Good News and Bad: CNBC Interviews EA CEO John Riticiello
It’s impossible to overstate just how much the business side of the games industry affects the nature and the feel of the games that we actually play, day in and day out. With that in mind, I’ve got mixed feelings about recent comments made by (possibly embattled) EA CEO John Riccitiello. On the one hand, since I’m primarily a PC gamer, this sounds like good news: “Just five years ago people said that the PC game business was in a radical state of decline because NPD said it was down 10 percent, 20 percent, 30 percent, year-in year-out. The fastest growing platform for video games today is the PC”.
Then the other shoe drops: “But it’s growing through subscriptions, through micro-transactions and through downloads.” Sure, if you like PC games, PC growth is good — it means more investment and interest in that side of the industry. Gamers, however, should be wary of changing business models that enrich people like Riccitiello through Day-1 DLC and other new-fangled, anti-consumer tactics — what’s good for massive publishers like EA is not necessarily good for the people who play the games they publish.
The CEO and his interviewer discuss EA’s move from a “packaged goods business to a digital business,” which Riccitiello himself refigures as a move from a “product business to a service business.” Citing FIFA as an example, he explains how in past years, the spike in player activity after launch dried up within a couple months. Not so with FIFA 12 — EA’s constant updates and challenges have kept players engaged. “We’re adding content every week,” Riticiello explains, adding a crucial aside: “by the way, we’re driving revenue every week on top of it.”
He then floats this analogy: EA, apparently, is adapting “the culture of building something like a Broadway play where you go on every night, instead of a canned television performance that’s once and done.” On Broadway, of course, the audience changes every night — EA is hoping that they can charge people over and over again for the same seat. As always, profit is the prime motive: “All of our businesses are going from ‘all the revenue all at once’ to an ongoing 12-month service business, which is a different way of performing and providing entertainment to the consumers. It’s a more lucrative way.”
If, like me, you prefer buying games to “12-month services,” these statements should strike you as very disturbing. If EA has decided that they can make more money by soaking their customers for small amounts of money over long periods of time, they’re going to keep doing it, and you can rest assured that other publishers will follow suit.