Frank Gibeau: Order, Chaos and a New Golden Age of Gaming
The president of EA Labels on the industry's tumultuous transitional period
Frank Gibeau wants to talk about chaos, though not the chaos threatening to breach EA's partitioned corner of Gamescom's cavernous halls.
As the president of EA's four labels (EA Sports, EA Games, Maxis and Bioware) Gibeau presides over the most traditional parts of an organisation that has spent much of the last 5 years attempting to break from tradition entirely. A series of hugely expensive acquisitions in the mobile, social and casual markets - specifically Jamdat, Playfish and PopCap - helped to drive the company's digital revenue past its first billion and towards a second, giving EA the justifiable reputation of being the industry's most progressive major publisher.
These deals, and the decision to launch its own digital retail site in Origin, were pre-emptive strikes against the chaos that Gibeau is so keen to discuss. New platforms, new business models, new retail and distribution channels, new forms of instantaneous communication; the last half-decade in the games industry has been the best and the worst of times, and proven methods of staying on the right side of that split seem increasingly difficult to find. Major disruptions like the launch of the iPhone and the emergence of Facebook as a lucrative gaming destination are in the distant past, relatively speaking, and yet for many developers the passage of time has only made the route to success more difficult to find.
"From this chaos, you're going to get a new order, a new approach, that's going to be a very vibrant time for games. A golden age is coming"
For Gibeau, this is simply an aspect of the transitional phase that EA has been fully engaged with for several years; a process that, if the decline in EA's stock price is any barometer, has been more protracted and severe than the company initially thought.
"I've been in the industry for a fair bit of time, and looking at the chaos that people perceive is happening out there right now, frankly, from my perspective, the underlying opportunities are so huge that we're about to embark on a whole new golden age of gaming," Gibeau says.
"Ten years ago, when Gamescom started, we measured the size of the industry at 200 million gamers; now, we're talking about a billion gamers, and we're heading towards two. That's a huge positive. Then when you look at the number of devices that are game enabled: EA now publishes across 17 different platforms; back in 2002 it was 3 or 4.
"From this chaos, you're going to get a new order, a new approach, that's going to be a very vibrant time for games... Yes, there's chaos right now, but a golden age is coming."
Order from chaos; a mission statement that the industry's most established companies would do well to adopt. And yet for all EA's progressive strategy and risk-taking, the company's booth at Gamescom tells an altogether more familiar story: more Dead Space, more Need For Speed, more FIFA, more Crysis, more Medal of Honor, and, in a genuinely surprising announcement, a third outing for Army of Two.
A Gamescom booth can't be expected to tell the full story of a company as large and diverse as EA, and many of the games here show great promise, but it's difficult to square this parade of sequels with all the forward-thinking rhetoric. Sequels are, of course, what we're conditioned to expect at this stage in the console cycle, and this is evidently one tradition that EA is perfectly happy to honour.
"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"
"If you look at what we're putting into Need For Speed: Most Wanted we're taking a lot of risks there, the same thing with Battlefield - you have to admit that, from Bad Company 2 to Battlefield 3, there's a huge amount of change there.
"But, if you look at the market dynamics, 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. We have to shepherd the time that our developers spend, as well as the money that we spend on development in a positive way, so we're focused on bringing out a bunch of new IPs around the next generation of hardware."
The impending arrival of another generation of hardware is the industry's worst kept secret. Indeed, that's true of any incoming hardware generation, but the length of this console cycle has magnified the issue: the rumour mill usually grinds into gear four years into a five year cycle, and, true to form, the first mention of new console launches surfaced at least 18 months ago. By the time the new hardware is in our grasp, we'll have been treated to around three years of unsubstantiated rumour.
One thing is certain: companies like EA are waiting for those new consoles with all the patience they can muster, and several key publishers have been quite open about how much they believe this elongated cycle has hurt their business.
"When you launch a new IP it needs to do something really, really remarkable, and that's easier to do when you have a new set of technology that gives you novel capabilities," Gibeau says. "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.
"Gen 4 hardware is a huge opportunity, and it's going to lead to a huge growth spurt for the industry... The only thing that could really displace that is really high-end tablets and IPTV, and IPTV is further out than just a couple of years. I mean, the capabilities are there, but it's going to be a really long time before it breaks through. But those are the only two places I see that kind of risk occurring, and the good news for EA is that we're going to publish across all of them. We might ultimately find that to our advantage."
"I've seen the machines that we're building games for, and they're spectacular... It's going to lead to a huge growth spurt for the industry"
Nevertheless, Gibeau concedes that this console generation has changed the pattern of new hardware releases, with 10-year cycles likely to be "the new norm" from now on. Should that be the case, this rigid approach to launching new IP will surely need to be revised, if not abolished entirely. Chaos looms for the AAA blockbuster market, too, even if most publishers are clinging to the comforts of familiarity.
For EA, though, there are more pressing concerns than how long the next console generation will last. Less than two weeks before the start of Gamescom, it was announced that The Old Republic would go free-to-play this year. A Bioware developed Star Wars MMO failing to sustain more than 1 million paying subscribers is as clear an illustration of "chaos" as you could wish for, but Gibeau maintains that the possibility of a micro-transaction business model was part of The Old Republic's roadmap even before it launched.
"We actually thought through how it would work for a very long time," he says. "We just felt that we wanted to bring [the transition] forward. All the headwinds that we're experiencing on the premium subscription model right now go away when you pivot to free-to-play. If you've played LOTRO, I think that gives a sense of where we're going with the design. But it's rock solid, and when we roll it out in November it'll become clear. And it won't be done in November; it'll be in continuous development, much like every MMO."
And EA's hopes for The Old Republic mirror its hopes for the free-to-play model as a whole. Whatever else makes it through the games industry's chaotic transitional period, Gibeau is confident that free-to-play will be a significant part of its future. We have seen only the first flushes of the model's success, and, with innovation from games like The Old Republic, Gibeau believes it will become ubiquitous.
"From my perspective, I don't see free-to-play slowing down because it works on so many levels," he says. "Developers can go as wide or as deep as they want, and reach out to new audiences. They can build more of what people are actually consuming, as opposed to having unpopular features and modes that we spent development time on."
"I actually think that free-to-play is going to be the dominant business model in this industry before the end of the decade. It will be the model that most people are used to."