Electronic Arts' Blake Jorgensen has laid out the company's plans for future console games and given some insight into what EA expects the game market to look like through the end of this year and the beginning of next. EA has already stated it plans to invest an estimated $80M in creating next-generation titles in FY 2014 (EA's fiscal calendar starts on March 1), including new Battlefield and FIFA titles.
According to Jorgensen, EA's goal for 2014 is to minimize the sharp sales drop that usually accompanies any new console launch. This is always a tricky problem for game developers. As of last quarter, Microsoft has sold some 76 million Xbox 360s. Sony has moved 72.5 million PS3's. If 10% of PS3 and Xbox owners buy a new game, that's 14.4 million copies sold.
Now compare that to a new console launch. If Sony and Microsoft manage to sell five million new consoles each, and half
of those buyers also buy a new EA title (a huge attach rate), that's still just 2.5 million copies of each game. Since new consoles inevitably incur higher development costs than the previous generation, it means a much lower profit margin.
EA plans to navigate these waters with a leaner mix of titles and a strong commitment to sports franchises on existing Gen 3 consoles. The implication from Jorgensen is that he expects the Xbox Durango and PS4 to drop near the end of the year, after the peak window for new editions of sports games.
As for Battlefield, there's a new version of the Frostbyte engine coming. Jorgensen says:
We've always been moving Battlefield well out on the specs because of the huge PC embedded base of that business. And so moving from gen-three to a gen-four is not a huge uptick in cost.
"The other key advantage for us is we've been building those types of titles on Frostbite, which is our proprietary engine. Moving Frostbite up to gen-four was a big task, but once you've done that, you now can do that across multiple titles as long as they're using the Frostbite engine.
What exactly that means as far as shipping titles is unclear, but EA clearly intends to leverage the tremendous success of Battlefield 3
into next-generation titles. Hopefully the company won't ignore single-player possibilities -- BF3's single-player campaign was a ridiculous snooze-fest, especially compared to the multiplayer.
Asked about the used games
market, Jorgensen was somewhat evasive. While he acknowledged that EA would love to earn revenue on every single game that's sold at retail, including used ones, he also acknowledged that the used game market creates liquidity. "The fact is, that liquidity benefits us in some fashion. So if someone goes in and trades in a game, there's a good chance they're going to buy another one of our games."
That's a refreshing dose of reality. Hopefully Microsoft and Sony are listening. Locking out used sales won't improve overall game revenue, it'll simply make gamers more cautious and less willing to take risks on anything but absolute top-notch titles.