EA: Withholding The Next Great Videogame Franchise For The Next Console Is Good Business

from the so-you-get-GTA42-instead,-jerks dept

I'll admit that video game producer Electronic Arts confuses me quite often. Any company their size is going to suffer from some internal conflicting opinions, but as an organization EA sometimes comes off as suffering from multiple personality disorder. One personality says that sales pricing on games is horrific, while the other embraces free games. They've shown that they can use trademark law well, but then manage to swallow a crazy pill when it comes to recognizing how an endless stream of sequels hurts their business. That last link is from 2007, when the boss of EA at the time admitted that pumping out sequels instead of original titles was having a negative effect on the bottom line. It seems that in five short years, the new brass at EA forgot that admission.

Speaking with Games Industry, current President of EA's labels, Frank Gibeau, discusses the chaos of the marketplace and the golden era of gaming he believes is going to come out of it. I'll admit, there's some very encouraging stuff in the piece, between once again acknowledging the emerging success of new business models, free to play games, and the power of the internet to massively expand the marketplace for gaming as a whole. That's all good thinking. But then we get to where he discusses EA's intellectual property strategy.

"The time to launch an IP is at the front-end of the hardware cycle, and if you look historically the majority of new IPS are introduced within the first 24 months of each cycle of hardware platforms," Gibeau says. "Right now, we're working on 3 to 5 new IPs for the next gen, and in this cycle we've been directing our innovation into existing franchises.

"As much as there's a desire for new IP, the market doesn't reward new IP this late in the cycle; they end up doing okay, but not really breaking through."

In case you don't want to parse through the exec speak, let me break this down for you. EA is actively working on new, original franchises, but they won't release them until the next generation of consoles comes out. This is under the notion that new franchises released in the middle or late stages of a console's life are doomed to failure or mediocrity. There are examples of why that outlook shouldn't be taken as gospel: Pokemon (released 7 years into the original Game Boy's life), Grand Theft Auto (released roughly 4 years into the original Playstation's life cycle), Gran Turismo (released roughly 3 years into the original Plastation's life cycle), or Guitar Hero (released roughly 5 years into the PS2's life cycle). All of those titles, by the way, are among the best selling franchises of all time. The point is that if you match the desire for new titles that Gibeau acknowledges with great game franchises, you build huge sales.

But even if Gibeau's supposition was true, there is a problem: the console life cycle this go around is longer than previous generations. While rumors about the next generation of gaming consoles surfaced way back in 2010, everyone's best guess for the soonest release is sometime in 2013 (and by "sometime", they mean Christmas at best). The XBOX 360 and PS3 came out in 2005 and 2006 respectively, which puts us somewhere in the neighborhood of a seven or eight year gap between console releases, depending on who gets to market first. Wii consoles are in roughly the same boat.

For the sake of comparison, here are some other timelines for console generations:

1. Console generartion jump between the NES to Sega Genesis: 4 years
2. Console generation jump between the Genesis/SNES to Playstation/N64: 5 years
3. Console generation jump between the Playstation to PS2/Xbox: 5 years
4. Console generation jump between the PS2/XBOX to PS3/XBox 360: 4 years for Xbox, 5 years for Playstation

The point is that the strategy is going to have to change with what is looking like something between 1.5 and 2 times the life cycle of the console. Customers simply aren't going to buy sequels for longer periods of time and if EA doesn't want to fill their need for new titles, someone else will. And, despite his earlier words, even Gibeau hints that he recognizes this.

"This is the longest cycle that any of us have ever seen, and we're at the point where a little bit of fatigue has set in, and people are wondering what they can possibly do next. I've seen the machines that we're building games for, and they're spectacular."

But then he goes right back to discussing how balls-droppingly great the next generation of hardware is going to be and how that's where they'll focus.

"Gen 4 hardware is a huge opportunity, and it's going to lead to a huge growth spurt for the industry."

Once again, it seems like they have multiple personality disorder. In the meantime, perhaps actually developing new material for the consoles your fans will have to deal with for the next couple of years yet might do wonders to turn around that sliding stock price.

 

Filed Under: consoles, video games
Companies: ea

Ubisoft Learns Hitting Customers Over The Head And Calling Them Thieves Is Not Good Policy

from the better-late-than-never dept

For many years, Ubisoft has been the go-to company for stories about DRM gone horribly wrong. They really seemed to believe that always-on DRM actually does something to stop piracy. That was followed with story after story after story of Ubisoft doing things that harm only paying customers and generally shoot themselves in the foot. You can go back over our posts about the company to see just how badly they have handled piracy for years. It really looked like the company was never going to learn the simple fact that it is more important to maximize sales than to fight piracy. So imagine our surprise when the following story came to light.

Ubisoft began making the rounds early this week, contacting a number of video game sites including Gamasutra and Rock, Paper, Shotgun and providing interviews. The purpose of these interviews? To tell the world that Ubisoft has changed its DRM ways. Much like the end of Charles Dickens' 'A Christmas Carol' in which Scrooge takes to the streets to spread peace and goodwill, Ubisoft wants the world to know that it believes that providing its customers with the best gaming experience is the most important part of its new strategy.

In the interview with Gamasutra, Ubisoft's VP of digital publishing Chris Early speaks about its past use of always-on DRM.

If you look back to early 2011 and before, we did at one point in time go with an always-on activation, for any game. We realized that while it was probably one of the strictest forms of DRM, it wasn't the most convenient for our customers. We listened to the feedback, and have removed that requirement from those games, and stopped doing that going forward.

This is interesting because we had been complaining about always-online DRM since at least 2010 and other forms of Ubisoft DRM since 2006. However, the fact that they are actually listening to the feedback of consumers is a huge plus for them. This is a bold move for the company that decided that paying customers wouldn't miss playing their games at all for a few days while it moved its servers.

What we're trying to do is make [playing a game] easy for players who have legitimately bought our software, and at the same time put a registration requirement, or one-time activation requirement in, that includes some element of [software] protection.

The reality is, given enough time and effort, any game can be pirated, and many are. But what we're looking to do is validate the customer, then provide value to that customer for registering their software.

This is exactly what many customers have been asking for and many other successful companies have been giving. This idea that providing value to paying customers is a better way for success has been one that companies like Valve, Stardock and CD Projekt Red have known for years. But this lesson on DRM is not the only one that Ubisoft has learned.

Ubisoft also seems to have learned some very important lessons about piracy in general. Specifically, that not all people pirating a game are doing so just to get free stuff and that not all pirated copies are a lost sale.

I don't believe that every single pirated copy is a lost sale. In some cases I'm sure it's just someone trying out a game. At some level, you can almost look at it as a demo program. So as far as many of those could've been sales? I'm not sure.

In general, when people talk about piracy, there are all kinds of reasons cited, whether it's because of an economic imbalance, where people can't afford to buy a game in that particular [geographical territory], or it's a challenge, or it's someone who doesn't believe in supporting publishers by giving them money. There's a whole variety of reasons. That's why we want to focus on the rewards and benefits of owning the software.

This is another idea that other companies have known for a while, that piracy is the result of under-served customers. By focusing efforts on making the paid option more attractive than the free options, you can capture more sales than if you spent your time trying to stop piracy.

Over at RPS, They didn't go quite so easy on Ubisoft's representatives. RPS asked many times for a statement on just how bad its DRM was for paying customers and whether Ubisoft had any regrets, but all RPS ever got were whitewashed PR statements.

RPS: Do you acknowledge that always-on DRM has been extremely damaging to Ubisoft's reputation?

Burk: I think that, as Stephanie said, I think this is where that feedback comes in. We've obviously heard from PC customers that they were unhappy with some of the policies that we had in place, and that's why we're looking to make these changes – why we have been implementing these changes, as Stephanie says.

RPS: Would you be willing to say that it was a mistake?

Burk: No, I wouldn't say that. I'll let Stephanie say what she thinks, but I wouldn't use those words. This is a process, and we listened to feedback.

Perotti: I would say the same.

This attitude of not wanting to admit to any mistakes while still making this sweeping change in policy has the potential to leave a lot of people with a bad taste in their mouths. While the company is no longer hitting their customers over the proverbial head, they have not yet apologized for those actions, at least not out right. A good apology could go a long way in smoothing things over with their past and future customers -- though perhaps just the act of changing and admitting to the change is a form of an apology for many.

Over all, this is a great move by one of the last hold outs in regards to video game DRM. While many other companies still require some form of DRM, none were quite so bad as Ubisoft in that regard. Hopefully, this change of heart will echo throughout the gaming industry and all developers will abandon efforts in the futile fight against piracy and instead focus on maximizing sales through added value for their customers. Ubisoft has a bright future ahead of itself on this path and I wish them all the best of luck.

Filed Under: drm, video games
Companies: ubisoft

Father Of The Video Game Console Showed Off 'Set Top Box' Idea In 1973

from the no-new-ideas dept

It is often said that there are no new ideas any more. This adage is most often applied to fiction and other forms of entertainment. However, this story shows that the adage can apply to technology as well. Ralph Baer is the often ignored but historically recognized father of the home video game console. His invention went on the be licensed as the Magnavox Odessey which later inspired Pong. However, his efforts in the realm of television accessories were not confined to gaming. Via Gamasutra, we have the following video which surfaced thanks to the German Science Spiele Museum. In this video, Baer shows off what he calls Participatory CATV via an "all purpose box" in 1973.

While nothing in this presentation would seem all that new and innovative to modern audiences thanks to the proliferation of the internet, personal computers and smart phones, back in 1973, this was a massive leap for home electronics. For instance, the creative use of encoded audio signals when ordering a product from a commercial is very similar to such common place codes such as UPC and QR codes today. And while home education over the internet today seems old hat, using your cable television subscription to achieve the same end goal is actually quite remarkable.

Another interesting suggestion that was only touched on but not discussed to great length was the idea of ad supported gaming. Today we see this in many forms whether it is free games that include advertising to bring in revenue for the developer, or games sponsored by or acting as an advertisement for a brand. Once video games became a large part of the home, we saw Baer's prediction come true. 

All in all, what this shows is that few ideas are completely new. Many times, someone else will have thought of it before you, or at least thought of something similar. A lesson that some companies should probably consider prior to using patent law as a way to kill competition.

Filed Under: predictions, ralph baer, video games

In A Strange Turn Of Affairs, EA Decides to Recognize Reality Of Game Pricing

from the not-what-you-said-before dept

This is a strange one. A few months back, we highlighted some comments from EA in which it postulated that deeply discounted games were bad for business. This comment from the head of EA's Origin digital distribution service was in response to Steam's sales that it holds regularly. In this comment, DeMartini claimed that such sales devalue the games and trains people to only buy cheap games. Perhaps this comment was a prophetic statement of sorts, because EA is now recognizing the reality of cheap games.

In a recent interview with the folks at MCV, another EA exec, Nick Earl, stated that people are making the switch to free games and there is no stopping it.

The future is not about one-time payments, the future is about freemium. A decent number of people convert to paying and they may not pay a lot but most of them actually pay more than you’d think.

I don’t know if freemium gets to console but I do know that humans like free stuff. I also know humans who will pay for something if they’ve tried it out and they like it.

I’ve wondered if freemium expands beyond the tablet, Facebook and smartphones, and out into consoles? I don’t think it’s impossible for that to happen.

It is actually quite refreshing to see someone in a large game studio willing to accept this fact, something that his counter parts in publishing are incapable of doing. But this is the reality. We have seen it happen in rapid fashion, particularly in the mobile space. Because of the nature of the market, game prices quickly dropped to $1 and then to freemium or free to play. These options allow for potential customers to limit the risk of acquiring a new game. This is also forcing the games industry as a whole to reconsider how it prices its software, which some still seem unwilling to do.

Another interesting thing about this comment is that Nick realizes that it is only a matter of time before free games come to consoles. This is something else we have observed with the recent announcement of the Ouya console. One of the Ouya's biggest selling points is that all games available for it must offer some form of free option, something not currently available on any current console. This idea and the low cost of the console itself led to a huge positive reaction from the gaming community, shooting the Ouya into record breaking pledges on the first day. So yes, people are shifting to free games.

As the market for games shift toward cheap and free options, it will be interesting to see what the current console leaders do in response. Will they all follow Nintendo's lead and continue on the course of "premium" prices for console games, or will they recognize that there are more ways to make money from gaming than retail sales? If they do continue down the premium path, they are quite liable to be left far behind when the market shifts. Something that EA seems to be preparing itself for.

Filed Under: cheap, free, pricing, video games
Companies: ea

Back And Forth Cloning Battles With Zynga Continue With New EA Chapter

from the karma-slapped dept

Our first introduction with Zynga was back in 2009 when the maker of Mob Wars sued Zynga over its Mafia Wars game. Zynga was accused of copyright infringement and ended up paying a pretty penny. Later on in the year, Zynga turned around and sued Playdom over what it claimed was trademark infringement. Shortly there after Zynga was sued for trademark infringment over the name Mafia Wars. Then last year, Zynga decided to sue a Brazilian company, Vostu, for various claims of copyright infringment and even some claims that the company copied its entire business model. This lawsuit resulted in a very interesting ruling from a US Judge telling Zynga not to enforce its win over Vostu, because the US Judge wanted first dibs on the ruling. Remember this last case, because it is the most important one when reviewing this next lawsuit.

Just last week, word came in that Zynga was being sued yet again over allegations of game cloning and copyright infringement. This time the player doing the suing is none other than EA, the makers of the game The Sims Social. In its complaint, EA accuses Zynga of pretty much copying the entirity of the Sims Social in its game The Ville. In a press release about the case, EA states:

As outlined in our complaint, when The Ville was introduced in June 2012, the infringement of The Sims Social was unmistakable to those of us at Maxis as well as to players and the industry at large. The similarities go well beyond any superficial resemblance. Zynga’s design choices, animations, visual arrangements and character motions and actions have been directly lifted from The Sims Social. The copying was so comprehensive that the two games are, to an uninitiated observer, largely indistinguishable. Scores of media and bloggers commented on the blatant mimicry.

Compare that to Zynga's statement about its lawsuit against Vostu:

Let’s be clear – it is one thing to be inspired by Zynga games, but it is entirely different to copy all of our key product features, product strategy, branding, mission statement and employee benefits lock, stock and barrel. We welcome Vostu into the arena of social games, but blatant infringement of our creative works is not an acceptable business strategy—it is a violation of the law.

In both statements, the accuser is stating that outright copying was taking place. That each accused game was a near replica of the other game. Such a claim from EA after Zynga made very much the same claims has got to be one of the largest legal karma slaps in history. One that Zynga will be very much lucky to walk away from.

Elsewhere in the filing, EA shows that Zynga's cloning is not limited to this one case. It lists numerous instances where Zynga had been accused of cloning other popular games. It lists the afore mentioned Mafia Wars, Dream Heights, Farmville and Zynga Bingo, all games that had been publicly accused of being clones. This was done to show that Zynga has an extensive history of cloning games.

EA's filing is also full of interesting screen shot comparisons in which it points out some of the more common similarities, such as the almost exact duplication of skin tone selections and personality types. EA even provided a video showing other similarities in animations.

Something to note in these examples is that they follow a very similar pattern to the filing Zynga made in its case against Vostu. In that filing, any time Zynga wanted to show off the similarities of the two games in question, it would show images that use as many similar elements arranged in as similar a fashion as possible. Something that EA does as well. This tactic is deployed as a method to project as much of a feeling of copyright infringement as possible. Unfortunately, it also clouds the fact that much of what is shown are in all actuality user made choices. 

In response to this lawsuit, Zynga has sent a comment out to the media.

The Ville is the newest game in our 'ville' franchise -- it builds on every major innovation from our existing invest-and-express games dating back to YoVille and continuing through CityVille and CastleVille, and introduces a number of new social features and game mechanics not seen in social games today. It's unfortunate that EA thought that this was an appropriate response to our game, and clearly demonstrates a lack of understanding of basic copyright principles. It's also ironic that EA brings this suit shortly after launching SimCity Social, which bears an uncanny resemblance to Zynga's CityVille game. Nonetheless, we plan to defend our rights to the fullest extent possible and intend to win with players.

Since we are in a compare/contrast mood today, let's take a quick look at how Vostu responded to Zynga's lawsuit.

Zynga has been accused of copying so many games that they’ve sadly lost the ability to recognize games like ours that are chock full of original content and have been independently created. Vostu has 500 brilliant employees working night and day making hand drawings and writing proprietary code for online games that our 35 million users worldwide enjoy. Zynga’s anti-competitive effort to bully us with a frivolous lawsuit — especially when we have some of the same key investors — is pathetic. While Zynga plays games with the legal process we will continue focusing on using our substantial resources to create games that entertain our customers.

There are two key similarities between these two defensive statements. The first is that both companies make the claim that their work is original and built with the companies' creative talents. The other is both are claiming that the lawsuits are less about copyright and more about attacking a competitor. It really boggles the mind that a company like Zynga has missed the poetics of this situation.

While we have repeatedly stated that the practice of game cloning is something that can be dealt with outside of the legal system, it is interesting to see these two players go toe to toe. What makes this case even more interesting than a typical cloning case, as I have tried to portray, is that Zynga set itself up for this lawsuit. Not just by copying EA's game, but also by providing the exact kind of legal precedent EA needs to win. If Zynga is to defend itself in this case, it is in effect defending Vostu's actions. Something that Zynga probably isn't looking forward to.

Filed Under: cloning, copying, hypocrisy, video games
Companies: ea, vostu, zynga

Gamestop Offers Glimpse Into Their Used-Games Facility

from the they're-tired-of-being-labeled-the-villain dept

IGN has a very cool story about what happens to the used games that get traded into Gamestop Stores. The entire article is quite fascinating and a rare glimpse into a notoriously secretive company's business, but it's the why of this article I want to focus on. Or, more specifically, why Gamestop opened their doors for this piece.

Used-game sellers generally, and Game Stop specifically, have been a constant target of game producers. They claim that used game sales keep people from buying games in their awesome new shrinkwrap. As the IGN article notes, this is a case of only looking at one side of the coin (those that are going to Game Stop to buy used games) without acknowledging the other side (those that are going to Game Stop to trade in used games). The article expands on this:

"GameStop’s bosses are obviously tired of hearing about how used games are killing gaming, about how unfair they are on the producers of the games who get nothing from their resale.

One astonishing stat is repeated by three different managers during presentations. 70 percent of income consumers make from trading games goes straight back into buying brand new games. GameStop argues that used games are an essential currency in supporting the games business."

So, if that number is correct, the interest in used games by some consumers is what drives the purchase of new games by other consumers. This is similar to what we've seen in book sales, where used books fuel the new book market. Being able to trade in games doesn't simply result in money collected for the retailer; it results in money collected by game producers as well. This goes beyond simply mentioning first sale rights. If used games are fueling the purchase of new games, what are producers complaining about? If Gamestop is to be believed, it's a significant part of the new games market:

"GameStop says 17 percent of its sales are paid in trade credits. The implication is clear - if the games industry lost 17 percent of its sales tomorrow, that would be a bad day for the publishers and developers."

So maybe game producers should be thanking Game Stop instead of griping.

Filed Under: business models, economics, used sales, video games
Companies: gamestop

Study Links Violent Video Games And The 'Macbeth Effect'

from the is-this-a-study-i-see-before-me? dept

Normally when we cover studies (or lack there of) linking violence and video games, it's to show the rather uninformed way pundits and politicians go about pretending there's an established causal link where one has not yet been proven. Whether it's the press taking the low road with sensationalized headlines about Anders Breivik, or politicians attempting to get ever more inflatted warning labels on games, or simple random accusations by judges in the face of evidence to the contrary. The theme in these types of stories is clear and ridiculously simple: if the average person plays violent games, they're going to desensitize that average person and cause them to commit non-average atrocities.

So it's a bit interesting to see a study on violent video games produce some more nuanced results, such as a recent study from the University of Luxembourg that showed what researchers are referring to as "the Macbeth Effect" in the average gamer:

The researchers had 76 people play violent video games for 15 minutes, after which they were told to select gift items for others. Those who were "inexperienced" with violent video games were more likely to select "hygienic products" like shower gel, deodorant, and toothpaste than those who played violent video games on a regular basis

"The need to cleanse to keep moral purity intact, the 'Macbeth effect,' is a psychological phenomenon in which a person attempts to purify oneself in order to cope with feelings of moral distress," said lead researcher Dr. Andre Melzer. "We find that the Macbeth effect can result from playing violent videogames, especially when the game involves violence against humans."

The reference is from Shakespear's Macbeth, in which Lady Macbeth obsessively washes her hands after participating in a murder plot. And, yes, I know that some of you will say that this effect primarily showed up in those that were "inexperienced with violent video games", but that's the whole point. Those that are inexperienced with violent games are so because they aren't the kind of people those games appeal to. The games themselves aren't corrupting the minds of these people, nor are they likely corrupting the minds of those that actually seek them out. There are simply some people who like those kinds of games and some who don't.

Filed Under: macbeth effect, moral distress, video games, violent video games