good and they really work for the consumer.
IG: I’m not sure how much more you have to add to this, but just to play devil’s advocate here for a second... In the eyes of an average gamer who maybe doesn’t buy a ton of games each year, and he’s trying to save money and maybe that’s why he buys used games, maybe to save five or ten dollars, and he’s already paid fifty dollars for access to Xbox Live. Then he realizes, “oh wait, I have to pay another ten dollars to even play this game online now that I’ve just bought used.” What does EA say to that type of gamer?
JR: Well, we thank you for your business. You didn’t used to be a customer of ours, and now you are. We’re going to prove to you that that ten dollars is exceptionally well spent.
IG: Before you had mentioned Medal Of Honor, and of course with the signing of Respawn and the guys you have at Crytek, you’ve become more and more of a powerhouse in the shooter genre. I’m just curious, how disappointing was it to see Activision sign Bungie to a ten-year deal?
JR: I was happy for them.
IG: Ok. Happy for Activision or Bungie or both?
JR: [pause] Look, I know more about that deal than I want to let on here, but I think the Bungie guys are good guys; they certainly create content that I like. I would say… I really don’t want to go any further than that. There’s a lot ways to criticize another deal. I wish the Bungie guys the greatest success and if they build a product I want to buy I’m going to be right there to buy it. You know, I think with EA we don’t have deals that work like that because we don’t think they’re good business for us. But we have great relationships with great creators and we’re really proud of those relationships.
IG: Right. Are you actively looking to sign other developers? The Insomniac deal, which obviously was a fantastic deal to get….
JR: I’ve been a fan of Ted [Price]for a very, very long time.
IG: Yeah, so are you guys looking at other independent developers out there to sign to deals? Like maybe Quantic Dream? Heavy Rain made a pretty big splash. Or maybe the guys at Sucker Punch, who are working on Infamous 2 now? Is there an active outreach to some of these guys to sign to exclusive EA deals?
JR: First off, I want to compliment you on the word choice of “Heavy Rain making a big splash.” (Laughter) We set up EA Partners initially in 1997 and we christened it in 2002 and 2003 because I and others at EA had a strong belief that while most of the best creative would want to work at EA, some small portion of the world’s great creative would want to set up shop and run themselves independently, and we can provide a great partnership for them. It’s not a new outreach; it’s an ongoing outreach. It’s why we’re partners with Valve and Epic and Insomniac and Crytek and others. We basically set up partnerships with, frankly, people we’re fans with. We originally, for example, met the team at Harmonix mostly out of fanship for Guitar Hero, not so much out of even knowing they were going to produce a product called Rock Band. That relationship with [Harmonix boss] Alex [Rigopulos] ultimately built itself into a business partnership that’s been good for us. We’re out there; we’re in the business of being close to the best creative people out there. Most of them I think already work here, but those that don’t that have got their own shingle we’re happy to work with them when the business terms make sense.
IG: Do you have any kind of reaction to the Activision independent developer competition that was announced this week? I actually interviewed one of their key executives about it and sort of asked them if this was a way to repair their image following the Infinity Ward situation. In fact, I raised the point because they were sort of talking about how they’ve always fostered a great development culture ever since Raven Software joined them back in the mid '90s. It sort of brought to mind the whole city-state structure that you’ve talked about at EA for a long time and how EA fosters development culture. I’m just curious, looking across at your rival at Activision what's your reaction to what their thinking is?
JR: I think you answered it perfectly. (Laughter). I mean come on; you laid it out as well I could. That whole windup is the answer to the question... Seriously, I think Activision runs a good business. I think Blizzard runs a great studio. To be honest with you, I think quotes like, “we’re trying to take the fun out of gaming” and the rest of it, you know, suing developers and all that kind of stuff... In the end, I think that Activision…
I really wouldn’t want to go after this in a big way in this interview; that’s not what I’d like this to be about. I know what we’re about. And I think you’ve been a close enough student of this business to watch what’s happened over the last three years. You know we’ve gone from six to teens to twenty titles rated eighty or above. We’ve released the highest rated product in the industry so far this year, we’ve introduced the #1 new IP in the industry so far this year. We introduced the highest rated third party game on the Wii in the last fiscal year. We’re really trying to do this because we believe soundly it’s the right thing to do. It’s not PR strategy, it’s fundamental to who we are. I believe ultimately, it will make us among the most profitable companies in the game industry. But we were coming from some challenged times and I think we’ve largely repaired all of that. It’s a consequence of building higher quality games and really trusting our teams. I think you could talk to dozens and dozens of teams here and hear that reflected back. I think you’d be hard pressed to find a disclosure of anything else, you know, some sort of a public legal document that describes a very different reality than they one you’re trying to put out into your corporate communications people.
IG: I’d like to ask briefly about Star Wars: The Old Republic. It's been quoted a couple of times in the press that this is EA’s biggest game or largest spend ever. My question to you is: (a) can you put a ballpark figure on that? and (b) are you nervous about putting that much money into a product? Even though BioWare is highly, highly talented and they’re very well respected in the RPG genre, they’ve never really created an MMO before. Are you nervous about that, and is there an actual number that you can put out there?
JR: I’m not going to get too much into that, I’m not going to give you any numbers. I’m nervous for every title we release because we put our blood, sweat, and tears, and booty into these things, and we want them all to work. I don’t think that it’s news that Neil Armstrong has had a longer flight than any United captain. MMOs are a different kettle of fish than a particular packaged goods game... MMOs are expensive. The most expensive game that Blizzard ever built I’m sure is WoW. And by the way, it’s also their first MMO. I don’t know if there’s anything of great moment in this. My guess is before you read a quote from our CFO at an investor conference where he was asked a question and answered that, if you’d have taken eight seconds to think about it, what’s the most expensive game EA’s building or has ever built, you’d have quickly gotten to our BioWare MMO. I find it interesting that it's news now when it sort of I think is pretty obvious.
IG: Thanks for your time today.
1 Comments
November 1, 2010
james i hope they dont treat you the way they messed me over and a lot of other people good luck