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EA Executive Talks About "Re-Engineering" the Industry

| 28 Aug 2009 17:54
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Electronic Arts Chief Creative Office Richard Hilleman recently talked about his vision for the future of videogames, including the continued emergence of casual gaming, the harm caused by used game sales and why Korea is a better bellwether for the industry than Japan.

Hilleman joined EA all the way back in 1983, copying discs and packaging games. He moved up the ladder quickly, helping to create early EA Sports franchises including the Madden NFL series, and became chief creative officer last year. Speaking at the Hot Chips conference earlier this week, Hilleman talked about the "re-engineering" of the videogame industry as it shifts focus from the hardcore demographic to the more ubiquitous and lucrative casual crowd.

Unlike previous generations of gamers who wanted to be completely immersed in a game for hours on end, casual gamers are more interested in playing in short bursts, while "family game nights" means people often rent a game and play it for just one day. "If I sell to them, I can't dominate their lifestyle," he said. "I have to fit into their lifestyle."

And as the hardcore gamer is superseded as the primary target market, the platforms that appeal to them the most are also beginning to struggle. He said both Sony and Microsoft have been left exhausted by the current round of the console wars and probably aren't in any mood to go at it again anytime soon. "I expect we'll see a PlayStation 3.5 before we see a PlayStation 4 and an Xbox 560 before we see an Xbox 720," he said. "The biggest shift is how fast packaged goods games are changing and going away."

EA holds about 25 percent of the "traditional packaged goods PC game market," but sales in that segment have either remained flat or declined. Hilleman blamed much of that on piracy and used game sales; most videogame sales take place within the first three to six weeks of a game's release, after which sales of used copies, from which publishers make no money, become dominant. That lack of a long tail ultimately ends up hurting the industry.

He also held up South Korea as an example of a market where gaming has grown to appeal to a vast and varied audience. There are 28,000 "internet game rooms" in South Korea, he said, and roughly half of the country's population plays games ranging from StarCraft to "fashion games for girls."

"If I want to go to see the past of gaming, I go to Japan," he said. "If I want to see the future, I go to Korea."

The emergence of mobile gaming will also have a major impact on the industry, he said, pointing out that much smaller development teams are required to make games for systems like the iPhone, Nintendo DS and PSP. He said the iPhone was part of the "democratization of game development," serving as a low-cost entry point for new talent looking to break into the industry.

He predicted that the acceptance of gaming will eventually become "total," as the older generation of non-gamers dies off and new technology like the Wii Remote continues to attract and convert more and more people. And as the industry continues to expand its market and adopt new business models, he continued, it will become "vastly more profitable."

Source: VentureBeat

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