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Forums - Sales - EA CEO: We should have bet on the Wii

HappySqurriel said:

On a side note, my questions weren't there to imply "HD console's can not be profitable" but were serious questions that someone should ask the CEO of a major corporation ...

The fact is he is legally obligated to maximize the profits of his company and that means (regardless of whether you like it or not) if it would be more profitable for EA to make 4 small games for the Wii than to produce Madden for the HD Consoles he is supposed to make the 4 small Wii games. There is a certain ammount of freedom he is given to focus on long term profits over shorter term profits, but he should be able to explain his motivations in an intelligent manner.

Poor choice of HD games; EA is contractually obligated to make Madden for all consoles per EA's exclusivity on the NFL license.  If he wants to make any version, he has to make all versions.  Hence, even Gamecube got Madden

Now, if you were to replace Madden with something like Mirror's edge, or something, it would be a decent argument.



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DMeisterJ said:
Since we're turning this into a 'profits' argument; Wouldn't it make more sense for EA (or any company for that matter) to make a casual game, rather than a hardcore game for the Wii? I mean if Game Party, Carnival games, or Mario and Sonic are any indication, a game doesn't have to be quality to sell on the Wii. Why not make a game that costs a lot less than a "hardcore" game, and sell millions of units? I mean, if a hardcore game and a casual game sell the same amount of units, the Casual game would still be more profitable, as it would obviously cost less to make.

Also, the thread title is sensationalizing. He didn't say "We should have bet on the Wii", nor was it implied. I know you didn't quote him, but by putting the colon after "EA CEO", you make it look like he said those exact words.

But he does say that "there's a second and third place that is meaningful, against which we can build a profitable business. That's a good and positive thing.” And "that, for the first time in history, the second and third placed consoles were still ‘meaningful’."

So basically, he's saying that they did put too much stock into the HD consoles, but they are still able to generate profits for them (As we can see in their fiscal reports), and obviously, they won't be stopping support for these two gaming consoles.

These aren't bad questions to ask, but the answers are more obvious than you think. To begin with, you're treating the "casual" market as a limitless goldmine, when in reality there's a finite amount of demand for those types of games. Granted, it's still an underserved market at the moment, but making nothing but Game Party will not pay off in the long run, since you'll be canabillizing your own sales and running into increased competition from other developers, who are likewise seeking to satiate the "new" market before others do. Put another way, this would be like asking why Hollywood makes comedies, when dramas and action movies are where the big bucks are (Note: not a perfect analogy by any means). That said, I'm confident we'll see a higher share of "casual" games in the near future.

As for the title, it's copy and pasted. The blame lies with the editor, not FishyJoe.

And I really challenge your last assertion that EA is profiting heavily from the HD consoles. When the 360 debuted, their profits dropped. As they made more and more HD games, their profits continued to decline, even as their revenue increased. Last year, they posted a loss.



HappySqurriel said:

On a side note, my questions weren't there to imply "HD console's can not be profitable" but were serious questions that someone should ask the CEO of a major corporation ...

The fact is he is legally obligated to maximize the profits of his company and that means (regardless of whether you like it or not) if it would be more profitable for EA to make 4 small games for the Wii than to produce Madden for the HD Consoles he is supposed to make the 4 small Wii games. There is a certain ammount of freedom he is given to focus on long term profits over shorter term profits, but he should be able to explain his motivations in an intelligent manner.

 

 First off they have to make madden for every console. Now that that is finished.

Canceling most of your HD games will piss people off. Specially their high budget ones. They can lower the ammount to put into wii, but in no way should they flood the wii with their crap.



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Let's hope that they put some quality games on the Wii instead of just using it to milk money with shovelware and use the cash for quality games on PS360.



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Bingoo said:
HappySqurriel said:

On a side note, my questions weren't there to imply "HD console's can not be profitable" but were serious questions that someone should ask the CEO of a major corporation ...

The fact is he is legally obligated to maximize the profits of his company and that means (regardless of whether you like it or not) if it would be more profitable for EA to make 4 small games for the Wii than to produce Madden for the HD Consoles he is supposed to make the 4 small Wii games. There is a certain ammount of freedom he is given to focus on long term profits over shorter term profits, but he should be able to explain his motivations in an intelligent manner.

 

 First off they have to make madden for every console. Now that that is finished.

Canceling most of your HD games will piss people off. Specially their high budget ones. They can lower the ammount to put into wii, but in no way should they flood the wii with their crap.

If your option is between profitability and "pissing people off", which one are you going to take as the head of a corporation that has a legal duty to his shareholders to maximize value?

I'm certainly not arguing that they should cancel all of their HD efforts, but let's not sit here and suggest that heads of corporations should employ message board logic when making business decisions:

EA Prez: well, if we cancel these three games and shift those resources into Wii software we'll be profitable next quarter, but we're reallly going to piss off that Xbox 360 message board so maybe that's not such a good idea.

Shareholders: you're fucking fired...oh, and we're suing you, too.




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it's all about oportunity cost

yes, profits can be made on the ps3/360 but if developers find larger returns on the wii and limited resources....well game over HD consoles. and with the wii outselling the 360/ps3 combined ya'll better be conserned.



Finally one third party that take seriously the Wii.



Well it's not surprising. Look at our pages of games that have sold over 500,000 units and what developer seems to be the most abundant. Sega and EA. What product from EA? The sports games. FIFA 08, Tiger Woods 08 and 07, and Madden 08. Also got The Simpsons Game, Smartypants, MySims, Need For Speed: Prostreet, ect. Alot of games on Wii from EA have gone gold. And I know what your thinking... but they have sold better on the other platforms. And aside from those exclusives ones yea that's very true. Aside from Tiger Woods 08 other platforms have been the top seller. But look at it from EA's point of view. The sheer amount of time and money put into those Wii versions were so little that I swear when they sold 100k they were already making a profit.

There's no telling how much EA has made off these Wii games going gold and platinum considering those things. Developers like EA are starting to see how little of a risk there is to develop for the Wii in comparison to PS360 with due to smaller userbase individually the effects of competition between other devs are shining more brightly. Thus you are starting to see a change in devs to put just a little more time and effort into the Wii version for hopes of even greater sales. Hell with games like Tiger Woods 09 who's to say the Wii version isn't the lead platform. EA has done a complete turn with Wii this generation and its starting to show. With Nintendo almost virtually ought of this holiday season(no games like Super Mario Galaxy to compete with) it's going to open up the floodgates and 3rd parties will be the winners.

If that happens its going to be a very bright 2009 for 3rd party development on Wii.



So this thread implies that the ps2 gen should never have ended because there were more profits and dev costs were lower right? I blame M$ lol!



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the wii - will reach 50% Marketshare- maybe 60% but that imo is the most it'll go.

that said you have a new ip you want to market to, do you

1- go HD multiconsole with the expense increase?

2- go wii with exclusive rights, ~1/3rd less cost and an equal number of consoles avail.

that is the question you need to ask, which console would be a "safer" bet.

as we can see from the sales of ALL video games, the more effort you put in, the better your chance of it being a success...

personally if i was taking that bet i'd do a great wii game...lower cost, about the same % of gamers on each system, and you have that "exclusivity" mystique to help....