In part one of our exclusive interview with Electronic Arts' European publishing boss, Dr Jens Uwe Intat, we covered an appraisal of 2009 - both in terms of the company's performance, plus how the industry picture developed overall.
Here in part two we look ahead to what 2010 will bring, and ask whether spreading releases throughout the year will benefit the games business in the longer term and if Star Wars: The Old Republic can mount a real challenge to Blizzard's World of Warcraft.
Q: EA launched a number of high profile titles throughout 2009, rather than focusing only on the period just before Christmas - how pleased were you with the releases of titles such as The Sims 3 and EA Sports Active in terms of taking advantage of traditional schedule quiet times?
Dr Jens Uwe Intat: I think what we'll see going forwards is that all publishers, including ourselves, will spread launches more throughout the year - and we're certainly benefiting from our form of entertainment being much more established.
It's more mass market and people are more used to playing games, so the market's not just about Christmas when traditionally there was a lot of attention on videogames. These days people play all year round, so if you develop a strong title you can certainly launch it any time of the year.
The two titles you mentioned are really good examples - The Sims 3, which is a blockbuster franchise and certainly one of the strongest titles that we have in the company, launched extraordinarily well in the Summer, and did even better compared to the launch of The Sims 2 over a similar time frame... so we're certainly happy with that.
And we were also able to launch a new IP in EA Sports Active in late Spring/early Summer as opposed to a traditional Christmas launch.
Overall there are more games sold in the last quarter of the calendar year, and there probably always will be - particularly with a view to the Christmas business and all the gifting going on - but for a good, strong title there's no reason why it can't be launched in any month in the year.
The only exception I'd make to that is for Europe in August, when Southern Europe is completely closed and the rest of Europe is partially on vacation.
Q: There were some interesting moves from supermarkets in the UK with regarding to price-slashing - including for FIFA 10. This led to great sales for those games, but is that a good or bad thing for the industry in the medium term?
Dr Jens Uwe Intat: Well, obviously supermarkets in the UK have identified videogames as a traffic builder with a particularly interesting price offering - and by the way I think the UK is now the only country in Europe in which you're allowed to sell a product below your own cost of goods... that's not even legally possible in other countries.
That's certainly a challenge for the specialist retailers because they can't even try to compete on pricing - what they'll probably do going forwards is, if we look at what happened to the book industry a couple of years ago when they had a similar threat from supermarkets and other kinds of retailers, is to focus even more on the consumer relationship.
They understood their consumers better both online and offline, and were overall in a better place to service them - and I'd expect the same from the games specialists, particularly with our product moving more and more into the online space. I think they'll have a very nice role to play there.
Q: How much growth do you expect from the digital distribution space this year?
Dr Jens Uwe Intat: I'd expect the digital-delivered portion of our business to grow - it will certainly take an ever-increasing part of our overall business. But at the same time I'd still expect packaged goods to be around for a very long time. It's still the starting point of that whole journey into an individual game.
I still expect that most games will start with people buying a disc and then downloading additional content - because we've seen that in other areas there's a certain number of people that like to buy online, but there are still a lot of people that prefer to go to a store for purchasing product.
I think our product lends itself more to digital distribution than books, for example - although with e-readers they may go in that direction too. But retailers still have an important role advising people which games to purchase, and so on.
So digital, while continuing to grow, will still not be the majority of our business for quite some time.
Q: EA acquired Playfish late last year - how do you feel that characterises a shift in viewpoint for EA going forwards?
Dr Jens Uwe Intat: That characterises our overall effort to combine two things - one is that we see a greater fragmentation, and at the same time polarisation, of our market.
Let's start with polarisation - if we look at the traditional part of our business, let's just take next-gen consoles and PC, we see strong brands taking an ever-increasing share of the market. So the top ten in 2009 had a higher percentage of the total market than 2008, which in turn had a higher percentage than 2007, and so on.
Brands like FIFA and Call of Duty, which were up for the crown for best-seller in the full calendar year in Europe, have sold ever-increasing numbers. So there's polarisation in terms of big franchises, which we're trying to address with our fewer bigger hits company strategy.
At the same time we see fragmentation in that people are using more and more different devices, and more types of games when playing. Ten years ago it was the PlayStation and the GameBoy, and now you have different handheld devices from first party, different consoles, the PC, you have mobile phones and iPhone... you have so many different devices.
Meanwhile on PC you have so many different types of games, with social network gaming being one of the most recent and certainly one of the biggest trends in that space. If you combine the two then we actually expect that you'll have a huge opportunity for strong franchises across all of those platforms by leveraging an individual platform's strengths for a specific game offering.
We'll see our strong franchises, like FIFA, Need for Speed, The Sims, played on multiple platforms going forward.
Q: Mass Effect 2 is leading the EA charge in 2010 - how excited are you about the way this year is kicking off?
Dr Jens Uwe Intat: Well, the year's starting with four strong titles from us - Army of Two: 40th Day and Mass Effect 2 were in January. Next it's Dante's Inferno, and then in March we've got Battlefield: Bad Company 2.
That's four strong titles in the first quarter of the calendar year, so you bet we're confident that it's going to be a strong year overall. Certainly for ourselves.
Q: Will spreading releases out over time have a big impact on the industry, from the perspective of more consistent financial quarters, and so on?
Dr Jens Uwe Intat: That really depends a lot on the product portfolio of the individual publisher - if you're a company that has one big hit every three or four years, you'll still have a very high volatility in your revenue stream, obviously.
A company like ourselves with a pretty strong overall portfolio certainly has much less volatility, and I think together we have for quite some time actually been trying to spread those launches more across the year.
In the beginning it was borne out of necessity by titles slipping out of the Christmas quarter - so studios were targeting the Christmas quarter, but then weren't able to finish the product. Meanwhile we're actually very good at holding our launch dates internally - so on one hand product quality at EA has become better over the last couple of years, while our ability to hit the originally targeted street date becomes better and better.
So we're able to deliberately able to spread products better over the year, and I think other publishers actually do more too in order to allow people to buy more games, have more time to play them, and more money to buy them over time rather than just in two or three months of the year.
Q: EA is looking ahead to a big launch in the MMO space with Star Wars: The Old Republic - does it have a good shot of challenging World of Warcraft? That's something no other title has really managed.
Dr Jens Uwe Intat: First of all, I totally agree that World of Warcraft has been a very impressive product success in the last several years. It has a very strong and loyal community.
Secondly I agree that quite a few companies, including ourselves with Warhammer Online, have tried to dethrone the game with different approaches - all trying to have some innovation on gameplay in order to lure players away from World of Warcraft.
The reason why I'm much more confident in Star Wars being able to do that then Warhammer, for example, is that while Warhammer has been a very interesting product from a games point of view, I think the Star Wars franchise has such a huge fanbase across the planet that people being able to play that as an MMO... it will be a totally different reason for buying than just buying another massively multiplayer online game.
We do feel that the title has a very strong proposal, and we're very confident that it will be super-successful.
Q: Is the biggest challenge in maintaining the subscriber base post-launch?
Dr Jens Uwe Intat: Yes, that's correct - the reason we're actually confident that we will be able to do that is because the studio building that, BioWare, is one of the most experienced at building longer-term franchises. If you look at Dragon Age, with its DLC plan for additional content being delivered over time to keep the game fresh, there's a lot of experience in retaining a user base.
Dr Jens Uwe Intat is head of European publishing at Electronic Arts. Interview by Phil Elliott.