At this year's E3, Gamasutra had a chance to talk to Frank Gibeau, formerly executive VP and general manager of North American publishing for Electronic Arts, and now, under the recent EA company structure reshuffle, the president of the EA Games label. More specifically, Gibeau is in charge of many of EA's core franchises worldwide, which means the Battlefield, Burnout, Hellgate, Warhammer, and Need for Speed franchises, among others, as well as the EA Partners publishing label.
In this extensive interview, we discussed Gibeau's concerns about the PlayStation 3, the impressive nature of the Wii's business model for Nintendo, the viability of casual MMOs, Gamecock's publishing model (hint: EA doesn't think it's sustainable), the future of the E3 expo, and the possibility of EA getting back into the game console market.
You previously said you were somewhat disappointed with the PS3 software attachment rate. Are you finding that to still be the case?
Frank Gibeau: Specifically in terms of tie ratio?
Tie ratio and also sales of PS3 hardware, in terms of how that affects software sales.
FG: I think that the platforms that have a lot of heat right now are the PS2, the Wii, the DS, with the 360 in there as well. I don't think the PS3 is necessarily in a bad spot, but it's not necessarily in the number one spot, like it has been traditionally with the PlayStation brand. I think what that platform really needs is platform-defining content.
At the press conference, we saw some interesting titles with Kojima's games, as well as Killzone and Gran Turismo in addition to the stuff that you get from third parties. I think 2008 feels like when you start to see the titles that define that platform start to come out. That was a comment made in the context of Christmas, where we looked at how it rolled out, and how the [launch] titles were selling through.
Frankly, there weren't any platform-defining titles on the PS3 that first Christmas. There was Resistance: Fall of Man, perhaps. I think as we get more titles, that tie ratio will improve. It has improved since release, which is good news. I think it really starts to get into the range where we feel like we're bullish and aggressive. It feels healthy in 2008.
Are you nervous about any titles that you might be releasing before the end of the year?
FG: Nervous from a quality or ship date standpoint?
Nervous from an "Are we going to recoup costs?" [perspective].
FG: You sweat those all the time. The way the market works this year, we've been calling it "Murderer's Row 2" inside EA. There's some terrific competition coming. Call of Duty 4 is spectacular. You look at Halo, and you look at a lot of first-party titles, and there's some good stuff coming. We like our chances in that mix, but you never know. The customer gets to vote.
If you get the game right but the marketing's wrong, you end up with a loss. If you get both right, then you're there. I think the nervousness is something that we have on all titles. We get nervous about Madden every year. We track it to the nth degree to make sure that the launch goes well. I always have an anxious night before release to get the first results in, to be honest with you.
Which of the games that you're in charge of right now do you have the highest expectations for?
FG: In general, I have really high expectations on Battlefield: Bad Company and Burnout. We're working with Patrick Sutherland and Alex on those designs. I love their creative vision and the integrity that they're bringing to those games. Spore is also clearly up there.
I'm having a lot of fun watching the team working on The Simpsons right now. The twist and the take that they've gone after with the concept of that product feels like it's really fun to have a controller in your hand. You're playing with Homer and the crowd, and you're doing all these different things with the different levels being game-based stuff from the game industry. Those are the ones that jump to mind initially. With Warhammer, the beta's going really well. With the number of newsletters and signups for the beta and the feedback we're getting, I'm getting really optimistic about what we're doing there.
The MMO space is really difficult right now. A lot of people are trying to break into it. It's hard to break people out of the set games that they're playing, and it's also hard to draw in the new players because they're perceived as being very hardcore.
FG: I actually play them a lot. As a fan of the category and seeing how it's developed, there's a lot of really interesting things happening there. Not only do you have your traditional MMOs like Warcraft, Lord of the Rings Online, and Warhammer, but the light MMO space is cool, with stuff like PSWs.
I really like how that is starting to branch out and broaden. What's really encouraging is that something's come out and proven itself to be mass-market in that product design, with World of Warcraft. It's breaking through and bringing in that many new people. It just makes it that much easier for the industry to grow afterwards.
Have you looked at all into the more casual MMO space? Some have been talking recently about how the game industry is getting beaten to the punch by web guys in terms of the casual MMO stuff, like Nickelodeon's offering for instance.
FG: I actually consider them as part of our industry in a way. There's an interesting collision between social networking and entertainment. There's Second Life -- is it a 3D visualized social network, or is it actually a game? I don't really care -- it's fun! I look at PSWs [persistent state worlds] and at what Nickelodeon's done, and there's a whole bunch of really cool activities happening there. I consider that part of what we need to be doing as a company and as an industry. For me, it's really encouraging.
It seems like Pogo was going in that direction with the downloadable games.
FG: You asked if we're looking at it, and we're definitely looking at it. We're doing a lot of study on it, and we've been looking at a lot of opportunities. We're encouraged on multiple fronts, having been in the MMO business before. Frankly, Pogo's a pretty damn cool business. If you look at the behavior patterns of the women playing Pogo -- it's prominently an older female target -- it's the same pattern as a WoW player. They're putting a certain amount of hours and money into their hobby, and the way that they're looking at it is pretty much the same.
You mentioned Spore earlier. How much is it going to affect the company if it's delayed?
FG: It's not affecting it, because we've announced it and set expectations accordingly... It's a Will Wright product, and our aspirations for that product are to the level of what we've achieved for SimCity and The Sims. We will put it out when it's ready. What you want to be able to do inside of a company when I'm excited about my new job is you go in and you sit down with these local teams, and you look at what they're building.
Being able to put together a total picture of how these things orchestrate and help each other from the standpoint of giving time for Spore so that it can be the best that it can be, and also other products inside of our portfolio, is the trick. So when I think about Spore, there'll be other franchises and teams that we will be orchestrating that helps move the company forward, but also allows balances for product quality.
I wonder if investors get a little nervous about moving something that far.
FG: I had dinner with them last night, and I have more meetings with them today. They asked a lot of good questions about Spore, and you'd be surprised about the reaction. The reaction has been patient and understanding. They understand what we've pulled off with SimCity and The Sims, and they say, "If that's in that league, a business that creatively powerful and that global is worth waiting for." It's not like missing a movie date.
I'm not used to investors being in any way savvy. I get the perception of people with money throwing it in certain directions and hoping that something eventually bounces back.
FG: You know, I don't run into those guys too much. The ones I run into are pretty damn smart. They're not inside a company, so they're always at arm's length trying to figure out what they're seeing, because they only get a certain number of metrics that come out. But they wouldn't hold their jobs very long if they were too blind about it.
Do you have to justify EA's push for more original IP right now? Outside of The Sims properties, I don't know how many original IPs will sell as much as a Madden or something like that.
FG: Right now, we're looking at a lot of original IP that we're building. Our hope is that we can get games into the top five and the top ten globally on these new IP beds. We'll look at things like Army of Two, and how we'll bring Battlefield over. Even the stuff that we're doing through the partners' groups with Hellgate and Mercenaries and Rock Band, we have extremely high hopes for those businesses. Need for Speed actually outsells Madden on a global basis.
One of the other things in my job is that I don't necessarily just look at the NPD data. That's not one metric. What I'm also looking at is how to do Spain, and what's the tune of culture like in Germany, and how Need for Speed ties into that. Ultimately, what you find is that games like FIFA and Need for Speed have large global footprints outsell Madden almost two-to-one.
We tend to focus on the American market the most because it's biggest, but it's not the biggest for everything.
FG: No. What's interesting about the North American market is that people have this over fascination with NPD data. It's important and it's valid to watch, but it doesn't measure how much time people are spending online. It doesn't measure what people are doing in China, it doesn't measure what's going on in Europe, and it misses whole categories of product where people are playing. Where does Second Life show up on NPD data?
Right. Well, they're going to have to make some significant changes over time, because the industry's changing too much for those kinds of stats to be really that relevant.
FG: I couldn't agree more. We've gone from three relevant platforms to like eleven. One of the things we tried to do is figure out where people are spending their time. We went in and we talked to people in their houses, and watched them. We had them keep diaries, and we just tried to figure out when they were spending more time playing games, less time playing games, and when you're playing games, what you're playing them on.
What we saw was a lot of really interesting things. There's a lot of multitasking going on while you're playing games. There's a lot of playing games and taking them with you on your phone as well as playing it at home on your PC, and going over to your friend's house and playing console games. We're trying to keep a broader sense of what's going on with our fans and our customers, and we're doing that through figuring out how they're living and what they're doing. It's proven to be pretty useful for us.
What have you found people are playing the most, in terms of platform?
FG: Globally, it's on the PC, and by that it means a midsession game in China as well as a PC game in Germany, as well as a PC or casual web product here. When you look at just the raw numbers, once you step out of that 100 million people you superserve with Halo and Madden and you step out into the larger PC market, that's where you see the broadest base of people. It's very diffuse and fragmented, but that's where the mass is.
Can you say on the console side, or handhelds?
FG: After the PC, it's definitely the PS2, and the DS. The Wii is just starting, but the Wii is on track. One of the things you look at is how many markets they are successful in. The Wii's successful in Japan, North America, and Europe. The Xbox is successful in North America and kind of successful in Europe, and not at all in Asia. But there is no console business in China.
I was reading an interesting plan the other day when we were looking at the market. I think there's 300 million males 18-34 in China. It's larger than the population of the United States! There's no women in that, and I'm not even talking about 12 to 17-year-olds. Not all of them can play games, but a lot of them have access to PCs and phones. None of them have access to consoles, or if they do, it's pirated stuff. When you take that step back and take a broader perspective and put NPD in it, it's like looking at an elephant through a straw.
It's really hard to tackle the China market. It seems like it's been pretty hard for Western companies to break into the Asian PC market.
FG: Yeah. I think the market is becoming mature enough for Western companies to go in. Obviously, what's critical in China and Korea is finding the right partner who can help you understand the culture and how to go to market, and how to make a great game for them. For FIFA in Korea, we had a lot of success with Neowiz. We completely changed the game design and put it in the market, and found that it did very, very well. We have similar hopes for China.
Do you think the Wii's success is sustainable? Anecdotally, I know a lot of people who were really excited about it, and are now kind of wondering what the next game is to buy. That's also sort of true on the casual side. Once the housewife or whomever buys Wii Fit, what's her next game?
FG: I think it's been off-the-charts successful and the buzz is positive, and now the challenge is not so much getting on peoples' radar as the hot platform as it is how they sustain. You're absolutely right. When you look at their pipeline of products they have coming, there's a lot of stuff for everybody in there, and all the publishers are chasing it hard.
I don't think there's going to be a problem of supply of titles. They're going to be in all kinds of categories. How that housewife who's a first-time buyer of games adjusts from a 0% tie ratio -- does she go to 2%, or three? She might pick up Brain Age. Maybe she picks up a Harry Potter game and plays it with her son.
Those are the factors that I think frankly a lot of people are shooting in the dark on. They're just going to have to watch events unfold. They can start to measure it, but the platform is so fantastic in how it changed the machine interface that I think there's a lot of stuff that's going to happen that surprises people. Does it sustain as long as a high-end console? Maybe its lifecycle is shorter, but I bet they sequel pretty quick and keep it fresh with new content.
That's something I've been wondering about as well. It seems like the 360 and PS3 are probably going to have longer lives than previous generations, though the PS2 had a long life. Perhaps not longer than that. We typically used to say five to seven years, but now it seems like the technology is at the point where it has to be longer to keep it profitable. The Wii strikes me as something that might not be able to stand quite as long.
FG: The other important thing is that they don't have to. Their business model's completely different from Sony's or Microsoft's. Their costs of goods on the boxes are different. They're already in the money, so they don't need to hit profitability in year five. They're already there. So the fact that they could still experience a five-year lifecycle and come back with something else after that that leveraged what they achieved is, to me, totally reasonable, and exactly in the right place for them. I think the PS3 is going to have to have a longer lifecycle, and the power of the online connection on those is a little bit more [important]. The amount of content you can bring and things you can do will help extend those lifecycles, and I think Nintendo will think about that.
I think they really have to. They have to ditch the friend codes, and just make a network that people can sign into. It's a little unfortunate when Sony can beat you at an online experience in a platform. In the past, I know that EA chose to do its own online platforms, even when there were more alternatives. That has changed now.
FG: Yeah, I think the nature of the web has changed as well, though. I think that what you see is more distributed networks, and more content and personalization being spread across more things. What used to be centrally planned, walled gardens just doesn't work as a model anymore. Consumers want different things. I think we've adapted to that. The other thing is that there's a lot of terrific off-the-shelf tech support platforms that you can pull into the company. I think it's a mindset and a read that's different. It's just evolving with the market.
What do you think of E3 this year? I imagine you were probably a part of the group pushing against the previous incarnation, because I know EA was a big factor in it. What do you think of this current iteration of E3?
FG: We were just one of a bunch of people, so it wasn't like we were leading the charge. At the end of the day, it's the hardware companies who have a big impact. I don't know if the show necessarily leverages the best efforts of the industry and its profile. I liked the way it worked before, but the way it was before was no longer really sustainable. I'm not sure that this configuration's formula is leveraging the best that we have, but I think it will undergo more evolution.
I know our experience is that it's clear to us that we want to bring people to EA or go see them with our stuff in a much more concerted, impactful way, and also at consumer show opportunities, so we can continue to have that impact that that one concentrated E3 had, but not with the complete diversion and distraction of resources and time against development teams that was creating.
My perception was that it was supposed to be more industry-focused, and as an industry publication, I've found that it's been incredibly difficult to find any of the kind of stuff that we could cover, like interviews with developers. There are very few developers here. It's curious.
FG: It is. There's very few retailers, too. Traditionally, you had retail, investors, and the press, and then sometimes you get fans who sneak their way in. Nobody's sneaking in anymore. Most retailers didn't come -- it used to be global. You guys are stuck trying to find Waldo, running all over west LA. We do see investors, but there's other ways to talk to investors.
Flagship Studios' upcoming EA-published PC action RPG Hellgate: London
You mentioned Hellgate a while ago. That's external. How different is that from working with the internal teams right now?
FG: The partner's group works inside my team, and the core fundamentals are the same: working with a creative team, figuring out what game they've got, and trying to bring it to market in the best possible way. You've got less control over it than you do on an internal title. That doesn't necessarily mean that control translates into better, it just means that you can prioritize or move resources around inside EA to help the team when they need help, or maximize it in different ways that you don't necessarily have with an external party.
Having said that, one of the things we do is that we have engineers that can go and help a problem inside the developer organization -- any different types of problems that they may have with a first party or certain processes or that sort of thing. What I've found so far is that the difference hasn't been that dramatic. When we sit down with Flagship or Pandemic or our partners at Crytek, we sit down and approach the games the same way in terms of how we want to market it and how to turn it into a hit. We give them feedback on what we think will make it better.
Obviously, the internal team or an external team can choose to not do it for whatever reason, but hopefully what you do is you end up in a place where feedback makes sense and it does make the game better. Ultimately, they do get to make the final call, so there's a little bit more influence they have on an internal game, but you can't have a baby in three months even if you want to! It still takes nine months.
Even if we wanted to go twice as fast, it's still creating software. It's a little less control, but what I do like is that we can bring in more experimental ideas and more teams in EA by partnering with it in that way. I know that the approach that I'm taking with it is a lot more progressive and enlightened in terms of just saying, "Let's try lots of different things. Let's look at different ways of working with people."
There are some new publishers out there, like Gamecock, who have eight people and low overhead, and they're trying to give a lot more royalties to their third parties and things like that. What do you think of their model, from what you know of it?
FG: I'm not as familiar of the model as I probably should be, but I do know, having run publishing organizations inside of EA, that the way that the retail channel is shifting is that it's increasingly becoming concentrated in the big accounts. I'm not talking about digital distribution, though. We'll set that aside for a moment. In order to get the meeting with the buyer and get the scale and leverage that you need in order to get to the right margins in pricing, and how you handle SRA and inventory, it's an extremely complex, large-scale operation that frankly, eight or nine people would find exceedingly difficult if not impossible to scale.
If it was an eight or nine-person department that launched one or two games a year on the PC, it could happen. But how they serve those 30,000 store fronts, make sure the products ship on time, and execute a street date -- it's just become so extremely complex and sophisticated that I would think that they would have more luck carving out a value creations side of a digital distribution operation, or something more boutique and specialized. Perhaps that's what they're doing -- I don't know that much about them -- but when you want to scale, you need more than eight people.
They're doing some full-fledged console stuff, and it's going to be interesting to see how they do. I think they outsource a lot of their stuff. They've got the eight core people, and they work with external partners for a lot of the other stuff. It's interesting to me, because it strikes me that it might be possible to be a bit more nimble when you're eight people versus thousands.
FG: Well, all of North America for us inside EA was only 360 people, and something like 120 of those were inside our deep distribution organization. When you then broke that down against our SKU plan, they're relatively small and nimble teams. It's having the systems and the relationships that allow you to scale. When you walk into a retailer and you say you want to set your net price at X, you've got one title and your one guy to say, "I'm not going to take it," or "Here's the deal: here's your price." That's just simple. It doesn't matter if you're running milk or coke or games; it's the same type of behavior patterns.
Don't mistake my feedback as being dismissive of it. I welcome the innovation, and I'd love to see how it goes. But having run those things, if you want to execute a Madden launch, or a Halo launch, or something of that scale, I think they would find it hard.
I was thinking about the 3DO earlier...
FG: I worked on it!
Motorcycle action game Road Rash for the ill-fated 3D0 console
I was wondering, would EA ever find it rewarding to partner with a hardware company again in that way?
FG: Never say never! I was the product manager on some of the titles that launched -- Shockwave, Need for Speed, and Road Rash. I was part of that team that started to build those games, and it was a very small size. I think the challenge that we had with the 3DO was platform positioning. It was the Swiss army knife of hardware. It was supposed to do really great.
When we look at our business, what's vitally important to us is the entertainment and the customer connection. If there were things like peripherals, sure. We have Boogie coming out with a microphone, and we've got Rock Band with MTV and Harmonix. When you look at a fully nailed platform, it's possible. I wouldn't say it's our top priority right now, but never say never. We'll look at any way to grow.
I've been wondering about when and how Microsoft is going to do a handheld platform. My perception was that if they did, they'd have to partner with someone strong on the software side who knew what was going on.
FG: We're ultimately a software company -- we're looking at the iPod, and we're making games for that. We haven't changed our core philosophy as platform-agnostic game makers. It goes all the way back to the Apple II, the Amiga, and the Commodore. It's just different platforms.
But even with 3DO, you were platform-agnostic. It was just that you were giving [exclusive software].
FG: The 3DO guys loved that!
Yeah, I bet they did! They thought that was great, I'm sure.
FG: It does make for some interesting meetings, I can tell you.
Did you ever have to meet with the guys at the Japan side, at Matsushita?
FG: I did. I was pretty junior at the time -- I was just a project manager. But we had those meetings, and those kickoffs. We went to Japan a couple of times.
I was researching the M2, which was supposed to be the 3DO's successor, and it was some pretty interesting stuff. They actually ended up making that into arcade hardware.
FG: Yeah, our experience with the 3DO was such that we wanted the first one to be successful, not wait for the sequel.