Ahead of the pack

The video game industry is fragmenting. That’s the familiar refrain. The irresistible rise of smartphones and tablets, and the arrival of smart TVs and Android boxes like Ouya, has broken apart the traditional industry forever.

And then the PlayStation 4 (PS4)and Xbox One are announced to a cacophonous reception. In the midst of the chaos, giant games publishers Activision, Ubisoft and Electronic Arts (EA) are trying to make sense of this shifting marketplace.

Moving with the tide

Out of those, it is EA that has perhaps moved most gracefully with the tides of change. From 2005, the company has heavily invested in the digital sector with purchases of early mobile superstar Jamdat, and later, casual gaming specialists Playfish and Popcap. Add to that the publisher’s own PC digital games service, Origin, and 76 per cent of its annual income now comes from digitally-distributed games and services.

According to Frank Gibeau, President of EA Labels, the publisher is revelling in the excitement surrounding the Xbox One and PS4. “Going into E3, a lot of people were saying the tablet killed the console,” he says. “The year before that, they were writing that social gaming had killed the console. But the console is back and the pent up demand is being unleashed.

EA will certainly have a huge role in the ongoing success of the consoles. Its Fifa, Madden and NBA sports titles will all be launch blockbusters, as will Battlefield 4. Indeed, Fifa14 is being given away to gamers who pre-order the Xbox One machine. The deal led some to wonder whether EA was siding with Microsoft in the coming console war.

“Some have suggested that EA tilted toward Xbox One and that’s actually not correct. What you’re seeing are tactical marketing programmes,” says Gibeau.

As a veteran gamer, Gibeau sees an interesting new dynamic entering the business; the generation that grew up with interactive entertainment is now moving the experience from the bedroom to the front room, and involving the whole family in the process. Which means Sony, Microsoft and Nintendo have no foes to face.

“I think what’s cool is that there’s going to be a massive amount of research and development and innovation going into the living room entertainment experience. We don’t see a wall that we can’t get past, we just see a lot of new innovation and possibility,” he says.

Consoles versus the rest

So how competitive are the new consoles? “PS4 and Xbox One are the best living room integration solution,” says Gibeau. “Smart TVs aren’t there yet because they have to rely on streaming and they don’t have high-end processors or resident memory. Next-gen consoles are the Ferraris in this space and it will be interesting to see how the fight takes place between smart TVs, dedicated consoles and then new solutions we haven’t even thought of.”

As for EA’s own plans, during the Gamescom event in Cologne in August, Gibeau told several reporters that the company has six unannounced new IPs in production.

For him, the current priority is getting the preparations right. “The first trick is to move to a development environment where there is a lot of leverage and efficiency,” says Gibeau. “Last generation, our development costs went up by 30 per cent. This time we’re running flat and it’s because of two things. The first is the engine development; we cut a lot of costs out by focusing on Frostbite and Ignite. The second is we’ve adopted a smaller portfolio. We were shipping 40-60 games a year, now we’re in the teens.

“We’re looking at the first three years of this console transition as an opportunity to launch some new titles. We have announced Titanfall, UFC, Mirror’s Edge and we have the Star Wars relationship with Battlefront. That’s four businesses that are new to EA,” he adds.

Gibeau has apparently been playing Minecraft with his kids and dealing with the arguments that explode when one destroys another’s building project. Will EA consider entering the toy-crossover market, going up against Activision’s Skylanders or Disney Infinity? There’s surely room for interactive Dragon Age, Mass Effect or Plants vs Zombies figurines?

Gibeau laughs. “Disney had a clear opportunity because they had a diverse IP portfolio so they could figure it out, and Activision was brilliant in terms of hitting it first,” he says.

“I don’t want to be third into the action figure and portal market. We have other ways to grow our business. We are open to innovative ideas.”

— Guardian News and Media