The New EA?

Electronic Arts, like many other game publishers over the last year, has been seeing falling profits. Last month it announced a 31% drop in quarterly profits year over year. Business Week has a report up that the corporate behemoth needs a new game plan. For EA, a company known for its yearly franchises and mass market appeal, that means more innovative games.

But now EA is stumbling, and a big part of its time-tested strategy is about to change. The company hopes that its next mega-franchise will revolve not around a football star, a boy wizard, or a dashing British spy, but...a microbe. The game is called Spore. ... EA's ambitious goal is to create more such innovative, internally developed games while lessening the company's dependence on professional sports and Hollywood movie franchises.

It's unlikely--one might say nearly impossible--to imagine EA lessening its dependence on Madden and other yearly cash cows all too much. After all, many of its titles still regularly dominate monthly sales charts, even those which have seen new iterations yearly for an entire console generation. Still, the company may be realizing that a dependance on such a specific business model may not have the diversity needed to fully appeal to the continually growing gaming market. There's also the simply reality that titles like Madden, Harry Potter, and Lord of the Rings, are no longer new to many gamers who have only been enjoying the hobby for a few years, perhaps since the start of the PS2 generation. Anecdotally, I can easily point to gamers I know who game far less than they used to, simply because the things they once found impressive are no longer new or exciting, even with upgraded next-gen graphics. EA will face a few challenges along the way, if the company is indeed plunging into more innovative, riskier development. For years, partially because of its size and partially as a reason for its size, it has been very risk-averse. The model to which shareholders and executives are accustomed is efficient and more straightforward than creating an entirely new design for each game. Currently, the company operates on a stated "innovation per franchise" system, but placing innovation within the frame of an established franchise and design is only going to go so far in bringing truly new experiences to the player. In all likelihood, EA will approach the problem the same way it usually does when entering markets or market segments which it may not be able to tackle internally: buying other studios which have the built-in experience and structure needed to take on those markets. It's already got Maxis and Will Wright, of course, and Wright would be a rather enormous feather in any publisher's cap. It recently announced its plan to fully acquire DICE, and Business Week notes that the company is assembling a studio at its Montreal location to focus on creating original titles. All in all, it's encouraging to see the industry's largest publisher--and, it must be noted, even with dropping profits EA is really in no position to lose its extremely wide lead over its closest competitor any time soon--try to diversify its development portfolio. If the company actually puts a concerted effort towards funding more innovative and creative projects, and giving designers and their teams the leverage and freedom to actually bring such projects to fruition, it could have a positive effect on the industry, as such practices would almost surely spread to other major publishers. Take a look at the film industry; major distributors make big bucks on blockbuster titles with big name stars, but they also fund smaller projects with lower budgets and more specific audiences. This is an important factor in meeting the expectations of an audience as broad as the moviegoing public, and gaming is becoming a widespread enough hobby that it is clearly approaching that point as well. Offbeat games like Katamari Damacy (PS2) would be unlikely to succeed financially were that not the case. Furthermore, a company with the marketing muscle that EA has could do well to ensure that the gaming public is made aware of such titles. A lack of that kind of presence has been the downfall of games that may otherwise have found a very willing audience. This new direction, or at least additional direction, may seem unlikely from a juggernaut like EA. However, if the company gives it a fair chance and plays it smart, it could be good for gamers, developers, and publishers alike.