#125: Electronic boutique
Would you buy a used videogame company from this man?
Electronic Arts has been shopping around for an acquisition or merger for several years, according to a Puck report. Sources told the website that EA’s CEO, gleaming automaton Andrew Wilson, has held talks with Apple, Amazon, Disney and Comcast, among others, about a potential deal. Wilson’s preference is, apparently and not particularly surprisingly, for a merger that would see him retained as CEO of the new entity. Talks with Comcast — which would see NBCUniversal spun out from the parent company and merged with EA, with Wilson in charge — progressed the furthest, but fell apart a few months ago over the structure and price of the deal. Wilson, the report claims, marches on undeterred.
This news is not particularly surprising given the tidal wave of consolidation that has washed over the game industry in recent years, and this year in particular. No doubt Microsoft’s proposed acquisition of Activision Blizzard has affected EA’s thinking; as I wrote when the deal was announced, it immediately made the rest of the industry’s traditional big players look weirdly small-time. I can certainly imagine Wilson now being under pressure to come up with some kind of response. A few years ago, Kotaku reported on the cancellation of Amy Hennig’s ambitious singleplayer Star Wars game, codenamed Ragtag. In one meeting with EA’s higher-ups, an executive said: “FIFA Ultimate Team makes a billion dollars a year. Where’s your version of that?” I can imagine Wilson being faced with a similar line of questioning from investors today. Microsoft is buying Activision for seventy billion dollars. Where’s your version of that?
I also wonder to what extent the loss of the FIFA licence is shaping EA’s thinking. As I wrote a couple of weeks back, EA is probably right to think that its own brand is big enough to be able to go it alone without the FIFA name. But it certainly introduces a layer of risk to EA’s business that didn’t exist a few months ago. These days Ultimate Team brings in around $1.5bn a year (though EA did not reveal figures in its most recent annual results) — more than a fifth of EA’s entire revenue. As unlikely as it seems, in the short term anyway, for FIFA to speedily partner up with a company with the resources and ambition to dethrone the freshly minted EA Sports FC, there is nonetheless the looming threat of a bona fide challenger in a field where EA’s dominance has never really been threatened.
I’m not surprised that EA is open to an acquisition. But nor am I surprised to hear that, despite entering some clearly quite advanced discussions with some pretty big companies, Wilson is yet to get anything over the line. For all its struggles, and its miserable culture, there’s much to covet at Activision Blizzard. COD is still one of the biggest names in shooters, Blizzard’s software output is widely revered, and King is a colossally successful player in the mobile space. EA has Ultimate Team, sure. But take FIFA away from EA, and what are you left with? I mean, yes, $5bn or so in annual revenue, I get that. But as a company, and potential acquisition target, it hardly sets the pulse racing.
I gather Madden is terrifically popular, though I haven’t played it since the Mega Drive and on this side of the pond it causes barely a ripple. EA has the NHL and UFC licences but those are clearly far more niche. The Sims lost its cultural cachet long ago. Battlefield has clearly had its day, the series struggling to find relevance in an era where its USP — big maps, lots of players — has been appropriated and greatly improved by battle royales (battles royale? We really need a consensus on this). Apex Legends is going great guns (sorry), bringing in $2bn in revenue in three years. But Genshin Impact makes a billion dollars every six months, and Fortnite made more than $9bn in its first two years. Given Respawn’s evident talent, EA’s supposed muscle, and the fact that it launched at the peak of the BR hype wave, there’s an argument that Apex could and should have done much better. The game has only this month arrived on mobile, years after PUBG and Fortnite showed how much money was to be made there. That says a lot, I think, and not much of it is good.
EA’s track record under Wilson’s stewardship does not make for flattering reading. Respawn may be the jewel in the publisher’s crown from a creative standpoint, but has the studio thrived because of its ownership, or in spite of it? Sure, the gamble to cancel Titanfall 3 and turn it into Apex paid off, but I’m not sure that proves much beyond the fact that sometimes tyranny produces results. The acquisition of PopCap, the thinking person’s favourite casual-game developer and a relentless hitmaker until EA came along, has been a disaster. EA secured the Star Wars IP — surely the greatest licence to print money a videogame company could ever hope for — and absolutely shat the bed with it.
On it goes. An attempt to ‘do a Ubisoft’ and get all global studios working on Frostbite was a catastrophe. Origin, EA’s bid to challenge Steam’s dominance of PC download sales, trundles on invisibly; its EA Play subscription service was so uncompelling it was folded into Game Pass. I’m not surprised EA’s executive leadership are so obsessed with FUT and its ilk, because it’s really all the company has going for it. Were it not for Ultimate Team, you fancy Wilson would have been out on his arse years ago. And if I were sitting across the negotiation table from him, I’d be querying his insistence on staying in the big chair after an acquisition or merger completes. What, exactly, does he bring to the role?
There is precious little innovation at EA, no real creative leadership; I do not see a publisher working at the bleeding edge of things, pushing at the limits of what the medium can achieve. It’s just a bunch of cash cows, and the awkward thing about cows is that you can only milk them for so long and that one day, without fail, they die. So no, I’m not surprised Wilson is shopping his company around. I think he can see the grass is thinning, and the sun disappearing over the horizon.
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Friday’s edition on achievement design certainly struck a chord with you all, and I was particularly heartened to see Actual Discussions going on in the comments. Respectful, intelligent people talking nicely amongst themselves… on the internet? Never thought I’d see the day. Perhaps I should think again about a subscriber-exclusive Discord. Never saw much mileage in it until now, but it turns out you lot are quite lovely.
“For me the pinnacle of the artform was Crackdown on the 360,” Paul reckons. “It could have been completely aimless, with its barebones ‘story’ and seemingly endless collectables, but the achievements were tremendous pointers for other stuff to do. Body Juggler, Airtime, Shot Putter — all things I might have done accidentally, but having that specific challenge on a list made the time fly faster (and further) than the Los Muertos corpses I was tossing off apartment buildings.” It says a lot, I think, that most people’s favourite achievements seem to hail from when the idea was still new and developers were perhaps thinking a bit more creatively about them, or from before achievements were even invented (another reader suggested Tie Fighter, for instance). Perhaps we’re all just getting old. Not too old to snigger at Paul’s use of ‘tossing off’ though, eh. There are some things one never grows out of.
“Conceptually I love the idea of achievements,” says Ben. “I think they speak to some weird corner of my lizard brain that loves stats, tracking things and ticking things off lists. That's undoubtedly evidenced by my Gamerscore and trophy count, but these days they rarely do anything for me. I still find myself trying to tick off as many as I can, but where once I would push myself and grind through games to hit completion I only ever do it where I'm really enjoying myself these days. Though those ‘Kill 10,000 things’ type achievements could always do one.”
“For me the problems with them are the points attached and the fact that they’re mandated by platform holders,” James offers. “Take away those and you are left with challenges which can teach you new things about a game at the developer’s choice. I learnt to play GoldenEye in a completely different way when working out how to finish X level on Y difficulty in under Z time. The points and drive to make numbers go up can feed unhealthy behaviours, and the mandation leads to lame tick-box exercises.”
Thanks again to all of you who got in touch. Hit reply or hammer the button below and let the festivities continue.
Ed Fries, one of the founding fathers of Xbox, is a bit bothered by Game Pass, fearing it could do for the game business what Spotify has done to the music industry. “These markets are more fragile than people realise,” he said. “I saw the game industry destroy itself in the early ‘80s. I saw the educational software business destroy itself in the mid-’90s… they literally destroyed a multibillion dollar market in a few years. So Game Pass makes me nervous. As a customer, I love it. I love Spotify as a customer: I have all the songs I’d ever want… it’s a great deal. But it isn’t necessarily great for the industry.” I know a few industry pals fear similar, though as Hit Points chum Chris Dring points out in VGC’s piece on this, game subscription services are a long way away from Spotify’s scale, and the economics are very different as well. But I do think all involved — platform holders, development partners, and customers — would be well advised to tread carefully. Most of us didn’t realise the problems with Spotify’s model until it was too late.
Take-Two’s acquisition of Zynga has completed. CEO Strauss Zelnick says the deal will “take our portfolio to another level of creativity, innovation, and quality.” Not three adjectives I’ve historically associated with Zynga but Zelnick, as the only gaming CEO that I reckon could definitely beat me up, can say what he likes. (Phil Spencer is a contender but probably too nice to go through with it. Andrew Wilson could, of course, incinerate me with his wrist lasers.)
PS1 and PSP games have begun popping up on the PlayStation Store in Malaysia, where nu-PS Plus is about to launch. Games offer upscaling, a rewind feature, quicksaves and video filters, and in a pleasant turn of events can be bought separately — they’re not bound to the new subscription. Even better: one of them is Ridge Racers 2. Rejoice!
There you go! I hope you all had lovely weekends. I spent most of mine gardening, and then looking for a gardener so I don’t have to do it myself anymore. Hedges, my word. Truly the devil’s work. Have a grand couple of days, and I’ll see you on Wednesday.