Friday, December 19, 2008

EA lay-offs: did they have it coming?

I came across this discussion on Gamespot forums about the most recent news from EA, concerning more lay-offs and earnings below projections. I made some comments on that forum but I thought I'd write about it here as well.

Essentially there are two groups: one group of gamers claims it was the quality of the games that brought EA to this point. The other group says it is the economic recession hitting every industry and not just EA.

Here's what I think:

True, the quality of the games probably does not play the only major role in EA's most recent lay-offs. But it still counts. The rise of casual gaming partly owes its existence to gamers being underserved by flashy triple-A games sold at 50-60 bucks. Ironically, the general consensus in the industry has always been welcoming that new segment, thinking it is almost entirely made up of people who were not playing games before. Truth is, there are many hardcore gamers out there who can no longer get the satisfaction they seek in a blockbuster title, whereas those cheap thrills provided by casual games seem to be much more addictive and truer to the spirit of gaming.

Similarly, indie games have been gaining popularity fast, even before there was such an ugly economic situation. Do check Google Trends by typing in "indie games" and you will see this has been going on for a while. There is at least one thread about indie gaming on many gamer community forums, where people are asking where to find quality, original titles that triple-A's cannot match for some reason.

A while ago, I quoted Jay Sampson of Massive Inc, on in-game advertising:
“There are more lines of code and more development hours invested in creating really engaging video games. If I’m a publisher or developer, I’m saying,‘Where’s my new offset?’ Advertising is becoming a bigger part of that offset."
The topic of this post is not in-game advertising, but there is a very interesting message between those lines. With any other industry, the question that would naturally follow after this quote would be: "What do you mean where is your offset? You are telling me you are doing all this extra work, spending all those extra dollars and you are not getting anything for it? Well, maybe it is because whatever you are doing is not value added! Maybe the things you thought that mattered stopped mattering a long time ago."

The much blamed game rental business has in fact been driven by this ignorant underserving: why would I pay 50 bucks for a game that I will stop playing after five hours into it anyhow? What value did they ever put in those plastic CD cases? How much longer did they think I would play the fool by believing their cheap marketing tactics?

A couple months ago, I attended an EA recruitment session in University of British Columbia campus. The HR representatives of the company brought the issue up themselves in their presentation without any prompting from the audience: "Lack of creativity in EA games." Of course their point was to deny it altogether, but their mentioning of the subject did happen to acknowledge the popular consumer perception about such a lack of creativity, regardless of what they tell the investors about what a lovable company they are.

The very fact that there are so many gamers out there who wouldn't shed a single tear for EA, should be the most striking indication that they have been doing things wrong for a very long time. Warning signs and alarms have been going off in many different ways, albeit falling on deaf ears. Finally the recession has amplified the noise enough to alarm them. Even then, it will be very unfortunate if the industry blames it all on the economic crisis, without taking any deeper lessons from the situation.

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