Electronic Arts: Greed Is Not the Problem

Editor’s Note: This article was originally published on The Escapist, by Shamus Young, the guy behind Twenty Sided, DM of the Rings, Stolen Pixels, Shamus Plays, and Spoiler Warning.

I don’t have a problem with companies making money. I don’t think “greed” is a bad thing. I don’t have a problem with people getting rich. What I do have a problem with is wasted potential and disgraceful incompetence. What’s important is not how much you’re making, but how well you’re using the resources at your disposal.

Ten years ago Valve Software was a medium-sized development house. They had one successful game (Half-Life) and a collection of expansions for it. They didn’t have massive cash reserves by today’s standards and they didn’t have any direct influence over the market. They were, in dollar terms, probably less successful than Mojang is today. But Valve anticipated a coming shift in the market (the move to digital distribution) and they figured out how to meet that need.

A decade later, they are now a multi-billion dollar behemoth. They own Half-Life, Team Fortress, DOTA 2, Portal, and Left 4 Dead. Every one of those franchises is critically acclaimed, commercially successful, and instantly recognizable, even to the point of spawning memes outside the gaming community. Valve controls an enormous majority of PC digital sales, holding a market share that looks like Microsoft Windows in the late 90′s. They’re branching out into selling software and they’re launching their own console. Their sales are so successful that people joke about how Steam sales make them poor by getting them to buy games they never knew they wanted and spend more than they ever intended.

Valve has done a lot of things to make a lot of money. You could even accuse them of being “greedy”. I mean, why launch Steam when they already had a successful and profitable game? Why sell indie games when they were already doing well selling AAA titles? Why launch a console when Steam is doing so well? Valve is purportedly sitting on a mountain of cash, and their customers love them. Nobody complains about how Valve is “greedy” for having sales, for selling indie games, or for making a console. Instead, people are lining up to give them cash.

Greed is not the problem.

What has EA accomplished in that same timeframe? They were already a massive company ten years ago. They already had a mountain of cash. They already had a vast storehouse of popular IP. They already had tremendous control over the market. And in the last decade they’ve squandered most of it.

Using IP

Intellectual Property is the most valuable asset a videogame company can have. Talent can come and go. Machines and software are regularly replaced. But creating and maintaining titles and brands is how you make your money.

In the last ten years Valve has backed the creation and growth of iconic, commercially successful IP. Half-Life, Team Fortress, DOTA 2, Portal, and Left 4 Dead.

Instead of creating new, successful IP, EA is notorious for taking things which are already successful and demolishing them in a spectacular conflagration of offensive marketing, terrible gameplay, and joy-killing technology failures. Even with their vast wealth, they can’t seem to make a good game even when using an already successful franchise.

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12 Comments on Electronic Arts: Greed Is Not the Problem

R.J.

On February 18, 2014 at 5:51 pm

I pretty much agree with everything here. EA has it in its head that people are simply hostile to size, when it is what they’ve done with that size that is the real issue. I couldn’t care less if a game I enjoy is made by an indie team with a shoe-string budget or is a AAA title with a massive budget. What I care about is if the people making the game have a clue about the opinions of their customers. I don’t see Valve responding to criticism by saying, “La la la, all is well. I can’t hear you.” At the very least, you’d expect the negative impact that this has had on the company’s stock to get them to change, but it still hasn’t happened.

Dan Miller

On February 18, 2014 at 8:27 pm

This is a garbage hit piece. Comparing EA and Valve is nonsensical, two completely different companies with very different roles in the game development and publishing process. Valve develops one game per year, at most. EA is a mega corporation and publishes dozens of games per year.

“If I was a shareholder, I’d be out for blood.”

EA stock has more than doubled since 2012. So… Yeah…

Why did gamefront cross publish this garbage?

Tanami

On February 19, 2014 at 1:47 am

Very good read. I remember EA from back in the commodore 64 days, Back then they where respected by the gaming community. Now after all these years I avoid EA as much as possible. I did support SSX 2012 as I am a big SSX fan and Todd Batty the creative director was actively involved in the SSX community, He and his team really had the right attitude towards their potential costumers, Actively listening to the community. And was for me back then a sign that EA was maybe cleaning up their act. Sadly that was not the case, as clearly stated in this article. And I guess Batty got the boot after disappointing sales. Another IP lost, probably.
What I don’t understand is when a company gets voted worst company of the year twice, and seeing how EA just screws their customers, why are we gamers not totally boycotting EA? Don’t buy any of their products for a year (maybe two), and see if EA turns around. But no, people keep buying their unfinished products, and EA just laughs at us in our face from the comfort of their massive leather chairs… Or at least, so it seams. Say hello to my little friend…

Death Ray

On February 19, 2014 at 3:52 am

I loathe EA and everything it stands for, same as Activision. But I sort of agree with Dan Miller in that I don’t believe the comparison between EA and Valve is a fair one. It’s kind of like comparing One Direction to Portishead. One is a production line of bland crap (one album every 12 months, released on a tight schedule just as EA releases most of its games) that takes no effort to write or record but sounds inoffensive enough for the radio and has an endless supply of easily-pleased customers on hand for the foreseeable future. The other is a group that has taken two decades to release the same number of albums, none of which have sold all that well (if you consider ‘only’ spending a single week each at a peak position of number two in the UK album charts a disappointment, as the likes of Cowell would since they only care about numbers) but each one of them is considered a masterpiece. It’s clearly not a credible comparison. Are there any companies out there that release a similar volume of games per year as EA but do so on a tighter budget and with a superior overall quality? Not that I can think of, although Ubisoft generally at least releases ‘good’ games and seems to be more willing to take chances than EA or Activision. Obviously Square and Capcom have fallen off a cliff as well in terms of customer feedback. So the main problem is surely that these companies are taking on too big a workload with not enough resources to produce consistent quality, whereas Rockstar or Valve make fewer games at any given time and are willing to go past deadlines to make sure the game’s finished. It’s not like EA games are fundamentally bad, because they make some of the best games out there, and there’s far more variety in EA games than in Activision’s “all COD, all the time” range of identikit toss. But the fluctuations in quality, coupled with the complete disregard for what the average customer actually values in a product (not everyone sees microtransactions as a given) AND an obsession with deadlines that often causes developers to either rush their products more than they should need to or even release them unfinished (both of which were the case with ME3, for example) means that even though EA’s games are well above the industry average, they’re still nowhere near what we should be expecting for the price we pay and for the amount of money the company makes. There’s no excuse for it. And what’s worse is that they’ve butchered so many developers that actually had it right (e.g. BioWare and Origin) but were either forced to massively compromise in order to appease EA or, in BioWare’s case, had inept and talentless hacks put in charge to make sure they were guided towards what EA wanted as opposed to what would benefit the games.

quicktooth

On February 19, 2014 at 4:48 am

Greed is always a problem, and the author is completely wrong about what greed is. It isn’t getting your just rewards for vision, guts, love, and buisness drive (which Valve does all the time, and which we all respect). It’s “greedily” seeking more when there’s no need to, and specifically when you do so ‘no matter the cost’. And “no matter the cost” is all EA does these days. They are literally buying and ruining companies and their games by releasing rubbish cash-ins that people hate; they buy good will, then profit off a sale or two before people get wise that what they loved is ruined. Greed is a sin, a vice. It’s not a long term route to success, nor a buisness strategy. Greed is a soulless thing, a result of animal instinct. In it’s grip, “leaders” destroy people and things in exchange for some percieved short term gain (EA has stayed in the buisness because LOTS of people are willing to be bought out by them). But having a good company and loving what you do brings profits, forever (not to mention respecting those you do it for- think Valve)! And you make people happy! What possible advantage, then, does greed have? Why pick it? The secret is that it HAS no advantage. It NEVER had. It’s soulless instinct, no more, no less. That’s why we call it a vice, or a sin. Because it makes things *worse* not better, and it does so in a short sighted way that destroys the very people and work that make the money in the first place. The author is quite wrong that greed is not the problem. It’s THE problem. We only begrudge EA their piles of cash because they greedily built them over the bones of the games and developers we love, who they destroyed for a quick buck. See?

Ron Whitaker

On February 19, 2014 at 5:42 am

@Dan Miller: While EA’s stock may have doubled since 2012, it’s still half what it was in 2008 (49.66 in Sept. 2008). As mentioned in the article, it rides an up and down cycle around major game releases. 6 months ago, the stock was exactly where it is now, but it’s spiked in between those times (Up due to BF4′s release, then down on the news of the game’s problems), so it’s looking like it may be cycling back down. Let’s also not forget that in August of 2012, EA’s stock bottomed out entirely, dropping to nearly $10 a share. Doubling from there isn’t exactly a record performance, and if you’ve been a stockholder all that time, you’ve lost a fair bit of value..

Dan Miller

On February 19, 2014 at 9:45 am

@ Ron

One could certainly examine EA stock more closely and draw real conclusions (though looking to 2008 is patently unfair, as that was the worst year in history for the market). A discussion of how EA’s stock performance is tied to game news would be fascinating, and it’s much more complex than being simply cyclical, which would mean anybody could easily make money trading that cycle. Which would then eliminate that possibility because everybody would do it, which is why it doesn’t exist (What is the efficient capital markets hypothesis, Trebek!).

My point is that the author of this article did not do that, and instead made an unsupported assertion that because a few choice EA published games have garnered negative press, the stockholders must be furious. I was a stock holder from 2012 through last month. It was one of my best stocks. The gains will pay for quite a few games. Even the most conservative analysts have EA as a hold today, with a bunch at buy or strong buy. The world is simply not as the author states. This is just one inaccuracy in the article, which his bias pervades.

Comparing a private company that develops 1 game a year with the biggest publisher in the world is STILL ridiculous. This article is not up to the standards of Gamefront.

Jimenez

On February 19, 2014 at 12:24 pm

Bye bye Star Wars games.

Evernessince

On February 19, 2014 at 12:53 pm

@Dan

It’s safe to say that at least a decent portion of EA stockholders are quite mad. Just look at the stockholder lawsuit that stemmed from battlefield 4.

Another thing is, I don’t see much incentive to invest in EA anymore. If the company culture is so damaged in that it poisons all of their franchises, it speaks to the ineptitude of the company. EA does need new management. To that effect I don’t know how you can issue a strong buy on a company that has effectively killed a large portion of it’s portfolio within the last few years. Value speaking, they lost at least 3 billion just from IP damage. Mass effect, dragon age, and sim city are all pretty much unrecoverable. I’m being quite generous in the above value as well, it’s probably much greater as each of the above IPs were licenses to print money.

T. Jetfuel

On February 20, 2014 at 1:31 am

The problem is not that EA have “tarnished their IP” and thus are not doing a good job in generating maximum revenue. That is, unless you are an EA bean counter, in which case that is indeed a major problem. But for the people who actually want to enjoy games (weird concept, right?), the problem is that EA are not focusing on providing a good experience, but are instead baiting their gouging hook on the promise of stuff people used to enjoy (see Dungeon Keeper) and then, in some cases, literally applying pain (frustrating enforced waiting etc.) in order to pry open the money vein. This is their innovative new business model. John Riccitiello may be gone, but his dream of hitting shooter players with a bill for a refill when they run out of ammo most assuredly survived his reign of error.

Frankly it’s disturbing how totally the corporate viewpoint with its jargon has taken over the gaming media, not to mention the “gaming community” itself. Can’t find a comment section anywhere without half the posts going into the necessity of the “Monetization of the Intellectual Property by Downloadable Content and Microtransactions”, however regrettable that may be. That this doesn’t seem like esoteric accountant babble, but is in fact how we are all now used to discussing games should be cause for alarm for anyone with an interest in games as an expressive medium deeper than, say, toothpaste.

Also, greed isn’t good. Saying so doesn’t constitute a piercing insight that sees clean through the pious hypocrisies that govern our conventional morals, or anything of the sort. It’s just validating the laziest rationalizations of the Jamie Dimons of the world.

Mike

On February 20, 2014 at 4:20 am

T Jetfuel once again humiliates a GameFront writer for a poorly conceived article, just as he did to Phil Owen. Perhaps Jetfuel should be given an article of his own, you could certainly do a lot worse.

quicktooth

On February 20, 2014 at 4:40 am

@T. Jetfuel – It actually surprises me to hear someone else who wishes to have fun and entertaining games. It’s like games buyers these days think that they’re stockholders and presidents. They’re totally uninterested in actually enjoying their games! Or being entertained! Either that, or they’ve invested their personal identities so heavily into “brands” (just as marketing people desire) that they desperately resort to any excuse to prop up their chosen company or game- just to believe that they themselves have any self worth. That this exact situation is a marketing person’s dream is a horrible testament to the power of soulless advertising, and how far gamers have been led away from actually experiencing and enjoying games. Drinking a can of sugar water doesn’t make you attractive to people, and you’re still a good person whether a games company is good after all or not. I wish people cried out in outrage when a game is just a soulless addictive money spinner, rather than (you know) a thing intended to make us happy. Glad to hear there’s another gamer, apart from me! Down with accounting!