Peter Moore - Part One

The EA Sports president talks FIFA 10, digital distribution, and the problem of pre-owned videogame sales

At a UK press event last week to officially unveil EA Sports' FIFA 10 title, sat down with president Peter Moore to catch up on the label's progress since we last spoke at E3 last year.

Among the hot topics in this first part of a two-part piece, Moore talks about FIFA 10 and the challenge of satisfying consumer expectation, the ongoing annual franchise vs patch debate, and why the onus is on publishers to work out a solution to the increasing problem of pre-owned videogame sales.

Q: You've just been showing off FIFA 10 for the first time - last year's edition seems to have been a pretty important line in the sand for that franchise. Is that something you were pleased with?

Peter Moore: You're always pleased but you're never satisfied - we heard Dave [Rutter] in his presentation say that, okay, it's a great game now, but let's put that to one side. What can we do next?

Because no game is perfect, and a game as complex as we deliver always has things you look and feel you can do better. One of the things Dave talked a lot about was the feedback we get from our community, the "love this, love this, love this, boy - I wish we could do this".

It's that last part we listen to, and the team takes a lot of feedback. Football's a great game, but it's very fluid and there's a lot of physics we have to put in there. So you're going to see at least a dozen things you'll be able to point to in FIFA 10 and say it's a huge improvement on FIFA 09. That's important - we've got to give everybody a reason to buy the new game. That's the challenge we face every year as a label with our portfolio, our franchises - I've absolutely got to make you buy them every single year.

You need reasons for that, and the FIFA team is very good at doing that - they're very self-deprecating in that while it's an award-winning game, they're never satisfied. The moment you're satisfied, that's then the trouble starts.

Q: There are decisions to make around franchises, some for the consumer and some for business - at what point do you think it would benefit the consumer more to put out a downloadable annual patch and data update at a lower price point, rather than a full-priced boxed product?

Peter Moore: Well, we're starting to look at different types of downloadable content which enhances the games. We've actually done a few things, three instances in the last few months where we've delivered exactly that, not updates, but actually full game experiences.

Most recently there was an NCAA Basketball update on Xbox Live - I don't think it was available in Europe - but that delivered a full game for USD 15, with 64 teams, with the bracket structure in place for March Madness.

We delivered a full game which was NHL 3 vs 3 Arcade which people loved - that never appeared on a disc.

And then recently FIFA Ultimate Team for FIFA fans, which has been a runaway success and allows us to bring a whole new gameplay mechanic to FIFA at a time when maybe interest in the game starts to tail off a little bit - whoosh, you bring it back in again.

So we have different business models, ways to bring in consumers who just aren't going to pay USD 60 for a disc - the Asian market has taught us an important lesson, because the physical media business just doesn't really resonate there, so we've got what we call mid-session games.

I'll give you a free experience - I'm not even going to charge you GBP 20 - I'm going to give it to you free and hope I can upsell you to new revenue opportunities. There's a business model that says the majority of people won't buy anything and play for free, but if you do your job right and do some things that are interesting and compulsive, and people will buy micro-transactions.

Then you get to a different model that's an ARPU model - average revenue per user - that's nothing to do with buying a disc at a store.

So to answer your question, we're looking at all of these things. Right now we have no plans to change our core business model, but like any company does you maintain your core and then start figuring out what the consumer wants.

Some things work well, and some things don't work as well for us. We've had some disappointments this year, but at the same time we're really learning a lot about online, and it's uncharted territory for everybody out there.

The one thing you don't want to do... for example, if I adopted your model and if I didn't buy FIFA 09, I'd have to go out and buy it [as a starting point], and retail would have to keep it stocked for a long time because how could I get my update for FIFA 10? It's not as easy as it sounds, and the downloads are not patches - these things are full gigabytes, with the amount of new data we put into games... "Patch" is an interesting word, these are not patches.

Bottom line is that we're constantly getting feedback from consumers, what's working online, how can we deliver games in a new and innovative way? And we'll continue to do that.

Q: You told me last year that EA Sports was a company that believes "ultimately every consumer will go online".

Peter Moore: Yeah, and we think we're at 65 per cent adoption rate online. It's lagging a little bit because the Wii doesn't have a compulsive online experience yet, but I think they're going to get there. I think ultimately it's the same with the computer - who do you know that owns a computer that doesn't go online? I don't think in the world of consoles that we're going to be too far from looking at that in the future.

When I was president of Sega nine years ago there was a phrase I coined with online through dial-up modem - "Taking gamers where gaming is going" - and people laughed, because nobody connected. Maybe tens of thousands of people. But I said then, there'll come a time when if you ship an offline game, it's going to feel very weird. I don't think there are many offline games now - in other words a game that doesn't have some kind of offline element to it.

Q: There are compelling reasons for publishers to include online components now that aren't to do with revenues from downloadable content - also last year we talked about retailers and digital distribution, and you said that canny retailers would become part of that scene. Instead we've seen retailers move further towards the pre-owned market, rather than digital distribution, so do you still believe retail can play a part in digital distribution?

Peter Moore: Yeah, I mean when I was at Microsoft we shipped Xbox Live cards, which you'll find in all retailers, which allows them to play in that subscription-based market - particularly for a lot of consumers that don't have credit cards. I'm assuming those are still very good sellers.

Go look at the music model, look at the number of iTunes cards sold at retail -

Q: But those aren't games, are they? They're almost footprint-less in terms of the shelf space they take up.

Peter Moore: That's exactly right, and that's why there's good margin on that stuff. There's no stealing them because they're not live inventory, and as you say there's no footprint to them. They're almost at the cash register, right there.

My point was that retailers will find a way of playing in that - whether it's making margin on cards for online distribution, which is what Asian retailers do very, very well, or figuring out their own services, I don't know.

Q: But retail will have to change its shape, because the rows of shelves and boxes picture fundamentally isn't the future of videogames, is it?

Peter Moore: Well, we can look at the music industry and take our cues from that. I think retail has done well - I watch with interest what retailers in the US do with music. The music industry now is about touring and merchandise, and what have you. They get a little piece of the music itself, but the music becomes an entrance to other business models. When was the last time you buy a CD?

Look at retailers now who sell DVDs, exclusive DVDs that are of concerts, and you see retailers that are promoting concert tours. And you still see them doing iTunes cards, or Zune cards as it was when I was a Microsoft guy. I think they find ways of playing.

All of a sudden music came to life again through a very strange way - through videogames, in Guitar Hero and Rock Band. They brought music back to life again for retailers, and they're selling music when they're selling Guitar Hero and Rock Band software.

Q: It's not cause and effect in terms of when it came about, but pre-owned is becoming a crucial part of the retailer business. GAME recently reported that 18 per cent of sales came from pre-owned, and without that they'd struggle.

Peter Moore: It's their prerogative, and the same with the retailers in the United States. It's their prerogative to do that. What we have to do as publishers is find ways of taking advantage of that. How do we monetise that second-sale consumer? I think online is the key to that, and finding ways of innovating with that consumer, because they still log-on, and we get access to them, so how do we sell them stuff?

Q: If people want to continue to go online with their games, they won't trade them in, will they?

Peter Moore: You like to think you make compulsive game experiences and people won't want to trade them in, but that's their perfect right. Again, our point as publisher would be that the business exists, it's a multi-billion dollar business - our job would be to figure out how we treat them as any other customer, how we monetise that consumer.

Peter Moore is president of EA Sports. Interview by Phil Elliott.

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