FEATURE: How EA Sports will face the threat from apps
Wednesday, 27th July 2011 at 12:00 pm
[Sponsored feature] Shifting consumer habits can be an opportunity and a threat, Intel says
Some might say it was brave of Andrew Wilson to open last week's Evolve Conference by revealing EA Sports' strategy.
He's the senior vice president of EA Sports, and he was facing an audience that included many app developers, who some might say pose the biggest threat to EA Sports' business model.
Certainly, digital sales (including apps, ad-supported games and downloadable content for boxed products) have had a huge impact on the industry.
In 2008, digital sales made up 31% of the industry. In 2010, that had risen to 45%, so digital was not only growing, but also taking a larger slice of the industry, Wilson said.
"The good news," said Wilson, "is that every time our industry has gone through a transition, the industry has grown. Every console transition has brought in new gamers."
The diversity of devices used for playing games today is also bringing in new gamers, he said.
While the industry's revenue is growing at 5-10% per year, the number of people who call themselves gamers has grown at five times that rate.
One of the biggest opportunities in the industry (or threat, if you're slow) is the way that consumer behaviour is changing. Wilson pointed out how the music and movie industries were transformed by consumers taking control of the technology and deciding they wanted to have the content on their choice of device at their choice of time, and without paying multiple times.
Now, they are starting to seize control of the games industry too.
"The corporate graveyard is littered with the corpses of companies who resisted where the consumers wanted to go," he said, citing Blockbuster, Virgin (music stores) and HMV as examples.
To survive, the games industry must learn from the music and movie industries, Wilson said.
EA's strategy is to provide continuous access to the same games across multiple platforms, and to make sure the games are socially engaging.
He gave the example of the EA Sports Football Club, which enables you to interact with it using a wide range of platforms, including mobile phones, and to share the experience with friends. It reacts to what happens in the real world, so you can play matches to avenge a loss that your team suffered in the real world.
With friends, you can build up your status and your team's status, and share it through Facebook and the website.
"The game is no longer static," said Wilson, "no longer the same as the day you buy the disk."
The key is to have a persistent experience that goes wherever you go, supported by an infrastructure that gives you a central identity and status across all your games and devices.
It's clear that Wilson sees the app economy as a threat as well as an opportunity. While he wouldn't predict when the boxed product model might or might not die, he did say that any time gamers spend playing Angry Birds or Cityville presents a risk that EA Sports might lose that player in the long term.
EA Sports is a smart company and by nature of its business has to keep one eye on the emerging platforms and technologies.
But it shows how fast and how radically the games industry is changing that cheap apps are being taken seriously as a threat by a giant of the gaming industry.
The lesson of David and Goliath (to me at least) always seemed to be about superior technology (David's slingshot).
Of course, it's hard for independent developers to match the breadth of EA's vision. However, some of the building blocks are in place. The Intel AppUp developer program provides a single channel through which developers can market apps for a wide range of independent app stores and devices.
Even for one-man development studios, it's becoming easier to enable software to be accessed from a wide range of devices, so that the consumer can have a continuous relationship with the game, wherever they are and whatever device they have to hand.
Find out more about the Intel AppUp developer program.
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