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Electronic Arts is in the midst of rebooting its EA Sports business. Not only is the company re-entering basketball games with NBA Live coming this fall, it has also snatched the all-important license to Ultimate Fighting Championship mixed-martial arts fighting games from THQ.
The video game giant is also well beyond testing the waters in digital games. It is leading the charge by taking sports game franchises such as FIFA into new platforms such as Gree’s mobile social game network in Japan and digital-only downloadable content (DLC). EA has had a free-to-play version of FIFA in Korea for six years and it expects to run with that business model in Asia. We talked with Andrew Wilson (picture below and above left), head of EA Sports and the man in charge of the reboot. Here’s an edited transcript of our interview.
GamesBeat: Your big news was the getting the rights to make UFC games.
Andrew Wilson: Yes! Well, we had lots of big news, that was the one that seems to have broken through.
GamesBeat: That sounds like it was a long time in the works.
Wilson: Yeah, they had a relationship with THQ for a very long time. We have good relationships with most people in the sports industry… We’ve always remained close with them. An opportunity came up recently and we decided to jump on it with something we have a passion for. We think they’re a global brand and a global sport. I think it presents a great opportunity for us to continue our strategy of global cross-platform experiences.
GamesBeat: So I guess video games have a pretty good trash-talking environment, and sports video games have more of that. And fighting games seem to have an even bigger trash-talking environment. There was a lot of history of such trash talk with UFC’s Dana White (pictured above, right). Are you used to that?
Wilson: The conversations that happened in the past, I actually wasn’t part of those. When we started these conversations, we only talked about the future. What I can say is, I dealt with Dana, I dealt with Lorenzo [Fertitta], I dealt with their team. They are consummate professionals, they’re very passionate about what they do, I think they do a tremendous job, and as Dana said on stage, this was the relationship that we always wanted to have, and finally it’s happened.
GamesBeat: It seemed like at first that investment in MMA (EA’s mixed martial arts game in 2010) was sort of questionable or risky?
GamesBeat: So it must feel good to have it sort of pay off like this.
Wilson: Yeah. You know, I’m personally a fan, I think many people in our sports organization are personally fans. I think we have been watching the sport for a very long time. I watched in the early ’90s when it was Royce Gracie and Ken Shamrock. I watched PRIDE with Sakuraba and those kinds of guys fighting in Japan, and Rickson Gracie, Royce’s older brother fighting in Japan. So I’ve always believed that it was going to be the fighting sport that prevailed. That it was always going to be a global phenomenon, and that it just needed some great organization to drive it. I think that’s what Zuffa brought to it. For us, we always wanted to be involved. At the time we built our game, the UFC license wasn’t available. We worked with another great promotion in Strikeforce, which incidentally now is owned by the UFC so clearly they also saw value in that promotion and in the fighters that were part of it. So I think now the opportunity to kind of consolidate, for us, around what is the number one brand in the sport, the UFC, is a pretty big deal.
GamesBeat: And is it global, across all platforms, then?
Wilson: Yeah. Absolutely.
GamesBeat: And how soon does it kick in?
Wilson: The ink is literally still wet on the deal. But certainly when we announced the ink was still wet. So we finish out E3 and then we’re going to sit down with a team from the UFC and our development organization, our marketing organization at EA Sports, and start to map out what the future looks like. It’s a long-term deal, so we are looking at this as a long-term play for us. I hope that we’re still talking about the growth of UFC 20 years from now, like we do today about Madden and FIFA.
GamesBeat: I suppose the good thing is that you already have fighting games in production, right? Not starting from ground zero…
Wilson: We have built great fighting games. Our MMA game was a great game. It lacked the number one license, but as a core game mechanic, it was a great game. Fight Night Champion is a boxing game with fighting physics and striking, it’s arguably the best fighting game that’s launched to date. Albeit just one facet of what the UFC game will ultimately be. So we’re certainly not starting from ground zero. We certainly have a history in the…pugilistic arts? And I think that we definitely have a passion for it. So I think you’re going to see some big things from us.
GamesBeat: And other licenses are also possibly, I guess…getting used again? NBA…
Wilson: NBA, absolutely. We never didn’t use NBA. Even last year we launched NBA Jam On Fire Edition, so we’ve always maintained a close relationship with them, we continue to release NBA products. But of course now we are in the process of working towards announcing some very aggressive plans for NBA Live this year.
GamesBeat: So you’ve kinda rebooted EA Sports in general, then. How do you look back on the process…?
Wilson: In what way?
GamesBeat: I guess…restarting NBA, baseball may be in the works as well…?
Wilson: Is that a particular question that’s kinda…?
GamesBeat: Okay, is an MLB baseball license in the works?
Wilson: It is not a focus right now. What you’ve seen of Madden in the last week is, we have made a huge, the biggest investment in Madden gameplay that we’ve ever made. If you’ve seen what we’ve done with NCAA and Heisman winners there, and all the features of NCAA, that’s big. FIFA of course continues to grow, we’ve got a relaunch of NBA this year. We’re coming off just relaunching FIFA Street and SSX, in Q4 of the last fiscal year, and we now have UFC on the horizon. We’ve got plenty to take up our time right now. Baseball, I’m a huge baseball fan, I watch a lot of baseball, my wife and I go to a lot of Giants games, but it’s not a focus for us right now.
GamesBeat: Remind me what you guys have said to investors on EA Sports for the coming year… Is there anything from the last call that painted a road map? One thing I wonder about is, there is a console transition going on…
Wilson: If we ever believe what we read, yes, there is.
GamesBeat: Typically there’s a lull in game sales during that time, so it seems like it would be a challenging year coming in the next year, to keep sports growing. I don’t know what other factors may be big enough to flag for investors like that.
Wilson: We’ve not flagged anything of that nature. We continue to see our franchises go from strength to strength. And we see that based on three key pillars. We continue to drive innovation that fundamentally changes the way you play. So every game that you play from us this year is going to play fundamentally different from the game you played last year, in a better way. We’re adding physics to Madden, we’re adding a new skating engine to NHL. Real-life plays in NCAA changes the way you think about it. Again, when you hear what we’re doing with NBA Live, again, innovation that fundamentally changes the way you play.
The second thing is, we’re moving from product to product plus service. We’re changing the engagement curve on our products through services like EA Sports Football Club that we launched last year. Like Madden Ultimate Team, Hockey Ultimate Team, FIFA Ultimate Team. Like what you see with connected careers, across platforms in Madden. Or GM Connected in NHL. We’re changing the engagement curve on our sports properties to where actually we’re seeing much higher levels of customer play. And as a result, monetization deeper into the season than we’ve ever seen before. So we feel very good about that.
And then lastly, what we’re seeing with our ability to connect gamers to each other, connect gamers to their sport, their team, their club, their players like no other brand can, and connect experiences across platforms, so that now you can engage on your mobile phone and interact with your console experience or interact with your Facebook experience… This level of connection is something that we believe will continue to grow our business in the coming year. Because that’s how people are playing. Interacting with friends in the context of games is more important now than it’s ever been. A connection with your club, for many sports fans, is the strongest relationship they have in their life, other than their immediate family. The battle that they have against their rivals and the way they rally with other fans around their club is something that we can deliver to them like no other brand can. And then ultimately, regardless of what happens with individual platforms or consoles or pieces of hardware within that gaming experience, we’re building experiences that go across there. So that with the ebb and flow of how you play, you are always connected to that experience. And nothing you ever do is wasted. No time is wasted. We announced with FIFA this week that for all the FIFA 12 users, they bring everything they achieved last year right through to this year. That’s an important part of driving that year-over-year persistence. And you’re going to see that in all of our franchises.
GamesBeat: So I guess monetization on the digital side is very important. But you have to balance that against what fans like to get for what they pay up front, right? How do you guys find that balance, what have you learned about it? There’s a point where people feel like, hey, I’m being charged again, or being charged too much for something that’s online.
Wilson: I look at the review scores in our games, so I think the critical press do a very good job of giving a review score, a measurement of quality, where value is a very key component of that measure of quality. It’s about… Is the game fun, is the game deep, is the game engaging, and is the game good value for money? We come off a 90 rating for FIFA last year, we come off an 89…
We had great review scores on NCAA and SSX and FIFA Street and NBA Jam On Fire Edition and NFL Blitz. All at varying price points, but all were seen to be high quality experiences and good value for money. So when we go out and we’re building a game that is going to…where a series of content is going to ship on a disc, we are very conscious of the need to ensure that we are providing great value for what a consumer gets for their money on that disc. Now, what we also know, however, is that gamers are playing our games for much longer than they ever did before. The decay curves are changing. Decay curves of play used to be five or six weeks and then you would see it go down. Then that would ramp up on something else. On our games in this past cycle, six months into the season, six months post-launch, we’re seeing record days of online play. So people are playing our games more and they’re playing them longer than they ever had. And as a result of that, they’re getting great value for money, but they’re also saying, hey, this is the game I want to play. I gave you 60 dollars, but rather than spend 60 dollars on something else that I may or may not want to play, I would love to be able to extend and enhance the experience I have, the experience I love and the experience I play with my friends.
That, for us, is the role of DLC. That, for us, is the role of ongoing services that form part of that franchise experience. And so in our… The feedback that we get is very positive, that we get that balance right. There are things that we do at 14.99 like NFL Blitz that are seen as incredible value for the amount of game you get there. And FIFA at 60 dollars is incredible value, it’s a giant game, it’s probably bigger and has more hours of gameplay and online support than pretty much any other game in our industry. But it’s also one that monetizes DLC at a very high rate, because of that engagement and because gamers understand that while they’re getting great value for money on the disc, they love the notion that they can extend and enhance that experience, much deeper into the season, and maintain that connection with their friends, maintain that connection with their club, and maintain that connection with EA Sports.
GamesBeat: How do you view the rising quality of free-to-play online games, too?
Wilson: I think it’s great. We’ve been free-to-play with FIFA in Asia now for I think six years? And it is an incredibly high-quality game. In Asia what we’ve come to realize was, for the most part, people weren’t saying, we don’t want to pay to play your game. What people were saying is, we want to know that this is a game that we want to play long-term, before we pay. And as a result of that… I think when we had a packaged-goods FIFA based in Korea, I think we were at about a 25 million dollar business down there. I think what we’ve talked about publicly is that these days, that’s nearly a 100 million dollar business. That’s a free-to-play experience.
GamesBeat: Is that for EA or for EA Sports…? $100 million, is that for EA Sports, or…?
Wilson: That’s for FIFA. FIFA alone. That is built off a quality experience, a high-quality, great, 11-on-11 twitch-based experience. It’s just a different business model. And I think we’ll see some of that continue in the west. But we’re prepared for that, we’re prepared to deliver great quality games, and we believe that great quality games, regardless of what business model we go to market with, they monetize at a high rate. Because consumers have an appreciation and converge on quality.
GamesBeat: I think [EA CEO] John Riccitiello talks a lot about the market funnel starting with free-to-play and leading down to $60 paid games and subscriptions. How does the funnel start for you guys? What do you see as far as what happens at the top of the funnel, and what comes down…?
Wilson: You mean the kind of end of the funnel up to those that actually pay? I mean, we see… Here’s the way I look at it…
GamesBeat: I don’t know, is Facebook the top now? What is the top of the funnel?
Wilson: I think by the very nature of our business, sports in and of itself is the top of the funnel. You start with one of the biggest communities in the world. Sports is the world’s largest circle… There are more people watching and engaging and pontificating on sports than I think just about any other subject matter in the world. And they are more passionate about it than just about any other subject matter in the world. So that, for us, represents the top of the funnel. There are a series of access points, then, which is Facebook, which is mobile devices, which is our console networks, which is Origin, which is EASports.com. There are a number of access points for that funnel, but the top of the funnel is very truly the global community of sports fans. And what we’re seeing is, the more and more experiences that we provide based on the different access points is that… We’re providing, one, a greater opportunity for people to monetize at levels that make sense for them. There are going to be console people that monetize at 60 dollars, or significantly more than 60 dollars, because of that extended and engaging service and DLC content. There are people that are engaging on iOS and Facebook at much lower rates than 60 dollars, and there are people engaging with various different free-to-play models around the globe that give us no money. But here’s why that’s okay. Because there’s two fundamental factors that drive towards monetization in our business. Or in any business for that matter. One is collection, or accumulation of stuff, that gives you status. And the other is competition. And sometimes how those two things are decided is, do I have more stuff than you? So when you think about a world where we are replicating that core human dynamic of the need to collect and compete with our fellow man… Then a world where you have people coming in at various different price points… You actually enrich the lives of those that spend a lot in your ecosystem, by having a lot of people that don’t spend so much. Because it gives everyone someone to compete against and it gives everyone someone to collect and show off to. And that’s a very important part of who we are as human beings. I think that those that give us a lot of money appreciate the ability to collect and compete with those that give us little or no money. And their lives are enriched as a result of that. The people who just want to come in at a very low monetization rate appreciate the opportunity to interact with the great games we make, and be there and compete against those who monetize at a higher rate, also in this notion of collection and competition. So it’s a really cool ecosystem, and it kinda replicates what we see in the real world.
GamesBeat: Do you…think the “build your own” or “partner with somebody else” on some of these new technology platforms? There’s things out there like OnLive, looking at Gaikai… Where do you guys feel like you’re building your own versus going out and tapping somebody else?
Wilson: Certainly when we sit down and talk about it, we talk about it this way. There are competitive advantages and there are business necessities or commodities. There were a lot of people a few years ago who thought they had to build their own video player. And that that was going to be a competitive advantage for them. What we know today is that video players are a commodity, and those that invested a great deal of money in video players, many of them, it turned out to be a poor investment because there were other people that built commodities that were far cheaper, scaled far better, and delivered much better consumer experiences. So when we look at any feature or any distribution method or any of these things, we look at… What would be a competitive advantage for us? What would facilitate us to provide a better customer experience? And then what is ultimately going to be a commodity? Things like our ANT animation engine or our physics animation engine, are competitive advantages for us. They absolutely are. Things like video players, not so much. We believe our Origin platform, because it allows us to provide you a different level of access to our content, is a competitive advantage. So we invested in it. But certainly the production of the discs that we put our games on today is not. So any time we look at these things, we’re looking at competitive advantage versus business necessity and commodity. I’m not exactly sure where the OnLives and the Gaikais are going to end up just yet. But we work closely with them in the meantime while we evaluate how best to deliver great content to our consumers.
GamesBeat: On mobile, everybody talks about how it’s going to be such a big market. But the dollars aren’t necessarily rolling in and looking impressive next to the traditional consoles. For your business, when does that start changing? At some point, it is the biggest market…
Wilson: There’s a couple of things in play here. One is the notion of direct gaming and direct monetization on mobile. And you know, we have FIFA running on GREE, on mobile in Japan. And right now it’s one of the hottest monetizing mobile games in our company. So it’s doing tremendously well. Our FIFA and Madden properties, our Tiger property, those have traditionally done very well on mobile, and that continues to grow. But here’s the other nuance. It’s that… It’s not just about consuming something here and monetizing something here. What we know based on our telemetry is, gamers who engage on more than one platform monetize at a higher rate as a result of that engagement. So gamers who play console and go and interact with that console experience from their PC, they engage at a high rate. And it makes sense, because they’re spending more time within that experience, and given the opportunity to enhance and extend that experience, they do so. As we announced the iPhone app for FIFA on Monday, I think we’ve delivered another dozen iPhone companion apps over the last 12 months or so for our products… What that does is it’s an engagement mechanism.
GamesBeat: That’s the funnel at work.
Wilson: Yeah, it’s a funnel, it’s an engagement mechanism. And part of it ends up becoming a monetization property, but they may or may not monetize here. They may monetize back on the console, they may monetize on PC. But a big part of their engagement is because of this. You get an indirect growth in your business as a result of provision of service and engagement in your mobile device. So we look at it two ways. We’re going to have mobile properties that actually deliver an experience and monetize an experience right here on the phone. But at the same time, this will be your communication hub for your entire FIFA world, for your entire Madden world, and by virtue of the additional time that you spend engaging with your world and your friends in that world and your team in that world, on your mobile device, you will likely monetize at a higher rate because of that engagement, wherever you choose to. Whether it’s the phone, the console, or the PC.
GamesBeat: What were some of your reactions to the Wii U and the SmartGlass announcements?
Wilson: You saw us as part of the SmartGlass presentation with Microsoft, where they’re very excited about that. Again, we’ve been building toward this for some time, before even our console partners started to think about this multi-screen consumption method. We’ve been dealing with this over the last couple of years already. We’ve had partner applications… This just allows us to deliver an even more compelling proposition to our consumes. So we’re very excited about that. Our research and our telemetry tells us it’s exactly how gamers play, and it makes absolute sense for us. Quite frankly, it empowers us to do the kinds of things that we’ve been wanting to do for some time. With respect to Wii U, I continue to be positive about Nintendo. They’ve been a great partner for us. They’ve done some amazing things in our industry, and I think that anyone who can deliver the kind of innovation in our industry that they have, anyone that’s delivered the kind of IP to our industry that they have, is always going to be a strong player. We stood on stage last year and said that we will be supporting them. We will be doing that. You would have seen Mass Effect 3 in their kinda montage at the Nintendo press conference. We’re doing some things in sports that we haven’t talked about in detail yet, but we’re certainly moving towards that.
GamesBeat: It seems like that second tablet really affects you guys, you really want to play Madden with two tablets…
Wilson: Absolutely. Yeah, absolutely.
GamesBeat: And then… Is FIFA sort of… It’s like the flagship into digital for you guys. Do you expect the rest of EA Sports to really come in once FIFA has sort of paved the way for all things digital?
Wilson: You know, it’s interesting. FIFA is certainly the franchise that gets the most notice, because the size of the FIFA audience is so large. I mean, it’s an audience size and a revenue model that breaks out not just of our company, but the industry. It’s a top two or three game globally every year, year over year. There aren’t many other games that are up there every year. Halo comes in every now and then, a Call of Duty will come in, or a Battlefield, but FIFA is there every year. So by virtue of that it gets a lot of notice. But here’s what I’d say is, three years ago NCAA started to take your online Dynasty to PC and allow you to do things across platforms there. Tiger Woods PGA Tour, that we just launched, has a whole new monetization opportunity as part of their courses and play for free and all these types of things… Social and mobile engagement, free-to-play engagement… And Madden this year, with connected careers that you see, again, it has a whole new digital construct that’s going to drive that business. So I think FIFA gets a lot of credit because it’s just so big, and certainly it pioneers in a lot of areas, but every franchise that we have is delivering product plus service, delivering cross-platform experiences and cross-platform engagement. You’re going to start to notice that more and more as the size of that engagement audience continues to grow.