Experienced Points

Experienced Points
Electronic Arts: Greed Is Not the Problem

Shamus Young | 18 Feb 2014 15:00
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I don't have a problem with companies making money. I don't think "greed" is a bad thing. I don't have a problem with people getting rich. What I do have a problem with is wasted potential and disgraceful incompetence. What's important is not how much you're making, but how well you're using the resources at your disposal.

Ten years ago Valve Software was a medium-sized development house. They had one successful game (Half-Life) and a collection of expansions for it. They didn't have massive cash reserves by today's standards and they didn't have any direct influence over the market. They were, in dollar terms, probably less successful than Mojang is today. But Valve anticipated a coming shift in the market (the move to digital distribution) and they figured out how to meet that need.

A decade later, they are now a multi-billion dollar behemoth. They own Half-Life, Team Fortress, DOTA 2, Portal, and Left 4 Dead. Every one of those franchises is critically acclaimed, commercially successful, and instantly recognizable, even to the point of spawning memes outside the gaming community. Valve controls an enormous majority of PC digital sales, holding a market share that looks like Microsoft Windows in the late 90's. They're branching out into selling software and they're launching their own console. Their sales are so successful that people joke about how Steam sales make them poor by getting them to buy games they never knew they wanted and spend more than they ever intended.

Valve has done a lot of things to make a lot of money. You could even accuse them of being "greedy". I mean, why launch Steam when they already had a successful and profitable game? Why sell indie games when they were already doing well selling AAA titles? Why launch a console when Steam is doing so well? Valve is purportedly sitting on a mountain of cash, and their customers love them. Nobody complains about how Valve is "greedy" for having sales, for selling indie games, or for making a console. Instead, people are lining up to give them cash.

Greed is not the problem.

What has EA accomplished in that same timeframe? They were already a massive company ten years ago. They already had a mountain of cash. They already had a vast storehouse of popular IP. They already had tremendous control over the market. And in the last decade they've squandered most of it.

Using IP

Intellectual Property is the most valuable asset a videogame company can have. Talent can come and go. Machines and software are regularly replaced. But creating and maintaining titles and brands is how you make your money.

In the last ten years Valve has backed the creation and growth of iconic, commercially successful IP. Half-Life, Team Fortress, DOTA 2, Portal, and Left 4 Dead.

Instead of creating new, successful IP, EA is notorious for taking things which are already successful and demolishing them in a spectacular conflagration of offensive marketing, terrible gameplay, and joy-killing technology failures. Even with their vast wealth, they can't seem to make a good game even when using an already successful franchise.

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