The news we saw from Electronic Arts today is glimpse at the inevitable future of the games market. The company made two very large announcements today, each pointing to a new direction for its business moving forward, but most tellingly we saw it put a foot on a new path that will see fewer packaged titles, more focus on a service-oriented business, and new ways of charging for games.
For many enthusiast or "hardcore" gamers, EA's acquisition of Playfish no doubt caused much rolling of eyes, and there are already complaints all over the Internet about it diluting its brand and turning its back on "real" gamers. In truth, the Playfish acquisition was an indication that the company's management understands that it's no longer enough to simply compete for our dollars, or to go head-to-head against it's rival Activision - now it needs to compete for our time. With so many entertainment choices available to us all, it's not enough to expect us to seek out specific content - the real winners will come to us. When it comes to online experiences, that means a greater emphasis on digital distribution, and it means that we'll see social platforms like Facebook become a more important distribution vehicle. Importantly, it will also see a shift in the way that we pay for games. As EA Interactive senior vice president and general manager Barry Cottle said today, "people play games, and people pay for games, but instead of paying upfront they'll pay along the way."
"Paying along the way" is gaining traction fast. Apple's recent move allowing for in-app purchases on the iPhone and iPod Touch has seen a rapid expansion of the "freemium" model for games on the platform. Some of these are direct ports of titles that previously appeared on Facebook and made use of the payment system, but there are plenty of new titles too. Possibly the highest profile is ngmoco's online first person shooter Eliminate which launched last week and immediately shot to the number one spot on the store's download chart. "In Eliminate you earn credits and level up when you play in matches," explained ngmoco CEO Neil Young. "Credits can be spent on weapons, new armor, items and upgrades that have level locking requirements. Players receive a certain allotment of 'charges' for free each day, but if they want to play more than this allotment, they can buy additional 'power cells' to charge their suit." The game is completely free to download from the iTunes App store, and the only content that you pay for are these power cells. "Freemium games have definitely inspired us," Young explained. "From Kart Rider, Maple Story, Epic Pet Wars (we actually own Miraphonic, the team that made Epic Pet Wars, we just announced that recently, but it has been the case since earlier in the summer) and social games. Each of these games have their strengths and weaknesses and for us it's been about trying to figure out how to build the type of games we know that gamers have come to expect, but combine them with these new payment models."
Browser based play and mobile play are certainly beginning to show signs of being the way the games industry is evolving. As Mark Spenner, the vice president of product development at EA's new browser focused business unit EA 2D said when we interviewed him about Dragon Age: Journeys, "we think the browser is the future of gaming. We are not stopping at reaching 5 million players through a boxed product. Our aspiration is to reach 100 million players through high quality, accessible games available in the browser." At around the same time, Electronic Arts CEO John Riccitiello stated in an interview that "there are probably more people enjoying games on mobile devices than all the consoles put together. That is the future."
In late
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