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Frank Gibeau: Order, Chaos and a New Golden Age of Gaming

Frank Gibeau: Order, Chaos and a New Golden Age of Gaming

Tue 04 Sep 2012 6:48am GMT / 2:48am EDT / 11:48pm PDT
Publishing

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."

12 Comments

Jeremie Sinic

43 18 0.4
"Gen 4 hardware is a huge opportunity"
Yeah, I also can't wait for the SEGA Megadrive/Genesis!

http://en.wikipedia.org/wiki/History_of_video_games

Posted:2 years ago

#1

Jeremie Sinic

43 18 0.4
"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."

It's funny how the implication is that one can't develop something players want without "free-to-play" (which I prefer to call freemium).
I believe developers can use analytics methods to track users' behavior to do just that without using a freemium model.

Posted:2 years ago

#2
I agree, Jeremy. Behavioral tracking is a result of constant connectivity, it is orthogonal to the revenue model and, in fact, is more play-oriented in models that don't require the constant driving of buying decisions.

I am pleased however to see a person high up in EA who seems excited by the chaos. Back in the 80s John Brunner identified two kinds of people-- those that see threat in chaos and those that see opportunity. He called the second "shockwave riders" (I usually call them "chaos surfers") and correctly predicted that those people would be the economic winners in the world we have now.

Edited 1 times. Last edit by Jeffrey Kesselman on 4th September 2012 5:05pm

Posted:2 years ago

#3
I keep hearing folks from big publishers say that you can't release new IP at the end of a console cycle. There may be stats that appear to show that the public hits a wall that says "no new stimulation - I'm enjoying Madden 48 too much" but it sounds like evidence bent to fit the story to me. History shows its hard for these guys to release a new IP at any time. Their companies are hugely risk averse, are obsessed with stock price, can only follow trends not set them, and almost robotically plough every cent they have into titles they know before release will make money - sequels. I'd see all these reasons as plausible before I'd accept some sort of world-wide mass-psychosis event - or "the dog ate my IP work".

Edited 1 times. Last edit by Barry Meade on 5th September 2012 2:58am

Posted:2 years ago

#4
Looking at last of Us, isnt that a current gen title?

Posted:2 years ago

#5

Brian Lewis Operations Manager, Aeria Games Europe

139 90 0.6
I think we should all be concerned that the next console generation is not going to be the savior that everyone hopes. There are many 'disruptive' elements in gaming at this time; mobile, F2P, social, digital downloads, etc. When the next generation of console appears, will it be able to survive in the environment that will exist at the time.

At this time, the market is changing to meet the demand of the consumer. Do we really think that the next generation of consoles will change the market back to what the big publishers want? I think it is more reasonable to assume that it is going to be the smaller, more nimbler publishers/developers that will do well, and the large companies will try and fail with the older methods.

Posted:2 years ago

#6

Matthew Handrahan Staff Writer, GamesIndustry.biz

125 121 1.0
@Barry: Stay tuned. I'm working on an article exploring that very subject. It's the sort of cyclical logic that publishers use all too often.

Posted:2 years ago

#7

James Berg Games User Researcher, EA Canada

184 239 1.3
Do we really think that the next generation of consoles will change the market back to what the big publishers want?
Brian, I think you're missing a key point of the article. The old market doesn't exist anymore - there's now a vast number of platforms, and gamers (consumers) can enjoy games more ways, with far more monetization models being available. Some companies will do well sticking to just releasing on Gen4, but I think those that excel will be those that release on a variety of platforms, with a variety of monetization strategies, so that we can give people the opportunity to buy what they want, where they want, how they want. Games aren't $60 boxes anymore, they're an evolving service.

As industry folks, I think we should be looking forward to that, as it opens up whole new levels for creative diversity. As a gamer, I'm thrilled.

Posted:2 years ago

#8

Edited 1 times. Last edit by kevin williams on 5th September 2012 12:50am

Posted:2 years ago

#9

Jeremie Sinic

43 18 0.4
@Brian:
There are many 'disruptive' elements in gaming at this time; mobile, F2P, social, digital downloads, etc.
I expect the coming consoles to embrace all these elements. They don't have a choice, anyway.

Here about my own experience:
Last year, I did what I would never have thought possible: I bought a gaming PC. It was the first time in my life. Of course, I have a job now, so the cost represented less to me than it would have as a student. Yet, it's telling of the fact that even as someone with a job and responsibilities, I am still willing to pay the price for high quality gaming. And, although I don't want to make a generalization out of my single case, I believe many avid gamers have already done or are planning to do the same as me.

I am overall very happy with my gaming PC, although I still think the experience is not always as straight-forward as with a console. However, the combination of relatively good hardware (i7, GTX580) and the Steam platform mean the next gen consoles have better be awesome to make me open my wallet again.

Posted:2 years ago

#10

James Prendergast Research Chemist

735 432 0.6
@ Jeremie: Gen 4 comment made me laugh - was going to post something similar :)

I think EA are in a good position going forward. However, I think they need to start debuting lots of new, cheap-to-produce, IP on cheaper formats that is deep enough to support a more expansive game on the more expensive formats. Maybe they're already doing this (I haven't seen much indication of it) and this will help in guaranteeing the success of a "proven" new IP on a console or the PC for example. Start small and end up big. It would minimise risk to a certain extent and help with marketing - plus you get to whittle out the unliked or underperforming titles earlier on and for less money.

Of course, one could also make the argument that there's little consumer cross-over between the formats and that someone who buys, say, Angry Birds on iOS isn't going to go out and buy an Angry Birds Zelda clone on the PS4. I think that's true to an extent but there are opportunities there.

Posted:2 years ago

#11

Lewis Brown Snr Sourcer/Recruiter, Electronic Arts

202 56 0.3
I find it interesting the amount of folks who think the console is dead, for playing in the living room on my big LED TV you can beat a console for plug and play gaming. Its why all my non industry friends keep asking me about the next Xbox/Ps not Freemium, IPTV etc... for them they want a console, easy online MP gaming and a controller. Not to say they dont play on mobile/Ios etc...or may even play the odd freemium but ultimately they want that console experience they have been now enjoying for many years.

I think we all forget that many of the buying public arent up with the latest tech and its takes a certain amount for things to become the norm. For them buying a console mpluggin it in and just getting on with gaming is half the appeal, hell why do you think so many people love apple!

Still is going to be an interesting few years :-)

Posted:2 years ago

#12

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