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Console resurgence starts with PS4, Xbox One launches - Riccitiello

Console resurgence starts with PS4, Xbox One launches - Riccitiello

Wed 30 Oct 2013 6:09pm GMT / 2:09pm EDT / 11:09am PDT
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Ex-EA CEO bullish on living room segment, dismayed with abundance of cloning in mobile

Since stepping down as Electronic Arts CEO, John Riccitiello has been looking at the game business as an investor, and for the most part, he's liked what he's seen. Speaking at the GamesBeat 2013 conference today, Riccitiello said the industry is booming like never before, and with the exception of pay-to-play MMOs, it's a great time to be involved in any segment of the industry, even the much maligned console business.

"We've got a robust free-to-play market. We've got a robust mobile market. They're both going through the roof," Riccitiello said. "But at the same time, we are seeing the early indications of a console resurgence starting two to three weeks from now."

Riccitiello is referring to the November 15 launch of the PlayStation 4, and the November 22 launch of the Xbox One, each of which he expects to outperform its predecessor. Riccitiello referenced EA's expectation that the two systems will ship 10 million systems by March, and noted that far outpaces the 7.7 million the Xbox 360 and PlayStation 3 managed in their first 14 months on sale combined. He also noted that surveys tracking gamers' playing habits found that the percentage who play their consoles every week has been pretty steady for the past three years, hovering around 30 percent.

"Now I think that's particularly stunning given we're on year eight--or nine depending on how you count it--of a console transition, when we should all expect pretty significant declines," Ricitiello said. "And we're not really seeing that."

Other signs of health included Grand Theft Auto V's 29 million units shipped, as well as recent positive financial reports from big publishers including Take-Two, Ubisoft, and EA. (Riccitiello had especially kind things to say about the management team at his previous employer, saying they have guided it through a transition to digital. It's especially impressive in light of a 2007 "burning platform" meeting the same group of execs held in New York during which they believed EA held roughly the same position in the market as THQ.)

"Right now, all the naysayers that were predicting the demise of the major console players, they're not seeing it," Riccitiello said. "In fact, they're seeing record numbers."

Riccitiello also brought up a common criticism of the console market, that smartphones and tablets are eroding its user base. He pointed to research that when surveyed about their playing habits, heavy tablet gamers have reported "a pretty strong degradation on console." Riccitiello admitted that sounds bad, but offered another way to think about it.

"Ford is having the best year ever on pick-up trucks right now," Riccitiello said. "And if you just studied people that bought Chevy trucks, you would find they're actually not using Ford trucks as much. There's a constant ebb and flow of gamers in and around things. So if you isolate around the heavy users of one [platform], they're quite consistently lesser users of something else."

Finally, Riccitiello turned his attention to the mobile market, expressing his concerns that publishers in mobile are boosting their bottom line today at the expense of building lasting lucrative brands for tomorrow.

"While I think some of the best entrepreneurs I've met are working in the game industry, there's a lot of folks pursuing me-too strategies, virtual copycats," Riccitiello said, adding, "There's blue ocean, there's red ocean, and then there's oceans that are so red that the prior six entries have already failed. Why copy that strategy?"

Riccitiello admitted to being "a little depressed by the lemmings," but stressed that there were a number of people in the field doing innovative, interesting, and different work, including Supercell, Natural Motion, Kixeye, and thatgamecompany.

"It doesn't have to be the bluest of blue oceans," Riccitiello encouraged those building new game companies. "Just a tinge of blue would be nice, a little more towards the purple maybe, as opposed to just straight copies of what's out there."

6 Comments

Rick Lopez
Illustrator, Graphic Designer

1,269 941 0.7
I never had anything against Riccitiello, but I like him more now that he is not at EA.

Posted:10 months ago

#1

Mihai Cozma
Indie Games Developer

123 34 0.3
Interesting article, I always thought that mobile has the role of attracting new audiences from the non-gaming world rather than cannibalizing established hard-core audiences like console and PC.

Posted:10 months ago

#2

Bruce Everiss
Marketing Consultant

1,692 594 0.4
It is a pity that he did not use this amazing perspicacity whilst running EA.

Posted:10 months ago

#3

Alfonso Sexto
Lead Tester

788 599 0.8
Although EA arrived quite late for the mobile market (and they are not exactly doing so hot in F2P either) That is quite true: Mobile companies (a good number of them) drop creativity for the easy cash and the cloning it's just out of the chart.

@Bruce
I could see the lack of organization while I was working in EA (that was around 2009). Maybe marketing people and the heads of studios were not telling the guy what was really happening but you know... a company that though that releasing "Need for Speed World" the same day that "Starcraft 2" was hitting the market was a good idea really have an issue when it comes to understanding proper marketing and competition...
But still, I think the guy will do way: He seems to be able to see the numbers and understand what is really happening instead of making up stuff.

Posted:10 months ago

#4

Klaus Preisinger
Freelance Writing

1,072 1,007 0.9
I would not describe EA as late. They had their early entries to f2p and mobile markets. But they never had the sticking power of their bread and butter franchises on consoles. Games were hit and miss when Steam and the PC rose, be it by releasing legacy versions of sports games and/or trying to become exclusive to their own digital distribution platform. There is also the issue of EA wanting to beat WoW when it was already painfully obvious that everybody who would consider playing something such as WoW rather kept playing WoW.

The only "big" thing emerging from a big publisher in the past years was Skylanders and the idea to combines toy sales and video games in the same way it was done with toys and TV shows 20 years ago. All the other "record" numbers came from sequels.

Mobas, Minecraft, World of Tank, Co-Op Survival worlds, Facebook and mobile games, and not to speak of all the "small" games released by independents did not come from any of the big publishers. There is an entire generation out there who was forged not by big publisher games, but by surprise hits of smaller companies. That's fundamentally different that from when the change was from SNES to PS1 and big publisher games forged our perception about this new age of 3D gaming.

PS4 and XO carry this burden of bringing back that area where only big publisher games matter. But from the looks of it, both Sony and MS will also adapt to this market the big console publishers all have trouble getting into.

Posted:10 months ago

#5

Alfonso Sexto
Lead Tester

788 599 0.8
@Klaus

I would add MMO's to that "Late" list ;)

Posted:9 months ago

#6

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