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EA: TV ad spend to be reduced "substantially"

Tue 25 May 2010 8:44am GMT / 4:44am EDT / 1:44am PDT
Publishing

Publishing giant looks to invest more money in game quality and online marketing

Electronic Arts is to cut its television advertising budget "substantially" as it refocuses its investment partly into online marketing, but mostly into making "good games".

That's according to senior VP and head of European publishing, Dr Jens Uwe Intat, speaking in a panel session at the IBIS/LBS Videogames Investment Network last night.

Responding to a question from the audience at the London Business School event about whether marketing costs would spiral in the future, he was clear in his view.

"I think they will actually not," he said. "Unfortunately for a lot of television companies it's likely that, as we spent most of our [marketing] money on television advertising, we'll reduce that substantially going forward.

"Part of it will go online, but most of it will actually be invested into making good games - despite the fact that a lot of marketing money is spent on a Call of Duty or FIFA, when we look at our research, most people actually buy a game because of a referral from a friend.

"So the product quality at the end of the day is still the dominant criterion," he added.

He went on to explain that the approach wasn't just relevant for EA's core games market, but also true for the business of recent $300-400 million acquisition Playfish.

"I think that's also true when I look at the other end of the spectrum and I talk to Kristian Segerstrale from Playfish - they talk about faster development cycles over time and obviously not taking two years to come up with a game," he explained. "They sit down every Monday to look at the past week's performance, and change the game features.

"But at the end of the day most of the money will still go into the game's development, and the smallest part should go into the advertising."

In general television ad campaigns have formed the backbone of the main publishers' marketing spend on major titles in the past - and this will be more bad news for TV companies, set against a backdrop of steadily decreasing ad revenue for them.

Meanwhile videogames are finding themselves as a marketing platform for non-endemic brands, with EA's The Sims 3 recently targeted by Renault to raise awareness of its Twizy zero-emissions vehicle.

12 Comments

Lucas Seuren Copy Editor, Only Network

26 2 0.1
Well that's one of the best ideas I heard in a long time. I doubt they'll sell less games and it'll be good for the financial situation after losing more than a billion dollars in two years time.
I expect that if the quality of the games gets better, more people will actually buy it. EA may still be a hated company by some people who got stuck in the 90's, but most people just want to play a fun game. The better the quality, the more referrals.

Posted:4 years ago

#1

Stephen McCarthy Studying Games Technology, Kingston University

205 0 0.0
I do not know if hate them now or not
online pass idea: I hate,
the making "good games" bit: been hoping to see that in a lot of game makers but let down.

Posted:4 years ago

#2

Stephen Northcott Senior Consulting Engineer

76 0 0.0
In other news EA said it would be putting a PayPal Donate button on its website. ;)

Posted:4 years ago

#3

Finlay Thewlis Studying Game Design & Production Management, University of Abertay Dundee

26 0 0.0
get daoc re-launched then!

Posted:4 years ago

#4

Bruce Everiss Marketing Consultant

1,692 594 0.4
About 5 years too late.

Posted:4 years ago

#5

Kyle Rowley Senior Gameplay Designer, Remedy Entertainment

26 17 0.7
@ Bruce: Social Media wasn't really a viable format to place large amounts of marketing spend 5 years ago. Companies seem to spend more money on social media based advertising than they do press, TV and cinema combined now I believe.

Posted:4 years ago

#6

J B Technical Artist, EA Sports

8 0 0.0
Good news, let the products sell themselves!

Posted:4 years ago

#7

Simon Arnet

54 3 0.1
I think a good review is some of the best marketing a game can have! This is an excellent idea, make a better product and get better reviews because of it. Superb EA, well done.

@Bruce Everiss, In my opinion its never to late for a good change, and now is better than never.

Posted:4 years ago

#8

Shane Sweeney Academic

401 418 1.0
EA is such a strange case. Historically they have been known to butcher game series being the giant ogre owning roughly a 20% market share, with the CEO claiming its minor in comparison to Nike in the shoe industry.

Fast forward a few years, a massive turn around occurs starting with a very public apology. Then a promise of delivering better game. They start giving grants to Indy developers. They start offering the best publishing deals in the industry. Annual updates on sporting franchises are starting to be rolled out as patched updates instead of annual releases. They basically do everything I would of personally of wanted them to do.

Then suddenly there original innovative games like Dead Space and Mirrors Edge dont sell as much as they would like, and Activision steps up to consistently act ogreish with rediclous quote after quote, and destroying relationships with many talented third parties such as Double Fine, Harmonix and Infinity Ward. In short, they do everything what EA traditionally became famous for, and all the things I would personally frown upon.

But now Activision have the largest market share, and EA have been losing money and position. Obviously treating this as a Good versus Bad issue is reductionist. Obviously I dont *really* think its mandatory, that you need to be a giant, cut throat, arrogant, aggressive bully to make money, but I do wish the world wouldn't present so many examples that make me doubt that assumption.

Posted:4 years ago

#9

Alfonso Sexto Lead Tester, Ubisoft Germany

837 671 0.8
As they said; friend's reference and Internet are the main source, specially when we talk about hardcore games; people knows the existence of a game months before it goes "live" on a T.V. commercial.

Posted:4 years ago

#10

Terence Gage Freelance writer

1,288 120 0.1
@ Shane

It's true that EA are much more of a 'people's company' than they were a few years back, and while they've had a tough few years and suffered losses like most other publishers (I think Activision and maybe Ubisoft are the only big publishers who haven't made significant losses in the past couple of years), I think they are poised for a stellar couple of years, with some big EA Partners games due for release (APB, Crysis 2), as well as a growing portfolio of in-house new and rejuvinated franchises (BioWare stuff, Dead Space, Need For Speed, Skate, Medal of Honor), as well as Star Wars: The Old Republic, which will probably be the biggest MMO since World of Warcraft, and may be the only game that can challenge the Blizzard titan. Not to mention their online-centric business models (including excellent games like BF1943) and their acquisition of Playfish.

Anyway, what I am trying to say in an overly-wordy fashion is that the 'new' EA's philosophy of quality over sheer quantity has really come to fruition, and I think it's going to pay dividends for them in the near future.

Now all we need is Mirror's Edge 2 :)

Posted:4 years ago

#11

Jack Loftus Contributing Editor, Gizmodo

95 0 0.0
Great news! So this means they no longer have a need for the anti-consumer Project Ten Dollar, yes?

Posted:4 years ago

#12

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