DRM News

EA CEO John Riccitiello sat down with Industry Gamers and talked about E3, 3D Gaming and my pet peeve, the Online Pass. If you haven’t been paying attention the Online Pass means that if you buy a game used, you’ll have to pay $10 to access the game’s online features.

He did say one thing that caught my eye:

I’m a gamer on Wii, PS3, Xbox 360, I play a lot on PC, um…. I’m definitely going to play a fair amount on iPad, iPhones, and once I get my account set up on this Android phone, it’s going to be part of my portfolio. I play FIFA Superstars among other things on Facebook.

Now I’m unemployed, and I don’t have time to play that much gaming. I’m just wondering if he said that because when Activision CEO Bobby Kotick said he wasn’t a gamer anymore, gamers criticized him for that. Maybe he is, I donno, but I really don’t see him in a board room talking about how he worked out how to trap a big daddy and kill him. Somehow I more see him talking about how he loves the power glove.

I have to say that I’m impressed that he talked about the NPD and how it’s only retail they look at, and not the other areas that have grown rapidly.

Remember, the NPD doesn’t even capture second sale, and if you included that in the consumer’s perspective, they probably spent more on even packaged goods than they did the year before. So, if you want to look at this through the unique lens of what sells through four U.S. Retailers – first sales packaged goods only, and exclude everything else, fine. But that’s actually a really weird data point because that excludes everything that’s growing.

He goes on to mention something that is a huge pet peeve of mine. ‘The PC gaming market is dying’, blah, blah, blah piece of crap excuse. But JR nicely puts that to rest.

The other thing is you have to be also a little cognizant that… let’s use the PC in general. If you only look at retail data, the PC’s been in a 10-year decline. A 10-year decline. I mean last time I checked, Playfish makes games for the PC, so does Zynga. Last time I checked, World of Warcraft is played on PCs. Last time I checked, Pogo was a PC games service. So was Tiger Online. I mean, frankly, just those franchises alone are 2x the revenue of the total industry as reported by NPD. 

Thank you JR. Not only that, but to go back and mention something he already said, NPD just looks at retail. Digital sales are growing and growing fast and just looking at retail numbers only gives you a small portion of the picture.

Now we get to the meat of the problem I have with JR in this interview: the Online Pass.

IG: Let’s move on to the whole online pass thing. Obviously that’s been making pretty big headlines for the past couple of weeks since word got out that you guys had started this at EA Sports along with the project ten-dollar stuff that is sort of across all the games essentially. I guess one thing I’m curious about is that I’ve seen people at EA say this is really not designed or not intended to combat used games sales, and that it’s more about giving more value to the online players. But to me frankly, that does sound maybe a little bit disingenuous. It seems like you can’t help but not damage used sales with a program like this. What is your response to that?

Its a good question and I agree with him. EA has in the past lamented how they don’t get a cut of used sales, and I see this as a direct attack on the used game market. JR responds with this:

JR: Well look, I would say… I would first send you back to our press release. Dan DeMatteo was in our release, enthusiastically supporting it, quoted as enthusiastically supporting it, and we had nothing to do with his recent move up to executive chairman. But the point is this: it’s a well orchestrated plan with us and our retail partners because we think it makes sense. Look, I think what can happen in the game industry is there’s some small number of people that carry a cynicism about publishers in general, and they’re always going to. God love their hearts, they’re dedicated to our industry and they want to see us do all the best things for them. But our business is moving. Ten years ago, five years ago, we’d gold master a game, the dev team would move on to something else and no one was there. Today, what happens with a game is a team is there where you [use data] to improve it, provide great post-release content, new services like we did with FIFA and Madden recently with Ultimate Team. I mean the project is only half done when we ship it. It keeps going. We’re selling services.

A few things with this answer, the first issue, ‘there’s some small number of people that carry a cynicism about publishers in general, and they’re always going to. God love their hearts, they’re dedicated to our industry and they want to see us do all the best things for them’. JR appears to be talking down to people with legitimate concerns. The best way for someone to get people to dismiss the opinions of others is to put them down, but in a polite way. This is what he is doing, and I don’t like it one bit.

The second issue is, ‘Today, what happens with a game is a team is there where you [use data] to improve it, provide great post-release content, new services like we did with FIFA and Madden recently with Ultimate Team. I mean the project is only half done when we ship it. It keeps going. We’re selling services’. Now I know what he means by the game is only half done, he’s not talking about selling a half finished game full of bugs, then having to fix it, although it does come across that way. He’s also right in how the games industry has changed, micro transactions and DLC have come into the industry, and I honestly do not see a problem with it. Where I do see a problem is taking a functioning part of the game at release and saying a used buyer cannot access it. Looking back at the history of games multiplayer has been a core selling point. In a good amount of games, what EA is doing is taking that away if you buy the game used and you’re only getting that back if you pay them $10. In my opinion that is a direct attack on used games sales and attempting to find ways around the First Sale Doctrine. While ‘Online Pass’ will be on EA Sports titles only Sega is keeping an eye on the program to see how it does, and its easy to see that if this keeps on pretty soon a lot more games with multiplayer components will do the same thing.

The other bit about the industry changing and his ‘half finished’ comment is that since there are micro transactions and DLC now, they have to ride a fine line putting out a decent game with enough content at release and then going with DLC or micro transactions. The danger for gamers is buying a brand new game, and it turns out its a really bare bones game, then seeing the EA store already has a lot of content for you to buy. The Sims 3 was a really good example of this, and in fact they encouraged you to go to the EA store and buy more content with a $10 coupon. Full disclosure here, my wife is a Simmer and I heard far more about this than I wanted to, but I do agree with her that this seemed to be just a money grab from EA.

One final bit here:

IG: I’m not sure how much more you have to add to this, but just to play devil’s advocate here for a second… In the eyes of an average gamer who maybe doesn’t buy a ton of games each year, and he’s trying to save money and maybe that’s why he buys used games, maybe to save five or ten dollars, and he’s already paid fifty dollars for access to Xbox Live. Then he realizes, “oh wait, I have to pay another ten dollars to even play this game online now that I’ve just bought used.” What does EA say to that type of gamer?

JR: Well, we thank you for your business. You didn’t used to be a customer of ours, and now you are. We’re going to prove to you that that ten dollars is exceptionally well spent.

Again I really don’t like JR’s answer. Its dismissing some very valid points the interviewer is making. In a recession there is simply not enough money to go around, and people want to see deals. They saw these deals in used software and now EA is saying that they want their $10. EA has a right to make money, and to make bundles of money. I don’t have a problem with that, but in a recession anything that smacks of a money grab is just going to piss people off. I also don’t see how paying to access a portion of the game that was available at release, but not after bought used, is a ‘service’.

The interview as a whole was actually really good and JR comes across really well and funny. However with the whole  ‘Online Pass’ I just completely disagree with him.