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EA: Tablet adoption to climb at never-seen-before rates

EA: Tablet adoption to climb at never-seen-before rates

Thu 25 Oct 2012 5:33pm GMT / 1:33pm EDT / 10:33am PDT
MobileSocial

EA head of mobile and social Nick Earl says division is looking to red-hot tablet market for growth while social market faces headwinds

It's not difficult to figure out which part of the job Electronic Arts' head of global mobile and social studios Nick Earl is more excited about. Speaking with GamesIndustry International yesterday, Earl said that while social gaming is "re-correcting" after possibly peaking, the tablet market is on the verge of a tipping point.

"We're seeing in a short period of time four new tablets come to the marketplace," Earl said, referring to the new Apple iPad, Google Nexus, and Microsoft Surface offerings. "The marketplace is already incredibly hot, and this just feels like it's going into a new gear, and the adoption is going to continue to climb at never-seen-before rates."

While Earl said that the growth in tablets will have to level out at some point, he said that only 4-5 percent of the US population owned a tablet in 2010, leaving "a lot of head room" for the market to expand. And given the tablets' increasing abilities to push impressive graphics, complex games, and connected experiences (all of which are points EA focuses on), Earl said the publisher was well positioned to take advantage of that growth.

"When I look at social driving the business for EA, clearly there are headwinds there..."

Nick Earl

However, Earl's tone changes somewhat when the health of social gaming in light of Zynga's recent struggles comes up.

"When I look at social driving the business for EA, clearly there are headwinds there," Earl said. "These are things I noticed 6-8 months ago, so we started to pivot toward the opportunity of tablets and smartphones at that point. And I'm really glad we did that because I think we've been able to pour our efforts into games that really flourished… Social games, I think they've reached a bit of maturation in their market and need to recorrect. We still have bets there, but the way I look at it is there's just such an enormous opportunity on the mobile side of things, with tablets and smartphones, that's where we're really trying to double down."

Earl pointed to The Simpsons: Tapped Out as one such bet that has paid off. And while Earl said there weren't a ton of risks in tablet market on the macro level (every individual game carries its own risks), he did acknowledge that the problem of discovery in the market is getting worse.

"There's only one number one spot, and there are more and more apps being launched every day," Earl said. "It can be pretty challenging for developers to figure out how to work their way through that amount of content."

One method that some developers use to try and make the charts is paid app installs. While Earl said EA has the benefit of leaning on strong relationships with app store first parties and direct communication with its existing customer base, he didn't see paid installs as a problem for the tablet market as a whole.

"Yeah, that's a part of the business, and some employ it more than others, but it can be pretty overbearing from a cost perspective and change the economics of whether an app is successful or not," Earl said, adding, "There are plenty of games that rose through the charts with literally no paid acquisition. One that comes to mind is Draw Something, which got high installs just on word of mouth. So if you put something innovative out there and enough people catch onto it, it takes on a life of its own."

10 Comments

Bruce Everiss Marketing Consultant

1,692 594 0.4
It is funny how many senior people in the industry agree with me.

The boss of Mozilla was on R4 this morning. He says currently there are 2.5 billion people connected to the interwebs and that this is just about to double to 5 billion, mostly with mobile devices. Now I don't care if only half these people play games with their devices, it still dwarfs anything that console can possibly imagine achieving.

As for social, the problem isn't the games. It is the social mechanisms that those games use. There are Facebook, Steam, Xbox Live, Apple Game Centre and other social enabling ecosystems but they are all at their very beginning and evolving quickly. As they get better so will social gaming.

And the ownership advantages of 7 inch tablets are just fantastic. Get a Nexus 7 if you haven't already. I can browse my private and work emails in the pub, step outside and use Google Sky Map, pretend I am a helicopter and fly along the streets in Lower Manhattan with Google Earth, navigate anywhere, keep on top of the news and the social networks and have access to the sum of all human knowledge. All in the perfect portable package. You could sit on a beach and run a business with this thing. I don't doubt that some people already are.

Posted:A year ago

#1

Abhimanyu Kumar Associate Product Manager, Zynga

6 9 1.5
Hi Bruce! I had a small question about your claim there. Do you think it is the social mechanisms that are creating the problem, or do you think it is the similarity in style/genre of social games that is making the whole social gaming experience very drab?

Do you think a re-boom of the social gaming market will depend on re-inventing the wheel, for example by overlaying new social game mechanics onto a Farmville style game? Or would this re-boom depend more on the style/genre/quality of game content that is provided social gamers across the world?

Posted:A year ago

#2

Bruce Everiss Marketing Consultant

1,692 594 0.4
@Abhimanyu Kumar

I think it is the overall player experience of the game and the social environment. It has been with MMOs for ages.
WoW, Guild Wars etc combine both elements very well. Mobile devices must learn from this.

Posted:A year ago

#3

Tim Carter Designer - Writer - Producer

570 315 0.6
(Except among... you know... core gamers.)

Posted:A year ago

#4

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,270 2,439 1.1
What are you guys going to do when the adoption rate stalls because of over saturated and a market so flooded that discovery is nigh impossible?

Posted:A year ago

#5

Carlos Bordeu Game Designer / Studio Co-Founder, ACE Team

65 90 1.4
I have the same doubt than Jim. I actually wonder if this isn't already happening. We often hear the success stories of a handful of mobile/social game developers. But what is going on with all the rest? If a big console developer goes down, we all get the news story and then some say that 'consoles are dying'. But how many mobile/social game devs are not being able to survive already? Who has the real numbers comparing the successful cases vs those that are not?

I'm no expert, but I wouldn't be a surprised if data was recollected and it pointed to the direction that succeeding in the mobile/social ecosystem is even harder than in the "traditional" games industry...

Posted:A year ago

#6

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,270 2,439 1.1
Well stated, Carlos.

There is also the business climate of big guy buys the little guy that seems to happen almost every single day. I thought this whole thing was about making it possible for the little guys to thrive. Soon there will be very few little guys left able to compete against the Gree's and Zynga's and Rovio's.

It reminds me of the Wii effect. Explodes on the market and then quickly fizzles out. Or the dotcom bubble. Like a fire that eats up its oxygen supply too fast. There's just a lot of capital being thrown around out there. And it's great for the local economies and all that but not everyone will become a Gree meaning a lot of capital will end up backing the wrong horses.

I wish the growth were a little slower, more organic.

Posted:A year ago

#7

Hugo Trepanier Senior UI Designer, Hibernum

156 144 0.9
Popular Comment
We'll be back after this short break with more Ask Bruce, stay tuned.

It amazes me how the emergence of a new market automatically means the end of another for some people. We've been saying this about the death of newspapers and radio for decades, and more recently television and books. People thought cinema theaters would die when television was first introduced, etc. One thing that can't enter some people's mind is co-existence. Just because there are millions or billions to make in a certain area of business does not automatically invalidate everything else. The bottom line is that technology keeps evolving and we're now reaching a new phase not possible 10 years ago but it will certainly not stop there, and very few of us can reliably claim to predict the future with accuracy.

Posted:A year ago

#8

Bruce Everiss Marketing Consultant

1,692 594 0.4
@Hugo Trepanier,

Having a go at me does not make you right.

Lots of newspapers have closed down. Many more are making big losses. The Guardian is about to give up its print edition.

The problem with the console business model is that it costs about a billion dollars to bring one to market. Then it has to reach the critical mass of a large enough user base to be worth writing games for. It is very easy not to reach this critical mass, even in a vibrant market, as Sega will tell you.

The fact is that people have only so much gaming time. Mobile has brought in huge numbers of new gamers. But all the research says that console gamers are switching to mobile for part or all of their gaming time. Hence the downwards sales figures for console games since 2008, with a recent falling off the cliff. Hence all the very many consoles sitting, gathering dust, under TVs. Current generation consoles are not being used anywhere near as much as they were. They have become niche.

Mobile is winning over console for several reasons.
1) The device is with the user 24/7.
2) The app store business model is infinitely better in every way to high street retail.
3) Free To Play is a price that customers are willing to pay for entertainment. Far better than $60 for just one game.
4) Sheer market size. Very many mobile games get to over a million downloads. Angry Birds to a thousand million. 1.3 million new Android devices are activated every single day. It doesn't matter if half the owners don't play games with them, because the other half do. This dwarfs the active console gaming market. Mobiles are truly mass market ubiquitous.

It is rumoured that the upcoming Apple TV will have an app store and FTP. So Nintendo/Microsoft/Sony must do the same just to stay in the game. But will the consumers be willing to shell out for a new gaming machine when they have one for free (it comes with the phone contract) in their pocket?

I really cannot see the market sustaining 4 console brands, getting them all to critical mass. Microsoft's subscription model is their best chance going forwards, buy the service and get the hardware free, just as people are accustomed to doing with mobile phones.

Compare and contrast that with where mobile is going. According to the current edition of the Economist there are 0.9 billion smartphones in use now, rising to 3.1 billion in 2017. Mobile broadband subscriptions (so including tablets and other devices) are currently 1.4 billion, rising to 5.0 billion in 2017. So our market is going to triple in 5 years. No wonder over 300,000 people in America are already employed in the App industry.

Posted:A year ago

#9

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,270 2,439 1.1
Popular Comment
I'll counterpoint this one nearly line for line.
-----------------------------------

Lots of newspapers have closed down. Many more are making big losses. The Guardian is about to give up its print edition.

Newspaper readership started declining long before online ever came about.
-------------------------------

The problem with the console business model is that it costs about a billion dollars to bring one to market. Then it has to reach the critical mass of a large enough user base to be worth writing games for. It is very easy not to reach this critical mass, even in a vibrant market, as Sega will tell you.

While true, what does that have to do with their "impending doom"? So long as they establish a market for both consumers and developers, what does it matter to them how much it cost tbe big 3 to get there?
--------------------------------------

The fact is that people have only so much gaming time.

True, but the same can be said of TV, movies or any other form of entertainment. Do you think a movie enthusiast will switch to watching 30 minute sitcoms just because they only have so much movie watching time?
---------------------------------

Mobile has brought in huge numbers of new gamers.

Agreed. But the key word in that statement is "NEW" gamers. As in people that are not already gaming on consoles.
----------------------------------

But all the research says that console gamers are switching to mobile for part or all of their gaming time.

Really? Why not poll all the major gaming news/review sites and ask which devices they game on most? I bet you'll find most still game on consoles. Is the poll biased? Indeed it is. But so too are most of those polls that ask mobile phones gamers where they do most of their gaming.
------------------------------------

Hence the downwards sales figures for console games since 2008.

I suppose that has nothing to do with the Wii and DS hitting their peak years in 2008? Never mind the fact that 2009 was still far higher than any other year besides 2008. Or that 2010 was back on part with 2007? Or that the very small drop in 2011 included 2 console transitions and the beginnings of a 3rd? Can't have anything to do with this being the normal patter of a console generation, right?
--------------------------------------

with a recent falling off the cliff.

On the contrary, 2012 is actually doing on par of what one would expect at this point in a very long console generation. Falling off an unexpected cliff is one thing, expected sales reduction at the end of a console generation is quite another.
--------------------------------------

Hence all the very many consoles sitting, gathering dust, under TVs. Current generation consoles are not being used anywhere near as much as they were.

This might be the first time I've heard someone say consoles are gathering dust that include more than just the Wii. Do you honestly think the average CoD player or Mario gamer or Halo player has relegated their console to closet status so they can put their gaming energies onto their phone?
----------------------------------------

They have become niche.

You know, maybe if the market dropped to one console maker I could agree with you. But all 3 are still in it and with the largest combined sales generation of all time: 462 million total home and portable consoles. That's one hell of a niche.
------------------------------------

It is rumoured that the upcoming Apple TV will have an app store and FTP. So Nintendo/Microsoft/Sony must do the same just to stay in the game. But will the consumers be willing to shell out for a new gaming machine when they have one for free (it comes with the phone contract) in their pocket?

Why yes, yes they would. And if pre-order indications are anything to go by, the Wii U could smash launch sales records if supply were there for it. Besides, where else do you get the CoD expereince? Mario, Zelda, Halo, Battlefield and hundreds of other IPs? Pn the PC? Some, sure just as always. But not on mobile. Those gamers still want the console expereince and mobile doesn't offer that.

The console experience on mobile is like going to China Town and saying you've been to China.
-------------------------------------------

I really cannot see the market sustaining 4 console brands.

Why not? It's supported 3 home consoles, 2 portable consoles, PC, browser, phones, etc...for years. You think the market is just going to suddenly stop support 5 of those segments and put all that money and time and support into mobile?
----------------------------------

Mobile broadband subscriptions (so including tablets and other devices) are currently 1.4 billion, rising to 5.0 billion in 2017.

5 billion subscriptions on a planet that will have about 7.6 billion people? Yep, that sounds sustainable.

Posted:A year ago

#10

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