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EA no longer sees new IP as priority, says former BioWare producer

Why? Ethan Levy says Simpsons: Tapped Out and games like it are the reason

Electronic Arts continues to be a company in transition. The publisher has clearly put a focus on digital, while console releases become less frequent. As EA CEO John Riccitiello said on the firm's last earnings call, "We've reached an end of an era." EA's transition has led to a slowdown in new IP creation, and there's a reason for that, according to Ethan Levy, a former BioWare San Francisco producer who worked on Dragon Age Legends.

On his Quarter Spiral blog, Levy noted, "EA's stated strategy is fewer, bigger brands. Of the many new IPs developed for this generation, only Army of Two, Dead Space and Dragon Age continue to see new versions. As far as I can tell from publicly facing information, creating innovative, new IPs just isn't a priority for the organization."

Levy believes EA's success on iOS with hugely popular brands like The Simpsons means that the company can get a much bigger return on investment with a much, much lower risk compared to creating new IP for consoles.

"Big brands + big marketing budget + high production values = $$$. This is the EA formula. They may have been late to the mobile & tablet freemium party, but now that they are here they will outcompete the Dragon Vales and Tiny Monsters of the world," Levy continued. "This formula may have finally run its course in the core space, where 80+ rated Lord of the Rings, James Bond and Godfather games have all fallen out of favor with gamers' wallets."

"But as Tapped Out proves, the players who enjoy the games produced by this formula have simply moved to another platform. EA's digital future has less to do with big, risky new IPs like Mirror's Edge or Brutal Legend and much more to do with the huge return on investment proven by The Simpsons' $20.7 million breakout success."

That $20.7 million estimate is not an official EA figure, but is in fact a pretty solid guesstimate from Levy, who said that Tapped Out has generated $29.6 million in sales for EA (which becomes about $20.7 million after Apple takes its cut). He arrived at this number by reverse engineering Supercell's iOS success in a model he explains in detail right here.

Levy noted that Tapped Out's budget was probably a "mere sliver compared to the cost of the critical (and probable commercial) failure, Medal of Honor: Warfighter."

Indeed, if a company can spend a few million instead of tens of millions of dollars, and gain double-digit millions on that minor investment, making that model the foundation of the business going forward makes perfect sense.

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Latest comments (12)

Morville O'Driscoll Blogger & Critic 8 years ago
To be fair, this is back to the 80s/90s, where quality mattered less than the name of the brand. Oh, sure, there were some decent licensed products, but for the most part, why bother creating your own back-story, characters and random flange, when you could just buy the name Cobra, slap some custom graphics on a generic side-scolling platform-shooter, use existing marketing material and be rolling in the cash. Who needs quality, ey?

Ah, well, if this industry really is cyclical - and it seems it is - things'll roll around again in anything from 3-10 years.

Edit: Though let's bear in mind that licenses don't cost nothing. How much did EA spend on The Simpsons name?

Edited 2 times. Last edit by Morville O'Driscoll on 8th November 2012 9:24pm

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Hmmm, if it is cyclical, I guess we await the mid cycle of the next gen consoles for core games to come into brilliant fruition again...
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Patrick Frost QA Project Monitor 8 years ago
Very interesting comparisons that Levy draws. I agree with him about EA's methods behind reducing their risk. Seems funny that instead of changing their formula they just take it somewhere else!
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Show all comments (12)
Hugo Trepanier Senior Game Designer, Ludia8 years ago
Levy forgot to include Mass Effect in the list of new EA franchises still being supported, unless he knows something we don't. I think that one alone has drawn more fandom and debate than Ao2 and Dead Space combined.

Tapped Out's success does not guarantee a bullet-proof future for Simpsons-themed games. The "Simpsons Game" console title from 2007 was more or less a failure as I recall, with a Metascore of 71. In fact licensed IPs have a dubious history of success and failures in many cases. THQ is making the same bet with their upcoming South Park game, wonder how that will turn out for them... James Bond and LotR both had very respectable outings in the past, more proof that they don't last forever.

It is very sad to see EA shift their priority. A few years ago they were saying the opposite and were keen on developing new IPs. I think they had the start of something fresh with Mirror's Edge but they lacked vision to bring it to the next level. This could have been their modern or near future Assassin's Creed.

They will have to come up with something new when their current franchises start to dwindle. Medal of Honor, anyone?
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James Berg Games User Researcher 8 years ago
There's a major point missing here - the stable, commercial successes are what allows riskier projects to be taken on. That's true here at EA, and I think it's true almost everywhere else. If all your projects are big risks, eventually you're going to hit too long a string of failures, and go out of business. If you don't take those risks, the market will change and leave you behind.
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John Riccitiello Investor 8 years ago
This is John Riccitiello. I don't make a habit of rebutting an article in the comments, but in this case, i could not resist. I am not sure where Mr. Levy gets his information on EA and our plans for new IP, but I can assure you he is dead wrong. We do love our biggest franchises and are pleased to see them continue to grow. But, we are also all inspired by the challenge and opportunity to create new IP and have much in the works, well beyond what is mentioned in the article.

James -- at the right time, we'd be happy to talk to you directly about how we see new IP. I always enjoy your articles and think there might be a reason for one more on this subject.
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Daniel Chenoweth Freelance Editor, Reviewer, Writer 8 years ago
Seems narrow-sighted of the author to notice the end of an era, and not consider that the upcoming new console generation as a significant factor of that.

Clearly a major part of EA's perceived lack brand diversity in their upcoming slate at present is because they're not announcing next-gen games until there's a platform to announce them on other that PC.

Also, in addition to Mass Effect, he also missed SimCity and, Command & Conquer. The notion of licensed titles finding more success on mobile platforms is an interesting observation, but the rest of the conclusions seem way off-base.
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James Brightman Editor, North America, GamesIndustry.biz8 years ago
Thanks for commenting! I will happily have a discussion with you about this. I'll drop a note to your PR team, and we'll go from there.
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Ethan Levy Monetization Design Consultant @FamousAspect 8 years ago
Mr. Riccitiello,

First of all, thank you for the respectful reply to the article. I hope to respond with equal respect not only because I believe in and support your vision for the future of EA while I worked there and since I left, but also because I think there is a bit of echo chamber effect at play.

For your first comment, this summary left out a critical quote from my original blog post. On September 4th, Frank Gibeau (who I also respect greatly) told Games Industry International “right now, we’re working on 3 to 5 new IPs for the next gen.” In the blog post, I contrast this statement of 3 to 5 new IPs with a count up of the 35 new IPs that EA has developed or published during the current console generation, which I also list at the bottom of the original blog post.

The point of the piece, more than anything, was to help shed light on how your focus on "fewer, bigger brands", your digital strategy and transition is a success. As you say, creating new IP is a big challenge. Taking existing IP and adopting to new platforms and business models is also a big challenge. As the recent quarterly report points out, The Simpsons Tapped Out is a huge success. It is a highlight of your digital transition.

As the recent EA Quarterly Earnings slides say, EA has the best collection of brands in the industry. As Simpsons Tapped out proves, EA has learned how to use those brands effectively on new platforms. "Where brands and platforms meet -> EA succeeds". I simply wrote an analysis piece using publicly facing information and quotes to show how your strategy is succeeding. Unfortunately, in headlines and summaries I think it makes me come off as a disgruntled former employee, which I most definitely am not.

So, just to reiterate, I have the utmost respect for you, Mr. Gibeau and the rest of the EA leadership team as they have navigated the company through an interesting and challenging time in the industry's history. I enjoyed my time working at EA and BioWare, and learned and grew more during that time than at any other time in my career as a result of the opportunities I was given to lead a team attempting to fulfill the promise of the digital transition. I think that, under your direction, EA has taken risks big and small, and led the industry with passion and vision in a time of great disruption and change.

Sincerely and with respect,
Ethan Levy
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John Riccitiello Investor 8 years ago
All good Ethan. Appreciate the thorough response. I did not read your complete blog, and i probably should have.

As for fewer / bigger, i think we both agree that this approach makes sense. And, as for new IP, it is something that i personally champion.... and i could not resist adding a few thoughts to the discussion.

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Hugo Trepanier Senior Game Designer, Ludia8 years ago
Well, that's a relief. More in line with what I remember from my time at EA. It would have been disappointing to see EA go the other way... so here's hoping we have yet a chance to see Mirror's Edge 2 :)
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Steve Peterson Marketing Consultant 8 years ago
It certainly makes sense to me to launch new IP much more quickly, with much less risk and a lower budget, to see if it attracts an audience. That success could always be scaled up to AAA status on a console, once you have enough reason to believe a massive budget (and the time it takes) is a reasonable bet. This is really an inevitable consequence of higher budgets and lower average sales for console titles, which has rendered the moderately successful game an endangered species.
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