EA focusing on 'hits,' releasing fewer games

EA plans to once again reduce the number of titles it releases over the coming year so it can focus on "hit" games.

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Electronic Arts yesterday filed its annual 'Form 10-K' financial mega-report with the US Securities and Exchange Commission. As well as the usual sums of income and expenditure, the 119-page report offers a handful of little fact nuggets giving a wider view of what's going on at EA, including its future plans.

As we reported earlier this month, EA ended its 2011 fiscal year on March 31 with a loss of $267 million. This was a big improvement over the 2010 fiscal year, however, when the company lost $677 million. With things somewhat on the mend, what's EA's next step?

The developer and publisher reveals it plans to yet again cut the number of titles it releases. During the 2012 fiscal year, EA expects to only release "approximately" 22 "primary" titles. This is down from 36 in the last fiscal year, which itself was down from 54 in FY2010.

"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," EA explained. "Publishing fewer titles means that we concentrate more of our development spending on each title, and driving 'hit' titles often requires large marketing budgets and media spend."

It's a double-edged sword, though, as EA notes that "The underperformance of a title may have a large adverse impact on our financial results. Also, hit products or services offered by our competitors may take a larger share of consumer spending."

EA also revealed which titles were the biggest across the world over the last fiscal year, saying North American revenue was "driven by" Madden NFL 11, Battlefield: Bad Company 2, and Medal of Honor. In Europe, however, FIFA Soccer 11, Medal of Honor and Need for Speed Hot Pursuit were in the driver's seat. Over in Asia, the top games were FIFA 11, Medal of Honor, and the free-to-play EA Sports FIFA Online 2.

Two last fun little fact nuggets for you--direct sales to GameStop accounted for 16% of EA's net revenue, while Walmart was 10%. That'll be why GameStop has so much bargaining power and gets so much special treatment.

From The Chatty

  • reply
    May 25, 2011 3:10 PM

    Alice O'Connor posted a new article, EA focusing on 'hits,' releasing fewer games.

    EA plans to once again reduce the number of titles it releases over the coming year so it can focus on "hit" games.

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      May 25, 2011 3:19 PM

      so theyre dropping all of their Wii titles?

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      May 25, 2011 3:19 PM

      Make less games. Milk the games you actually had success with. Fail later on and ponder why no one is buying the 10th sequel to "x".

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      May 25, 2011 3:22 PM

      Alice, you dropped the S.

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      May 25, 2011 3:23 PM

      'hits' is also an anagram for 'shit'. Just saying.

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      May 25, 2011 3:26 PM

      They're just pissed cause Darkspore sold way less than 100,000 copies.

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      May 25, 2011 3:28 PM

      Mass Effect 4: Attack of the Bro MMO

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      May 25, 2011 3:49 PM

      Oh marketing, you so crazy. I mean, literally CRAZY. Like, not sane. Like, doesn't learn from previous experiences and repeats the actions that previously failed, without understanding. Like, believes in market forces that don't exist.

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        May 25, 2011 3:54 PM

        I know right. Invisible hands. LOL

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        May 25, 2011 3:55 PM

        They're reacting about as quickly as they can. They started trusting gamers with awesome games like Mirror's Edge and Dead Space after the new management came in, then the 2009-2010 earnings were horrible and they haven't had time to switch back to things that actually made them money. It's tragic, but I blame everyone that didn't buy the brilliant and gorgeous games they've been putting out in response to gamer demand.

        (The recent entries in the CNC franchise are not included on the 'brilliant games' list.)

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          May 25, 2011 4:05 PM

          unfortunately true. It seemed like they were turning a corner but it didn't work for them. So who can blame them?

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          May 25, 2011 4:17 PM

          Apparently Dead Space did pretty well if it has some sequels. But of course instead of creating even more franchises, they're just going to milk the few that they have until people stop buying those. Game publishers are kind of dumb.

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            May 25, 2011 4:39 PM

            Dead Space 2 was more of a "in for a penny in for a pound" sort of deal. That game must have cost somewhere around 100m by the time they did all that advertising and bankrolled that shitty animated film. So when it took 3 months for it to reach 1.5 million copies sold, DS did not come out a big earner..

            EA has had a few fuckups like this. The aforementioned mirrors edge and mire significantly the new moh and ranted inferno. All big plays that didn't convert.

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              May 25, 2011 4:42 PM

              Medal of Honor was a big play that paid off though, they sold five million copies.

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                May 25, 2011 5:15 PM

                Less than that, and MoH needs to sell at least half of what a CoD game does to be what EA needs it to be. EA has no GTA or CoD type franchise at this point.

                So maybe if they do another two MOH's and each one builds on the brand then yeah.

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                  May 25, 2011 5:35 PM

                  So was EA lying when they said it sold over five million? Sure it is not near CoD levels yet, but that is more than a respectable number and enough to guarantee a sequel.

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                    May 25, 2011 6:01 PM

                    It's kind of disappointing that MoH sold that well. It looks so generic. I remember people being pretty "meh" about it too.

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                      May 25, 2011 6:46 PM

                      It was fun and had some pretty creative / original / awesome levels that really branched out from just trying to clone the modern CoD style. Sadly, it also had a few levels that cloned the worst parts of the modern CoD style. For the most part though, it was fun and I don't regret picking it up and playing through it.

                      Most of the complaints about the single player were:
                      a) it was too short (it was short)
                      b) It was too linear (what the fuck are you expecting? But yea, there's one or two levels in particular that are quite literally like walking down a fucking hallway)

                      At least (in the PS3 version) they included Medal of Honor: Frontline remastered to run in HD and, I presume, at 60fps. I don't know. I didn't try it. Frontline was a fucking awful game and it needed a hell of a lot more than a facelift to make it fun.

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                      May 26, 2011 4:26 AM

                      I thought MoH single-player was a lot better than BLOPS.

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                  May 25, 2011 6:13 PM

                  "EA has no GTA or CoD type franchise at this point"

                  um isn't the Battlefield franchise published by EA? Everybody knows that THAT franchise sure isn't going to generate sales...

                  nice try at looking like you know what you're talking about though

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                    May 25, 2011 6:28 PM

                    Well, foreskin, Battlefield is a successful franchise, but probably because EA doesn't spend so aggressively on it, and it certainly has never reached close to the sales of Call of Duty or GTA.

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                      May 25, 2011 7:07 PM

                      Yup. You need to pay more attention, RumpleForeSkin. Battlefield is big but not CoD big. Still, it's the closest EA has to a sure thing other than Madden and apparently FIFA. I would be really worried about MoH2 sales. I don't think it will sell more than MoH1. I think it will do significantly less business.

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                    May 26, 2011 5:31 AM

                    BF is big for people who know wtf, unfortunately there are more people who don't know wtf :(

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                  May 25, 2011 6:33 PM

                  EA has Madden and Fifa which worldwide between all the consoles pull in about 12 million in sales. It's not as much as COD, but they still sell quite well.

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                    May 25, 2011 6:37 PM

                    The problem with these is they're licensed products. EA used to make piles but then the licensees figured out there was money in video games and renegotiated the profit sharing lolololol.

                    So now EA is desparate to develop something that it has all to itself.

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                      May 25, 2011 7:20 PM

                      I wonder how high the Lucas tax is for TOR.

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              May 26, 2011 5:26 AM

              Yeah, and their marketing campaign massively dropped the fucking ball on DS2 as well.

              YOUR MOTHER WILL HATE THIS GAME.

              Oh boy, evidently we're all 10 again.

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          May 25, 2011 4:20 PM

          Was mirror's edge really that great though?

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            May 25, 2011 4:22 PM

            Not unless it had a good ROI. Sadly, quality, originality, and profitability are not correlated.

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              May 25, 2011 4:26 PM

              No I mean I played the demo and I thought it was okay I guess but it didn't seem great to me and it didn't seem to get people around me who play games and spend a lot of money on games talking. I think some of my friends even bought it and I didn't hear a peep from them about it being great and something I should by or any anecdotes about it or anything.

              It may have been an original IP but I don't know that it was a good enough game to warrant a sequel?

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                May 25, 2011 4:30 PM

                I found it mainly frustrating and it had terrible flow. Run to edge, look for path, back up, attempt path, fall and die, repeat. I'm pretty sure your experience is the average experience. I know a lot of people gush over it, and yeah it was new and neat, but obviously it didn't do well for EA.

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                May 25, 2011 4:41 PM

                It wasn't amazing, but it wasn't terrible.

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                May 25, 2011 5:21 PM

                I loved it. Could have used fewer guns

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            May 25, 2011 6:42 PM

            It was awesome if you made it a point to not use guns.

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              May 26, 2011 4:21 AM

              ^^This is the correct answer.

              It was basically as fun as you wanted it to make it be.

              The gunplay wasn't good enough to be left in, yet they did, but it also made the game ludicrously easy, and when you got to bits where guns weren't available it could get really tricky (see: fighting the police ninjas) as you had gotten so used to having firepower available to you.

        • Ebu
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          May 25, 2011 4:24 PM

          Mirror's Edge was a good game. Not a great game, but a good game. But it was also a bit of a niche game that was never destined to be a Bestseller.

          Dead Space was a borderline great game that should have done well, but the current market climate seems to favor faster-paced games, high action

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            May 25, 2011 7:21 PM

            Used game market took a big bite out of DS1.

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        May 25, 2011 4:59 PM

        Well. That came out harsher than even I expected*. I don't think marketing is crazy (I just don't get it because I'm ignorant) - and I'm just hating that there's no more 'middle class' of games, or that no one believes those games can be profitable anymore. Seems like everything is either 'omg blockbuster!' or 'cool indie weirdness' these days. If it falls between, it fails in the public consciousness. Games as 'srs bzns' will always scare and confuse me, I guess.


        *I blame the fact that lately I constantly listen to stand up comedians and have started to unconsciously (and badly) ape the 'attitude' and I have to cram useless hyperbole into every statement, all the time (and not well).

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      May 25, 2011 4:14 PM

      What a game there last bunch of poorly made rushed bland games failed to sell well wounder why.

      I guess we now get to see the raw power of ctrl c and ctrl v can do as they change the levels around and push out the same game again that sold a few units.

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      May 25, 2011 4:23 PM

      Same strategy Activision's been using for many years, focusing on their "big proposition" games. Most pubs aren't really interested in games that sell less than 4-5m units these days and they need the 10m+ sellers to really float the company year after year.

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      May 25, 2011 4:24 PM

      I'm so out of touch with mainstream gaming market. None of the games they mention, that brought them most income, none of them matter to me. Like - at all. I have absolutely no interest in any of them. Somebody would have to pay ME to play them.

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        May 25, 2011 4:29 PM

        I pretty much only play Indie games these days.. don't know why, but even though the production values are not there I have way more fun.

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          May 25, 2011 4:42 PM

          Same. Indie games seem like the only ones trying anything different. Every big console game feels like it's a copy of a previous game with some minor tweaks.

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            May 25, 2011 4:50 PM

            The problem is major publishers have to go that route if they want to stay in business. Being innovative also means putting your neck on the line to lose big with how expensive games are these days. The obvious solution to this is to make cheaper games by not going balls out with graphics, but then people bitch the game is ugly. There really is not an easy win solution.

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              May 25, 2011 5:23 PM

              They could do multiple tiers like movie studios though and they really don't. EA will release a couple of downloadable and phone games, but not as much as they should.

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          May 25, 2011 7:25 PM

          I delved into some bigfishgames.com 2D puzzle/adventure games last year and this is coming from a CounterStrike player! They were fun.

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        May 25, 2011 4:48 PM

        Only EA game I care about is BF3. And they had better make all the DLC available on PC, unlike BC2, Burnout Paradise, NSF Hot Pursuit, Shift 2, Dead Space 2, etc...

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          May 25, 2011 7:29 PM

          BF3 and Mass Effect 3 for me.

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            May 26, 2011 5:47 AM

            They do not mention Mass Effect though.
            I was huge fan of Mirror's Edge... So bummed there will be no sequel...

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              May 27, 2011 6:22 AM

              +1 for mirrors edge, what a great game (as long as you dont use the guns, drop them instantly)

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      May 25, 2011 5:32 PM

      Sounds like they are doubling down. EA will also probably increase Project 10 Dollar to Project 20 Dollar. I am surprised to hear that Medal of Honor drove more revenue than Mass Effect over the last fiscal year; guess that would be the overseas MoH sales. Long term looks somewhat scary for EA because Madden, FIFA, and Battlefield are the only steady franchises I see.

      Thanks for the note about GameStop's share of the pie. Important detail.

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        May 26, 2011 7:34 AM

        No, as any investor who watched the last meeting while DLC is an important piece of strategy it will not be a perceived "mandatory" one as Online Pass type stuff. That project was successful but the long-term strategy is to understand customers better and to allow them to continue to purchase new content for their games and establish better relationships that can get them playing other EA games as well (cross-game promotions, etc).

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      May 25, 2011 5:47 PM

      http://idleballad.com/

      This seems like an appropriate place for the ballad of John Riccitello

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        May 26, 2011 1:21 AM

        I was thinking the same thing, and i am quite disappoint that Alice did not link it in the article.

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      May 25, 2011 7:13 PM

      Shocking strategy. Buy competition. Destroy assets. Rinse repeat. Wonderful for the industry.

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        May 25, 2011 7:16 PM

        It's the competition's fault for dressing slutty and selling themselves.

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      May 25, 2011 7:21 PM

      Soon EA will be like the movie industry. Run out of novel ideas and start rebooting everything.
      Up Next: Wing Commander : Next Gen.

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        May 25, 2011 7:27 PM

        I actually like that idea.

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        May 25, 2011 7:39 PM

        Well Chris Roberts is in the movie industry now so at least that sort of makes sense. Just bring him back and get Mark Hamill to do voice acting and I'm totally for that idea.

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        May 25, 2011 7:49 PM

        Good. They can start with a next gen Ultima for fuck's sake.

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          May 25, 2011 7:58 PM

          I can't see any way that a big budget reboot of Ultima would retain anything that made the original series unique.

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            May 25, 2011 8:09 PM

            Agreed, although I do see the Elderscrolls incorporating the same level of detail as Ultima 7 had. People going about their chores. Being able to interfere with production lines in towns, etc etc.

            I would be cautiously optimistic if Bethesda got the IP and did an Ultima reboot.

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              May 26, 2011 2:03 AM

              they claimed they would do that with oblivion, but if they have I must have a played the wrong game. It has almost nothing of what made ultima 7 a great game except that it is a semi big world you can run around in, with swords.

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            May 25, 2011 8:09 PM

            Same could be said for Fallout, and others like GTA. It's all in the team and execution. Throw a talented team at Ultima and it could be done. Why let Oblivion, Fable, Witcher and others take the RPG crown from you?

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              May 25, 2011 8:12 PM

              That said...I've little doubt that in EA's current culture a talented team would try to do the right thing but could not due to internal EA political maneuvering or rush to market.

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          May 26, 2011 1:30 AM

          How about another Terminal Velocity game George !!

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          May 26, 2011 2:02 AM

          holy shit, I never would've seen you as a fan for Ultima. They has an Ultima X (a single player game) in the works at some point, I wonder if they revisit that project.

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        May 26, 2011 1:52 AM

        That is much more interesting when videogames do that. Human Revolution is essentially a reboot with similar gameplay to the first Deus Ex and it looks amazing.

        I want that new MechWarrior game badly :(

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        May 27, 2011 6:14 PM

        They are already worst then the Friday the 13th movie franchise in those regards with all those sports titles they rehash every year.

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      May 26, 2011 2:35 AM

      ^^You guys should all open your own game publisher and show em how its done!

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        May 26, 2011 4:22 AM

        yeah, it's just that simple

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        May 26, 2011 4:37 AM

        yeah same with hollywood. People should be grateful to see superhero movie part 13 rebooted the sequel instead of demanding "creativity" or "quality".

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        May 26, 2011 11:20 AM

        It's not like there's a long history of publishers running a small number of titles into the ground and ultimately going under.

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      May 27, 2011 6:09 PM

      EA will never "get it".

      Stop releasing the same sports games every year with no changes other than a roster and new menues to make it appear new.

      Stop buying development studios and then close them and lay off all the talented employees that made their games what they were. Eg. Westwood studios.

      Stop treating your employees like low wage slaves and then give the executives outrageous salaries and bonuses for making these poor decisions in the first place.

      And so on... there are so many...