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EA proclaims SWTOR preorder breaks records
Star Wars: The Old Republic set the new bar for EA's pre-order sales according the to the notes for the Q1 Fiscal Earnings Release. The previous bar was set by Battlefield 3, but according to President Frank Gibeau during the investor's conference call today, SWTOR far exceed BF3's pre-order sales. In fact, according to Gibeau the sales exceeded the company's expected sales curve, therefore breaking records no one at the game developing company could have expected. As for the release date that everyone seems to be waiting for, CEO John Riccitiello explained during the call that although they have set a wide margin for the release date, they are confident in the projected release of holiday 2011. It is not uncommon according to Riccitiello for an MMO to withhold an exact release date until four to six weeks prior to launch. That said, EA CFO Eric Brown did say, "In September, we will be in a position to call the ball and give you a hard ship date" following the major beta testing push. [Update: Originally, we quoted Frank Gibeau with the "hard ship date" quote, but the official transcript credits Eric Brown with the statement.]
EA to acquire PopCap Games for $750 million
Rumors first began circulating nearly three weeks ago when TechCrunch reported that casual gaming pusher PopCap was going to be acquired for over $1 billion dollars. Now, Electronic Arts has announced its intention to purchase the Seattle-based developer for $750 million, including $100 million in stock. The acquisition is expected to close in August of this year, pending the usual regulatory approvals. "EA and PopCap are a compelling combination," boasted CEO John Riccitiello, clearly envisioning a newly expanded EA digital empire. "PopCap's great studio talent and powerful IP add to EA's momentum and accelerate our drive towards a $1 billion digital business." "We picked EA because they have recast their culture around making great digital games," said David Roberts, CEO of PopCap. "By working with EA, we'll scale our games and services to deliver more social, mobile, casual fun to an even bigger, global audience." In case it's not obvious, we'll spell it out for you: O-R-I-G-I-N.
EA to be the sole source for SWTOR downloads [updated]
Thanks to our friends at Darth Hater, Massively has learned that the highly anticipated MMO Star Wars: The Old Republic will be sold as a direct download only through Electronic Arts itself. In an interview with CEO John Riccitiello, the Wall Street Journal uncovered news of EA's new service, one it's calling Origin. This service will provide customers with a download service for all EA games, including the Battlefield games, the Need For Speed games, and the aforementioned Star Wars: The Old Republic. Origin is to act as a social network hub as well as a place to track all your EA game purchases, explained Riccitiello to the Wall Street Journal. This functionality will be available to all users even if they did not purchase the game directly from Origin. However, Riccitiello clarified that Star Wars: The Old Republic will still be purchasable in box form via retailers; only the digital download itself will be exclusive to Origin. Presumably, other all-digital services such as Direct2Drive and Steam will not carry the game. The full article from the Wall Street Journal is available with a subscription to the newspaper's website. [Update: Stephen Reid posted to the official SWTOR forums: "However, even though you'll only be able to buy and download The Old Republic digitally via Origin, you will still be able to buy a retail, boxed copy of the game from your favorite retailer (and that includes online retailers who'll ship the box to you). BioWare and EA know the value many gamers place on a cool boxed product... and we're producing a cool boxed product. (Or maybe I should say 'boxed products'.)"]
EA's Riccitiello: Fail well and learn from it
EA CEO John Riccitiello may not have succeeded as grandly as he sought to during this generation, but he's certainly not lacking in vision. EA has seen tremendous growth in its digital business and while Riccitiello admits his company "dropped the ball" at the beginning of the cycle, he sees every failure as an opportunity. During his commencement speech at the Haas Business School at the University of California at Berkeley -- of which he is an alumni -- Riccitiello said that his many failures over the last four years have helped him to learn and grow. According to Venture Beat, he attributes the Haas school's "students always" mentality, of learning from every failure as a way to set yourself up for greater success, as a big motivator in those dark times. "Everyone falls down. Everyone loses a game or gets a bad grade," he said. "We had to do these three hard things when the press and the financial analysts told us we were crazy -- that the cutting was great, but the investment in digital was just not a good idea. It proved very hard to hear the negative drumbeat while tackling very hard challenges at work." Riccitiello said he "failed well." "We are students of our own failure," he concluded. "We used our failure to shape and impel us to a better strategy. One that we believe will ultimately succeed in ways that our previous strategy, even if perfectly executed, could never have done."
EA waffles on Star Wars: The Old Republic launch date, expects it before next March
EA's fourth quarter investor call today had some Jedi mind tricks going on when it came to the topic of highly-anticipated MMO Star Wars: The Old Republic's launch date. In documentation provided to investors, the company noted the title is "expected to launch in either Q2 FY12 or Q3 FY12." Translation: Second half of 2011, as was previously stated. However, during the investor call, EA CEO John Riccitiello said, "The launch date, while in our fiscal year (before March, 2012), is not yet certain." The hedging continued later with CFO Eric Brown, "While we fully anticipate launching Star Wars: The Old Republic in Q2 or Q3, the low end of our guidance range assumes the outside possibility of a January launch." If you're playing along at home: when the paperwork, CEO and CFO aren't on the same page, it means EA isn't exactly sure when this thing is coming. One thing is for sure: they hope it's by next March.
Mass Effect 3 delayed to adjust mechanics for 'larger market opportunity'
As saddened as we were by the news that Mass Effect 3 wouldn't reach us until next year, after an EA earnings call today we're hovering between befuddled and intrigued. When asked about the delay, EA boss John Riccitiello said, "Essentially, step by step, [BioWare is] adjusting some of the gameplay mechanics and some of the features that you'll see at E3 that can put this into a genre equivalent of shooter-meets-RPG, and essentially address a far larger market opportunity than Mass Effect 1 did and Mass Effect 2 began to approach." ... So what does that mean? Well, mentioning that Mass Effect 2 was closer to what EA's targeting would seem to indicate more of an emphasis on action. But if the company's looking for "a larger market opportunity" a multiplayer component seems a surefire way to achieve that. Here's hoping we remember to check this post after E3 to feel either really smart or a little sheepish about our prognosticating. Also, hello future us! Hope you're having a good summer!
Analyst says one million subscribers are attainable for SWTOR
At the Electronic Arts fourth-quarter shareholders conference earlier this year, CEO John Riccitiello stated this about his soon-to-be-released MMORPG Star Wars: The Old Republic: "At half a million subscribers, the game is substantially profitable, but it's not the kind of thing we would write home about. Anything north of a million subscribers, it's a very profitable business." This has been questioned by fans and shareholders alike as all wonder whether the game could actually reach the goal of one million subscribers. According to Janco analyst Mike Hickey, the answer is yes! Gaming business website Gamasutra quoted Hickey as saying that Janco "suspect[s] a willingness from investors to believe [500,000] to 1 million Star Wars MMO subscribers is an attainable target." Hickey has been focused on games and the gaming industry for some time now, specifically on EA, so the rise and fall of EA-published Warhammer Online cannot be off his radar when he makes his predictions about SWTOR. Ultimately, Hickey states that one million subscribers will mean $161.9 million in gross sales and up to $35 million in total profit for EA if his prediction is true. Although there is still no exact release date for Star Wars: The Old Republic, we will know how close to the mark Hickey's prediction is when the game launches later this year.
Riccitiello: Battlefield 3, CoD ad campaigns could easily pass $100 million
While delivering a keynote speech at the Ad Age Conference in New York, EA CEO John Riccitiello pitched the marketing moguls in attendance on video gaming's increasing prominence in the advertising industry. Not just with regards to in-game ads -- though he did talk up their strength, citing President Obama's use of virtual billboards during his campaign -- but also on the growing market of video game advertisements themselves. Riccitiello anticipates that Electronic Arts and Activision will drop "a couple hundred million dollars [worth of] marketing" on the next iterations of their respective shooter franchises, Battlefield and Call of Duty. We've got a better idea -- why not distribute that money directly to the fans, which they can then use to buy more copies of your game? Like, that just seems like Marketing 101.
Riccitiello: EA 'dropped the ball' at the start of this gen
EA boss John Riccitiello spoke at the Goldman Sachs Technology and Internet Conference this week (via GI.biz), stating that EA "dropped the ball" during the transition from the previous console generation to this one. "Our IP deteriorated, our costs went up, and we didn't really have an answer for the rise of digital." Over the last three years, it's been "part turnaround, part transformation" at EA, Riccitiello said. This initiative has seen the publisher cut its yearly slate of titles in half, reduce costs internally and ramp up its digital business -- a $700 million cash cow in 2010 for EA. Finally, Riccitiello talked Star Wars: The Old Republic, which he hoped would take "a big chunk" of the World of Warcraft userbase. As we've heard before, it needs at least 500,000 subscribers to turn a profit, but many more to be considered a breakout success. "We want to take a share; we want a leadership position here. And our product is innovative in a number of ways."
Riccitiello says it would take 'Dead Space 3' for franchise to produce a 5-million seller
EA CEO John Riccitiello believes that the Dead Space franchise could reach the "five million unit cadence" with "Dead Space 3," though he didn't outright confirm the next sequel. Riccitiello was listing off the company's "strong, growing franchises" at the Goldman Sachs Technology and Internet Conference, reports CVG, when he footnoted Dead Space as a franchise close to becoming one of EA's biggest. After rifling off names like Madden, FIFA and Need for Speed, the exec said, "That excludes Dead Space because I think it will probably take Dead Space 3 before we get into that five million unit cadence versus say three, four." EA has already invested quite a lot in Dead Space, making it an expansive, transmedia property (spanning animated films, comics and a novel). That commitment seemingly paid off with the release of Dead Space 2 last month. The sequel trumped the first game's launch sales "2-to-1," according to EA. Now, if only there was room in EA's purse to support just one more franchise.
The "big bet": EA aims at a half-million subscribers to make SWTOR profitable
"It's a big bet, but it's the right kind of bet to make for EA." These are the words of BioWare's Ray Muzyka, responding to a conference call to EA investors in which the company admitted that Star Wars: The Old Republic will need to pull in at least 500,000 subscribers to become profitable. This is substantially less than the two million subscriber mark that industry analysts previously predicted. During the conference call, EA CEO John Riccitiello drew a line in the sand between financial failure and victory for The Old Republic: "At half a million subscribers, the game is substantially profitable, but it's not the sort of thing we would write home about. Anything north of one million subscribers is a very profitable business. Essentially it turns on a dime from being quite sharply negative in terms of its EPS [Earnings Per Share] impact to positive the day the product ships. So it's our view that we can be very successful without fundamentally challenging the market leader [World of Warcraft] because we think we'll probably hit the smaller competitors harder when we get out there. Of course, we have no particular ambition to be a distant number two. Our ambitions are higher than that, but we throttle back a little bit relative to our financial projections." While Riccitiello admitted that the title has seen "significant development costs," he claims that costs proposed by the public are far higher than the actual costs of The Old Republic's development. He declined to share the actual costs or the number of staff working on the game. EA also announced that The Old Republic's release date will be in calendar 2011. BioWare has as recently as this January targeted a spring 2011 release. EA's estimate puts its launch somewhere between March 31st and December 31st of this year.
Riccitiello: Digital downloads won't kill physical media just yet
EA CEO John Riccitiello said recently that 2011 would see digital sales overtaking retail sales, but before you start trashing all of those $60 discs and plastic cases you bought, not so fast. Riccitiello also says that game discs aren't going away "any time soon." Sometimes it's just easier to plug in a disc or buy a box than receive a huge download over a relatively slow connection, he says, and what the industry will end up doing is choosing certain cases out of all of the options for various uses. "I think it'd pretty silly for us to stream Scrabble to you," he says. "Why would you want to pay for bandwidth for us to redraw a Scrabble board sixty times a second? That's just sort of bad math, if nothing else." Not to mention that "the disc can actually be a great starting point for a digital business, like an MMO, World of Warcraft, for instance." While digital and streaming services will almost certainly see growth this year, it's far too early for game makers and retailers alike to completely abandon physical media. The consumer, says Riccitiello, "doesn't care what the technology is, what lives behind the veiled curtain; they just want it to work." Amen.
EA's Riccitiello says game discs aren't going away
While Electronic Arts CEO John Riccitiello thinks digital distribution will finally outstrip its physical counterpart in 2011, he stops short of predicting the demise of retail packaging. In the second part of an interview conducted by Industry Gamers, the EA bossman sings the praises of the disc and debunks trendy cloud computing-based notions of gaming's near future. "Sometimes you're not going to play because your internet connection is down and sometimes delivering a game by streaming is a really inefficient way to do it," Riccitiello says, in what might be music to the ears of gaming luddites dismayed at the thought of renouncing actual ownership of their collections. Riccitiello goes on to posit that services like OnLive will struggle with latency-dependent titles (your average first person shooter, for example) and ultimately concludes that the days of 100% digital delivery are pretty far into the future.
"Full stop": John Riccitiello predicts digital sales dominance in 2011
Out with the old, in with the new -- these words are often used every January, but for John Riccitiello they also signify the balance tipping between digital and physical sales. As Electronic Arts' CEO put it bluntly to Industry Gamers: "At the end of [2011], the digital business is bigger than the packaged goods business, full stop." Riccitiello drew this conclusion after looking at the recent market trends of titles like Lord of the Rings Online and EA's own free-to-play games. In fact, he admits that the "dirty little secret" of EA is that some of its F2P titles end up being the games players drop the most money on per month, such as those who pay upwards of $5,000 a month for FIFA Ultimate Team. With EA on the cusp of launching Star Wars: The Old Republic this spring (fingers crossed), the question of EA's MMO pricing structure is still up in the air. However, Riccitiello thinks that we're in for a year of transition to mostly digital purchases: "I think these business models are going to find their own feet. We're very careful about making sure we price appropriately for platform and also for the intellectual property."
Riccitiello says this is the year digital overtakes retail
EA CEO John Riccitiello, one of the biggest advocates for the rising dominance of digitally distributed games, told IndustryGamers that he expects digital sales to exceed sales made in the retail space this year -- he predicted digital distribution would account for half of all game sales in 2010 earlier last year. "Then, you know, I think that we'll find ways to even sell our packaged goods content in chunks and in pieces and subscriptions and micro-transactions," he added. Riccitiello brought up the success story of Turbine with Lord of the Rings Online, where the developer saw revenues triple by switching to a freemium model. For EA, there's been similar success -- Riccitiello revealed the company sees its highest average revenue per user from paying users in free-to-play games. "You think about that and say, 'how can a free game be the game they pay the most for?' We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it's free. Dirty little secret." According to Riccitiello, striking success in digital distribution isn't about one magic formula, it's about giving players options and seeing what they most respond to. "They may want to buy it on an iPad; they may want to get it through the social network, they may want to pay for it through micro-transactions and monetizing, or they may want to pay for it all at once," he added. "They may rather pay a subscription price in order to count on what their costs are going to be, but they may want to pay for it all at once and never have to pay for it again. We're in all of those businesses and I think the way this is going to work is that the models that the consumers like the most are going to grow the most."
EA calls Activision's legal claims 'deliberate misdirection'
In light of last night's revised lawsuit announcement by Activision, Electronic Arts corporate spokesperson Jeff Brown responded on behalf of his company, characterizing the announcement to the LA Times as "a PR [public relations] play filled with pettiness and deliberate misdirection." The revised suit added EA as defendants in the case between Activision and West/Zampella, citing several alleged interactions between the ex-Infinity Ward heads and EA, a relationship said to have been fostered by talent agency CAA. Brown continued, accusing Activision of attempting to "hide the fact that they have no credible response to the claim of the two artists who were fired." He further contends that West and Zampella "now just want to get paid for their work." Unfortunately, it seems for all parties involved that this whole affair is a bit far beyond the basic reconciliation point.
Activision claims EA and former IW execs schemed to 'inflict serious harm on the company'
Following last March's lawsuit filed by ousted Infinity Ward execs Jason West and Vince Zampella against former employer Activision, and Activision's countersuit filed the following month, Activision has filed a motion to amend its countersuit based on new evidence born of the discovery phase. What kind of evidence? Namely that "Electronic Arts conspired with two former senior Activision executives, West and Zampella (the "executives") to derail Activision's Call of Duty franchise, disrupt its Infinity Ward development studio, and inflict serious harm on the company." As a result, the lawsuit now includes Electronic Arts as a cross-defendant and is asking for $400 million in "actual and punitive damages from EA and the former executives, including profits Activision would have made but for EA's interference, costs incurred in rebuilding the affected studio, and damages suffered as a result of delays and disruptions." Activision is also asking the court to allow it to "recapture compensation previously awarded to its faithless executives" and, even more notable, "to prevent Electronic Arts and the former executives from benefiting from their illegal conduct." The 39-page document details the history of Infinity Ward, the Call of Duty franchise and the public termination of its two founders, West and Zampella. It seeks to prove that West and Zampella colluded with Electronic Arts, despite having more than two years on their employment contract. The suit reveals that, following a private meeting in August 2009 at EA CEO John Riccitiello's house in San Francisco -- coordinated by CAA agent and former Xbox face Seamus Blackley -- CAA enlisted the help of lawyer Harold Brown to evaluate their employment contracts. Brown was ostensibly chosen because he is a "former Activision board member and former legal counsel to Activision."
EA's Riccitiello: Wii could use price cut, support toward third parties
EA CEO John Riccitiello feels that if the Wii would drop its price to $99 that it would "explode" back to its '07 and '08 sales levels. In an interview with IndustryGamers, the executive expressed that the recent Wii declines come from Microsoft and Sony offering competitive "gesture-based" peripherals against Nintendo's device. Riccitiello also dragged out the classic complaint regarding Nintendo's treatment of third-party content. "I think it's a frustration for all third-party publishers, when a platform holder does less to promote third-party content. A great third-party company is Apple, a company that's all third-party content," he stated. "I don't care whether it's Mario or Twilight Princess or GoldenEye; it was their own content. I'm going back to N64, and I can go back to SNES if you want, but they've never really been a heavy third-party supporting system." He concluded that it's not that Nintendo doesn't try to do good by third parties, just that Nintendo starts "the morning thinking what's best for [its] own intellectual property."
NBA Elite cancellation 'squarely on my desk,' EA CEO says
According to CEO John Riccitiello, EA's perhaps unprecedented decision to cancel NBA Elite 11 so late in its development was his. "There aren't many decisions that are essentially squarely on my desk," he told Kotaku. "This was one." Riccitiello found this to be the least worst solution to the problem of a game riddled with bugs on the eve of release -- a "bad game," as EA Sports' Andrew Wilson put it. Either EA could have launched the game as it was (against the impressive NBA 2K11 competition), delayed it beyond the limited release window for basketball games (which would have drastically reduced market share and given the team less time to work on the next sequel), or it could cut its losses. "So there's the table: You can ship a product you're not proud of and compete for marginal share; [or] you can delay the game to get a better product, but that's going to have a knock-on effect," Riccitiello recalled. "And we made what I judged to be the best call given the circumstances." The cancellation of Elite was tempered by EA Canada's ability to quickly assemble a standalone release of NBA Jam for PS3 and Xbox 360 (in addition to the original Wii version), but it did mean that the company would not release a simulation-style competitor to go up against the NBA 2K series this year. Riccitiello seems okay with that outcome. "I don't think the consumer was served badly by buying 2K," he admitted. "It's a good game. And I think we're better served." As for releasing the full version of NBA Jam on more platforms, Riccitiello believes "people got to see what a good game that is" ... since the downloadable version got benched alongside Elite. [Image source: stayfly2407/YouTube]
Riccitiello: Skateboarding genre is dead, but music games will survive
EA CEO John Riccitiello has bad news for fans of skateboarding games: The genre is dead. Action sports games still have a place in players' consoles, he says, but "for the level of excitement out there, skateboarding seems to have run its course as the representative example in that broader genre." Too bad, Tony Hawk players -- the competitor of the company that makes your games says they're not exciting. Though in his defense, EA's own Skate 3 wasn't that exciting either. But there's good news, according to Riccitiello, for another flagging genre. Music games can possibly make a comeback, the CEO says, though even he isn't sure how. "I think the music genre is going to recover ... It could be based on some new innovation. Maybe it all becomes dance-based." Oh, that's rich, Riccitiello -- a super-popular dance game based on some kind of innovative technology? If only that "falling knife" Harmonix made something like that.
