I won't quote the multiply quoted posts, but with regards to EA etc increasing marketing budgets for Wii;
Electronic Arts tries Wii, women, Oprah’s coach to halt losses
Monday, 26 January 2009 23:24
ELECTRONIC Arts Inc., the videogame maker that hasn’t made a profit for seven quarters and is shedding 10 percent of its work force, is looking to women and Nintendo Co.’s Wii to reverse its fortunes.
The fitness game “EA Sports Active,” set for a May release exclusively for the Wii, will be marketed to women with a blitz “at least” as large as the annual campaign for bestseller “Madden NFL,” EA Sports president Peter Moore said.
Oprah Winfrey’s personal trainer is a spokesman, and the company may buy infomercials or advertising on cable channels geared toward women such as Oxygen, Moore said in an interview.
The promotional efforts tied to “Active” are aimed at countering Electronic Arts’ macho image and delivering its first hit on the world’s top-selling console. The company is courting female users as part of a broader effort to develop games for the Wii and make up ground on Activision Blizzard Inc., the world’s largest game maker.
“When you look at the impact that the Wii platform is having on our business, we better be relevant,” Moore said in an interview at the company’s Redwood City, California, headquarters. He declined to say what the marketing effort will cost.
Last month, the company lowered its revenue and profit forecast and expanded planned job cuts to 1,000 as sales of games built for Microsoft Corp.’s Xbox and Sony Corp.’s PlayStation 3 lost steam.
“They need a hit,” said Colin Sebastian, a San Francisco-based analyst with Lazard Capital Markets. “If they have a big hit on the Wii in 2009, that would go a long way in terms of helping them.”
Electronic Arts lost $310 million in the period ended September 30 on increased marketing and research costs. The company reports third-quarter results on February 3.
The push to sell Wii games to women follows the company’s failed effort last year to acquire Take-Two Interactive Software Inc. for $2 billion. Take-Two, the New York-based publisher of the “Grand Theft Auto” games, rejected the offer.
Promoting “Madden NFL,” the only Electronic Arts game in the top 10 for all of 2008, costs the company about $10 million a year, according to Evan Wilson, senior analyst with Pacific Crest Securities in Portland. The title didn’t make the bestseller list in December.
“Active” is a “late entry” into the Wii market, Wilson said in an interview. “With a marketing budget of that size, they intend for it to be a multimillion-unit seller. If it’s not then it would be a disappointment.”
Moore, a former gym teacher who was hired by chief executive officer John Riccitiello in July 2007 from Microsoft, says Electronic Arts was caught “out of position” by the Wii.
The promotional effort is necessary to persuade women to use Wii for a workout, he said.
“Women know all about our brand and think it’s not for them,” said Moore, 53. “We’re putting up a very large marketing spend because we have to, to break through.”
The Wii, released in November 2006, sold 10.2 million copies in the US last year, or 55 percent of home new-console sales, according to Port Washington, New York-based NPD Group Inc., which tracks industry sales. Five of the 10 best-selling games in December were for Wii.
Electronic Arts’ initial attempts to adapt games designed for Redmond, Washington-based Microsoft’s Xbox and Sony Corp.’s PlayStation 3 to the Wii were like “trying to fit square pegs into round holes,” Moore said. The company is now devoting teams to work exclusively on Wii titles.
“Our growth is really going to be if we can really nail the Wii,” Moore said.
“Active,” which will cost $60, will use the Wii’s motion-sensing controllers to track players’ movements as they follow along with the virtual trainer. Players will be able to make custom workouts from more than 20 exercises and log how many calories they burned.
Electronic Arts is trying to differentiate the game from Kyoto, Japan-based Nintendo’s popular workout game, “Wii Fit,” by calling it a “Western fitness circuit.” While “Active” is compatible with the “Wii Fit” balance board, the exercises focus on building muscles through use of elastic resistance bands.
The Nintendo fitness game was third in December game sales, after “Call of Duty: World at War,” from Santa Monica, California-based Activision, and Nintendo’s “Wii Play,” NPD said.
To hone the appeal to women, Moore enlisted television host Winfrey’s personal trainer, Bob Greene, to help develop exercises for the game and serve as a spokesman. He also hired a former marketing director for Paris-based L’Oreal SA, the world’s largest cosmetics maker, and is negotiating deals with sporting goods stores to sell the game.
“I think we’ve done well to catch up, but there’s still some catching up to do,” Moore said.
LinkSo EA plan to spend at least as much as Madden's $10m annual marketing budget on this fitness title.
Ubisoft commenting on casual marketing budgets:
Ubisoft's Laurent Detoc talks casual games, industry trends
Casual games are attractive not only to gamers but also Ubisoft, which can develop many of those titles for cheaper. But Detoc said the casual games are not complete cash cows because Ubisoft's is using a certain amount of those profits for marketing, which he said is necessary to draw in new casual users, who are not as hooked in to games as hardcore gamers.
"The margins on these games are good when you look at development, but it takes a lot of marketing dollars," he said. "It's like packaged goods. You have to think about marketing, retail space, branding."
LinkThis is definitely a trend we'll be seeing more of on the casual side of the market, lower development costs offset by higher marketing costs.
