Video game sales in 2009 failed to reach the record-high levels of 2008, and the disappointing back half of the year seemed to carry over into January. It's clear that the industry is in the midst of a transition as well, as more and more publishers look to leverage the digital space with downloadable content, social gaming and iPhone gaming. Electronic Arts has made the transition to digital a primary focus for the company, but it's been tough on EA and the industry overall, as layoffs and studio closures were all too frequent in 2009. John Schappert, who returned to EA last year to serve as COO, gave a talk at D.I.C.E. this week in Las Vegas to provide some tips about navigating the challenging game industry.
Schappert began by making a subtle dig at Bobby Kotick's speech from the previous day. “I’m not going to talk about my great deals. How smart I am. How much money I make," he commented. "How great my company is. How dumb others are.” He noted that the transition now is more complex than in the past because of the number of platforms out there, but he believes with the right approach, the bumpy waters can be navigated. Here are his five tips.
Tip 1: Schappert said there must be a strong focus on game quality, which is why EA has been cutting back on its portfolio to put more resources into its properties that it really believes in. “It’s hard to regain the trust of consumers,” he said, referring to FIFA 10, which bounced back nicely after losing its edge to Konami's Winning 11 series. “It took a long time to regain ground.”
Tip 2: Schappert is also a big believer in the impact of marketing, and clearly EA as a whole has done a lot on the marketing front, most notably advertising during the Super Bowl recently. As a result, Dante's Inferno was exposed to 115 million viewers two days before the launch of the game. He said that companies need to get more from their marketing. A bad game is a bad game no matter what (see Tip 1), but good marketing can definitely help a good or great game get to the next level.
Tip 3: The next item he stressed is that you have to invest in the industry's future, which is online. Areas such as subscriptions, premium downloadable content, free-to-play games, micro-transactions, and in-game ads are all worth pursuing. These are potential growth sectors for the industry. DLC is perhaps the most important of these in the world of connected consoles. Having solid DLC also allows publishers to give a title "legs" and prevent the disc from getting sold back to GameStop so quickly. “The days of shipping a game and being done with it are over,” Schappert said. “People are buying fewer games but they want to play those games for a longer time.”
Additionally, although EA spent hundreds of millions to acquire PlayFish, Schappert did warn that consolidation looms ahead, so companies need to be careful about the social games space. “We are a big supporter and believer and I couldn’t be happier to have our Playfish acquisition,” he said. “I do want to express caution. This industry is destined for consolidation. When you see crazy valuations, you could easily think we are in a bubble.”
Tip 4: Companies can't abandon their consumer base. Despite the transition to digital, Schappert stressed that retail games aren't going anywhere just yet. He believes the physical product will remain important to consumers for quite some time, so publishers shouldn't get overly excited about investments in new areas, but they still need to prepare for the future (see Tip 3).
Tip 5: Don't let cynical people get you down. Although there have been plenty of negative or discouraging headlines in the press, the video game industry is still in fantastic shape. Video game professionals shouldn't get depressed over recent happenings or walk away from this vibrant industry. Game designers need to simply focus on what they do best - innovate and stick to their creative visions. If they do that, then the industry will be just fine.
[Thanks to VentureBeat]
