Experienced Points

Experienced Points
Where EA Went Wrong

Shamus Young | 19 Mar 2013 09:00
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This is a massive waste. There's a limit to how much more work you can do with more bodies. Instead of an incredible game made by 40 people in three years we get a lacklustre game made by 100 people in eighteen months. The game is lower quality, it cost more to make, and the overall brand name is damaged. Sure, you got the game sooner. But since you paid more to make it, the thing also needs to sell more. Everyone loses.

3. Over-reliance on "Blockbusters"

From the EA 2012 Investor Annual Report:

"In our industry, though many new products and services are regularly introduced, only a relatively small number of "hit" titles accounts for a significant portion of total revenue for the industry."

This is also true in movies and in music. However, this doesn't mean you should spend all of your time making "hit" games. While a "significant" (note that it doesn't say "majority") portion of your income comes from hit games, all the rest of your income comes from non-hit games. Imagine if movie studios only produced Michael Bay blockbusters, because those sold more than others. Overall, you wouldn't sell more tickets, you'd just split the same number of ticket sales over a large group of incredibly expensive movies, while missing out on the money you could have made from romantic comedies, thrillers, dramas, and other reliable, low-yield genres. Imagine if an automaker quit making trucks, vans, hybrids, minivans, compacts, SUV's, and luxury cars because mid-size cars sold best. Sales would go down, not up.

EA's pursuit of hits shows a complete lack of understanding of why people play games or what makes games a hit. Call of Duty is a hit? Then let's make all games more like Call of Duty! You can see this at work in the Mass Effect and Dead Space sequels as EA pushed for a more gritty action-shooter aesthetic and added multiplayer. Maybe you liked those features and maybe you didn't, but did those features serve the intended audience? Did they result in enough sales to justify the time and expense it took to add them? Would young dudes flock to see Eat, Pray, Love just because the director jammed a car chase in there someplace? Different markets have different needs.

This one-dimensional view of the industry is incredibly dangerous, because it leads to over-investment in a single market. If all you make is Sport Utility Vehicles, then when the market changes and hybrids become the Next Big Thing you won't be in a position to take advantage. You spend all of your time chasing trends instead of setting them.

Yes, Call of Duty is a huge seller. You know what else was huge? Minecraft. And in terms of profit margin, Minecraft might be the most profitable game in history. (It outsold Starcraft II by 3 million copies, while having a development budget of basically nothing.) I'm not saying EA should start funding Minecraft clones. (In fact, that would be no better or smarter than trying to make all games into Call of Duty.) I'm saying they should keep a wide portfolio of safe, reliable, low-cost titles so that if (or when) the modern shooter market changes or collapses they won't see their only source of revenue vanish. And in backing these other games, there's always the chance that one of them might become the Next Big Thing.

EA is chasing trends and stacking all their chips in the same pile, hoping to hit the jackpot. That's not investing. That's gambling. Worse, it's reactionary fad-driven gambling. This is not how you should run a multi-billion dollar company.

4. The Shortcomings of Origin

While I've said before that physical media isn't going anywhere, it's clear that digital downloads are going to dominate the market. Sadly for EA, Valve's Steam service eclipses all other platforms in the same way that Microsoft did for desktop operating systems in the 90's. EA should be fighting to grab as much of this new frontier as they can get. EA should be terrified of a future where they have to go crawling to Valve to get their game on a platform where someone will actually buy it.

Yet EA doesn't seem to be doing anything to make their own Origin platform competitive. It would take me an entire column to enumerate all of Origin's shortcomings. Luckily, I have already written such a column.

In the year since that column went up, very little has changed. Alas.

Wrapping Up

So what's the problem? I said at the top of the article that the EA leadership isn't stupid or evil. (Well, their work environment is still reportedly abysmal and that's arguably worth some Dark Side points on the BioWare morality-meter, but that behavior isn't related to why the company is making such poor choices.) But if EA isn't run by morons, and if they aren't mustache-twirling villains, then what is wrong with this company? How can so much potential go to so much waste, and how did we end up with EA being the most hated company?

I'll cover that next week.

Shamus Young is a programmer, a novelist, and he thinks that Activision and Ubisoft are probably nearly as bad, but not as interesting to discuss.

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