IGN has an interview with Ed Fries (head of Microsoft game studios). Pretty standard stuff, just promoting the Xbox, until you read this:
IGN: Is the relationship between Microsft and Electronic Arts going to change anytime soon so that we might see some of their sports franchises on Xbox Live?
EF: We have a great relationship offline and we have a relationship that is under discussion as far as online goes. We continue to talk to them about that and obviously we’d love to have them on Xbox Live. What we won’t do is compromise what Xbox Live is all about. There are some basic tenets of Live that every game supports voice, that you can find your friends wherever they are, you can invite them and you have one name that works anywhere. These are things that we’re not going to compromise for any publisher no matter how big they are. So we need to find the right way to work together with them where we don’t make sacrifices to the Live experience.
IGN: Is EA stuck on one of those issues in particular?
EF: The challenge that they have is that they’ve invested hundreds of millions of dollars in building this online side of EA. So far that’s been a real business struggle for them. The great thing about Live for basically every other publisher in the world is that they can put their game online and not have to worry about hosting servers, doing billing around the world or this incredible infrastructure that we had to build. EA’s in this awkward position where they’ve built their infrastructure and they want to be able to justify that investment, but you don’t need any of that for Xbox Live. It puts them in a funny situation.
I’ve heard this theory before, but this is the first time I’ve seen anyone be so frank about it.
Well, it’s not completely frank on the monetary issue, according to rumor mill gossip - it’s not simply that EA “wasted” money on infrastructure that they suddenly don’t need with Xbox Live, it’s that EA is trying to make money off of online games and MS ain’t sharing.
How is EA currently making money with any of their online console offerings? Last time I checked, PS2 owners don’t have to pay anything to play Tony Hawk 4, Madden, etc online.
They don’t; I think the speculation has been that Xbox + Live is the first console you could realistically expect to make a profit on the online portion subscription fee. So if I’m EA, from my point of view your job as MS is to just to put people online in their Xbox; I’ve got all this online infrastructure, so let me use that and share some revenue. Otherwise, I use my leverage, put my games on the GC, refuse to support Xbox Live, cancel BF1942 for your console, etc.
That’s not really my view - I’m just relaying what the rumor mongers have been pushing - they’ve managed to roll in every move EA has made for months :)
Why should EA help grow Microsoft’s potential cash cow? How many more copies of EA sports games will sell because they’re Live enabled? All it might do is cannabilize PS2 game sales. The net for EA might be zero.
Meanwhile they’ve helped build an online business for Microsoft that shuts them out of online revenue. There’s not a lot of incentive for EA to put games on Live.
Interesting, Mark. How many customers will EA lose because they’re not Live enabled.
I won’t purchase any of their games until they ARE Live enabled.
So, I guess your answer is at least 1. EA would sell at least one more game if they were Live enabled. (I’d buy at least Madden - don’t know about their other franchises)
That’s right, but EA is in a bit of a Catch-22, I think. Ultimately it would be a mistake for EA to stay away from Microsoft. They’re risking losing market share to Live-enabled sports games. If Game Day or 2kx can deliver some good offline-plus-online play, it could culture flip (can you tell I played Civ III today?) the sports market. The exploit-filled online play of EA’s current offerings on the PS2 is already going to make the online gamers wary of the next iteration.
If Microsoft put some Madden-level branding into their franchise via a big name coach, EA could actually lose big. With their own online venture in the deepest of reds, EA may not be able to keep up with Microsoft’s cash outlays. EA’s pain will probably grow in proportion to the number of people playing online.
Suppose in a few months EA makes an announcement that their PS2 sports titles will include online play. Will they get you back?
EA only risks losing marketshare to Xbox Live if they don’t offer any online gaming themselves. My guess is EA is working on getting some PS2 stuff online.
I’m also not sure how much marketshare is at risk anyway. PC games have had online capacity for years, yet it seems like only a small percentage of players play online. If Xbox Live has 350,000 subscriptions, what does that represent of the install Xbox base? Five percent? Less? Does making a game Live compatible drive significant sales?
350,000 Live subscribers is less than 10% of the Xbox owning population. Like all peripherals, it’s a super slow adoption rate and they’ll be lucky to get 30% of this generation’s Xbox owners to eventually buy a kit.
EA doesn’t want to give up money to Microsoft nor do they want to give up customer information. They don’t want to have their customers bitching about Live service and blaming it on EA and vice versa. But money is the sticking point. EA probably fully believes they can charge people for a one year subscription to Madden online, etc. They also want that customer sign up info in their hands and not Microsoft’s.
I don’t see any way for anyone to dethrone Madden. It’s not going to happen. NFL2K on Dreamcast was clearly a better football game than any Madden at the time. But without Madden and EA, Dreamcast struggled. Even when Gameday was selling well, Madden would beat it. Gameday was clearly better at the time and it didn’t meet Madden in sales. It also was unsustainable by Sony and now Gameday is a laughing stock. I highly doubt anyone is going to beat them, especially not on a console that’s sold so many fewer systems overall. Football can never be a killer app for Xbox.
Without EA, Microsoft will have a lot of lineup holes that are hard to fill. If EA is sticking around with offline games, that’s good for MS. If they decide that supporting Xbox creates competition issues for them (and Sony largely stays out of EA’s way so they’re definitely better at courting EA than anyone right now), they’ll pull the support altogether.
EA is supposed to become the Disney of videogames according to the investors. They won’t get there by being MS’ whipping boy.
Given their bravado over Live and the fact they want it to be the number one reason people turn to Xbox, I think they’d see 30% as a complete failure. They have to be sweating now that Sony announced 1 million broadband adapters out there.
[quote="Dave Long"Given their bravado over Live and the fact they want it to be the number one reason people turn to Xbox, I think they’d see 30% as a complete failure.[/quote]
Uhmmmm…
I feel pretty comfortable in saying that there is no way in hell the Microsoft folks would consider a 30% penetration rate of XBox Live to be a failure.
As far as I know, XBox Live is continuing to sell far above the initial sales targets.
Ironically enough, the Xbox itself may have been considered to be a success if it was not positioned to take the lead in the console market. Microsoft earnestly tried, and their offensive was, if not utterly destroyed, then repulsed soundly.
As far as EA goes, it is most likely a combination of things. The most important thing to remember is that the easiest explination is probably the best one: EA wants to protect their investment in their online infrastructure. Xbox Live! is fine for 3rd-rate publishers and garage-devs that plauge the Xbox, but it is like throwing away revenue to EA. So, while the suits probably agree that they would like a peice of the Xbox market, they all inevitably ask themselves:
“Okay, we can give away these huge online franchise revenues to Microsoft and do the nice thing for all the Xbox owners and the Xbox in general. Or we can ignore the Xbox and charge want we want for 3/4 of all online console gamers and lose out on possibly 10% of total potential console sales. Oh, gee whiz, what a tough discission!”
Remember all the ridiculous pretend-talking pundits on the internet harping on Sony for their lack of online planing? Well it looks like the major players have plans of their own (EA and Square-Enix) and all they want is for the equipment vendor to shut up, give them tools, and get out of their way. Sony does this. Microsoft decided to persue a business solution that, on the face of it sounded like a real good idea, but now obviously will not stand the test of market realty.
Given that matchmaking services tend to be loss-leaders for publishers (you provide them so that people will buy the game), why is there this fixation that “having Microsoft run the service” is costing the publisher money?
What revenue stream is being lost here for non-persistant world games?
Why would EA want to give up all that customer information to Microsoft? Suppose all anyone buys for Xbox Live are EA Sports games. Microsoft are the ones collecting the personal data when someone goes online, not EA. That means Microsoft can market to those people specifically with news of say…NFL Fever 2004 and how its online play is “better than Madden” while EA can’t do the same.
Additonally, as I noted above, Madden is pretty much a recognized standard for football. It is completely reasonable for EA to start charging a fee for matchmaking, community, downloadable add-ons, etc. They don’t want to share any of that fee with Microsoft nor would they want MS privy to what they’re going to charge/offer, before it’s available. If MS knows (and they have loose lips and let other publishers know) exactly what it is EA is up to, that means their competitors can plan to do the same. Competitive advantage is lost. EA could easily charge one fee for all EA Sports online titles. Most importantly they don’t have to pay Microsoft any kind of fees to take the game online. It’s not “free” to have MS support your game on Live, is it?
You’re assuming that EA will give away online gaming for free. Even if they do eventually offer free online matchmaking, they may charge a fee for players to download new rosters with updated stats for players based on current performance, join a league with standings, etc. They can also advertise other games to Madden players playing online. They can sell ads to third parties and make some revenue. They give up all that if they give online play to Microsoft. And what do they get in return if they make Madden Live compatible? Possibly increased sales of the title and maybe they protect their marketshare a bit better. Maybe.
You could also argue that if NFL Fever is likely to chip away at Madden due to Xbox Live, the best thing EA could do would be to put the PS2 version of Madden online, since the PS2 marketshare dwarfs the Xbox marketshare. Hey, if console football fans want to play online, most of them are already playing on the PS2. Those are the ones you want to make happy. You’ll make the most money off them.
Given their bravado over Live and the fact they want it to be the number one reason people turn to Xbox, I think they’d see 30% as a complete failure. They have to be sweating now that Sony announced 1 million broadband adapters out there.
Last I heard, 300,000 HDD/broadband kits were pre-ordered for Square-Enix’s PlayOnline service starring FFXI. And this is in Japan alone.
Now, I’m no sports game fan. However, just by looking at the products, I have no difficulty telling you that EA’s titles are far more polished. They have the true blockbuster feel to it, whereas the competitors are decidedly ameturish. It is not an opinion but a fact that if you want to play football, the online activity for Madden on PS2 is vastly larger than NFL2K3 on Live.
