Speaking in a keynote address at the GameSupply conference this week, EA Sports boss PeterMoore noted that the traditional games business is currently in danger and needs to adapt to emerging platforms. He showed a picture of an offshore burning oil rig and noted, "We’re on a burning oil platform.” He says that it's certain death to stay on board, or probable death by jumping into the water. The games industry is only changing as its forced to change, he remarked.
The message, essentially, is change or die. Too many companies are simply being reactive to the growing social, mobile and digital wave, rather than becoming pro-active and getting out in front of that wave.
Moore continued by talking about the danger the industry faces with fragmentation. People don't focus on a single thing anymore; the behavior of consumers has changed as more time is spent on other things including Internet, social media, etc. Publishers need to leverage the social aspects, and then hopefully some of these social players can be converted into console players.
Moore noted that the key is to manage the “migration train” and get users to move up to console titles which have a higher ARPU. Part of this involves the huge growth on the digital side with DLC content, post-release. Moore noted that the disc is still important because a lot of digital is coming off the disc itself. This is the platform from which PDLC (premium downloadable content) is growing and adding to incremental ARPU. Moore said that the industry is moving from transaction to service – by driving this ARPU model, the disc remains relevant and fresh.
Digital has grown from from $1.1 billion to $6.8 billion in the last 5 years. Publishers can no longer launch and leave, ship and forget. Now it's crucial to layer on top experiences that bring in more revenue into the industry. And while social and casual titles are now big, Moore said that it's still very important to innovate for the core, who remain the "pillars of the business."
Looking specifically at EA Sports, Moore said he wants the group to be viewed as the world's leading sports brand. The strategy involves making sure all experiences are connected on all platforms, so that there's an EA Sports presence, and it's persistent from platform to platform. If more players look at EA Sports as a service, it'll be harder for them to walk away from their achievements and gamer status, and EA Sports will be able to improve abandonment rates from year to year. Essentially, every franchise needs to connect to every platform and every online experience.
