MizzouRah
12-03-2004, 11:58 AM
<TABLE cellSpacing=0 cellPadding=0 width=589 border=0><TBODY><TR><TD><TABLE cellSpacing=0 cellPadding=0 border=0 colspan="2"><TBODY><TR><TD vAlign=top>EA CFO Talks Next-Gen Consoles, Online Games
Including a glimpse of how those games might look. </TD></TR></TBODY></TABLE></TD><TR><TD class=bodytext>
By David Smith (http://www.1up.com/do/my1Up?publicUserId=4587275)
</TD></TR><TR><TD width=5><SPACER="BLOCK" width="5"></TD></TR><TR><TD class=bodytext>Electronic Arts has grown to the point where it's no longer just the biggest player in the games industry. It's now a major figure in the entertainment and technology markets at large, lending weight to the opinions and predictions of its top executives. Most recent, chief financial officer Warren Jenson held forth at the Credit-Suisse First Boston Technology Conference, where he discussed EA's prospects in the ongoing holiday season and its plans for the next few years.
Jenson kicked off the presentation with a brief tease of what EA might be able to produce with the technology offered by Sony and Microsoft's next consoles. "Imagine that the characters in a football will be capable of showing real emotion," he said, among other possibilities. "That's what's going to be possible with the next generation of technology."
http://www.1up.com/media?id=1328795 (http://www.1up.com/do/imageDisplay?id=1328795)
A tease for the next generation of Madden...
http://www.1up.com/media?id=1328794 (http://www.1up.com/do/imageDisplay?id=1328794)
...and one for what Need for Speed might become.
Discussing issues pertinent in the nearer term, Jenson turned to how different facets of online gaming will become part of EA's business in the next few years. Once the next generation of online-enabled consoles arrives, "in every living room, we'll have a wireless hub," he said. As a consequence, EA plans to ramp up its online gaming business over the next few years. "You're going to start seeing increments of online-related revenue creeping into the revenue stream over the coming years. As we get into the next generation of consoles and further globalization, this becomes a much bigger deal."
Subscription services -- like the Club Pogo gaming site -- are part of it, but EA's plans to incorporate micro-transactions for downloadable content offer more interesting possibilities for packaged console and PC games.
Jenson pointed to the popularity of new content for The Sims 2, both professionally-produced expansions and new user-created avatars and other features, saying that those kinds of upgrades could eventually become a revenue source. "Ultimately what you'll see is a microtransaction environment where we'll be able to create additional content and sell it into these games," he said. "Over the long term, you'll also have an environment where we'll build tools that allow the user community to build content and sell it into these games themselves."
Online gaming is also a key component of EA's plans for expanding its business in new international markets. Jenson characterized EA as "much more global" than a traditional media company, with its strong presence in Europe and expanding presence in east Asia, and pointed to both online and mobile games as the key to expanding in new markets previously dominated by piracy of packaged software.
China, where EA is currently opening up a new development effort, is the current target, while EA's eying markets like India and Russia over the next three to five years. "Globalization will continue to play a very meaningful role in the future of our company," Jenson said.
On the subject of mobile development in the future, Jenson said that EA will continue its partnerships with external developers like Jamdat and Digital Bridges, but it's in the process of building its own internal development effort, as the mobile market becomes more lucrative. Though its mobile developers are currently based in Vancouver, Jenson proposed that EA might build more resources for mobile development in markets like China to create content specifically geared towards that market.
EA's acquisition of Criterion Software earlier this year sent plenty of rumblings through the industry, given the number of third-party developers and rival publishers that use Criterion's Renderware toolset. In response to questions about how EA plans to take advantage of its ownership of Renderware, though, Jenson downplayed the prospect of any strongarm moves. "We are very open to continuing to work with other developers around the world," he said. He also noted that, in addition to supporting its internal development teams with the Renderware technology, EA plans to make new developments from the Renderware team available to developers involved in its EA Partners co-publishing program. Looking at the rest of the current season, Jenson predicted a successful holiday, despite a few hitches. Low supplies of the PlayStation 2 console are one problem he pointed to. "Clearly there is a shortage of PS2 units in the marketplace," he said, leading to PS2 unit sales "at the low end of expectations." Rising sales of the Xbox are "offsetting some of that shortfall," he added, "but not all of it." Not all of EA's games have performed up to expectations, either. Jenson acknowledged the poor critical reception for GoldenEye: Rogue Agent and The Urbz, as well as the late arrival of Medal of Honor: Pacific Assault to market. However, most of the publisher's releases have done very well. Madden NFL 2005 enjoyed a 60% jump in unit sales after its price drop to $29.99, while Need for Speed Underground 2 is selling 60% faster than its predecessor in North America and three times as quickly in Europe.
</TD></TR><TR><TD></TD></TR></TBODY></TABLE>
Including a glimpse of how those games might look. </TD></TR></TBODY></TABLE></TD><TR><TD class=bodytext>
By David Smith (http://www.1up.com/do/my1Up?publicUserId=4587275)
</TD></TR><TR><TD width=5><SPACER="BLOCK" width="5"></TD></TR><TR><TD class=bodytext>Electronic Arts has grown to the point where it's no longer just the biggest player in the games industry. It's now a major figure in the entertainment and technology markets at large, lending weight to the opinions and predictions of its top executives. Most recent, chief financial officer Warren Jenson held forth at the Credit-Suisse First Boston Technology Conference, where he discussed EA's prospects in the ongoing holiday season and its plans for the next few years.
Jenson kicked off the presentation with a brief tease of what EA might be able to produce with the technology offered by Sony and Microsoft's next consoles. "Imagine that the characters in a football will be capable of showing real emotion," he said, among other possibilities. "That's what's going to be possible with the next generation of technology."
http://www.1up.com/media?id=1328795 (http://www.1up.com/do/imageDisplay?id=1328795)
A tease for the next generation of Madden...
http://www.1up.com/media?id=1328794 (http://www.1up.com/do/imageDisplay?id=1328794)
...and one for what Need for Speed might become.
Discussing issues pertinent in the nearer term, Jenson turned to how different facets of online gaming will become part of EA's business in the next few years. Once the next generation of online-enabled consoles arrives, "in every living room, we'll have a wireless hub," he said. As a consequence, EA plans to ramp up its online gaming business over the next few years. "You're going to start seeing increments of online-related revenue creeping into the revenue stream over the coming years. As we get into the next generation of consoles and further globalization, this becomes a much bigger deal."
Subscription services -- like the Club Pogo gaming site -- are part of it, but EA's plans to incorporate micro-transactions for downloadable content offer more interesting possibilities for packaged console and PC games.
Jenson pointed to the popularity of new content for The Sims 2, both professionally-produced expansions and new user-created avatars and other features, saying that those kinds of upgrades could eventually become a revenue source. "Ultimately what you'll see is a microtransaction environment where we'll be able to create additional content and sell it into these games," he said. "Over the long term, you'll also have an environment where we'll build tools that allow the user community to build content and sell it into these games themselves."
Online gaming is also a key component of EA's plans for expanding its business in new international markets. Jenson characterized EA as "much more global" than a traditional media company, with its strong presence in Europe and expanding presence in east Asia, and pointed to both online and mobile games as the key to expanding in new markets previously dominated by piracy of packaged software.
China, where EA is currently opening up a new development effort, is the current target, while EA's eying markets like India and Russia over the next three to five years. "Globalization will continue to play a very meaningful role in the future of our company," Jenson said.
On the subject of mobile development in the future, Jenson said that EA will continue its partnerships with external developers like Jamdat and Digital Bridges, but it's in the process of building its own internal development effort, as the mobile market becomes more lucrative. Though its mobile developers are currently based in Vancouver, Jenson proposed that EA might build more resources for mobile development in markets like China to create content specifically geared towards that market.
EA's acquisition of Criterion Software earlier this year sent plenty of rumblings through the industry, given the number of third-party developers and rival publishers that use Criterion's Renderware toolset. In response to questions about how EA plans to take advantage of its ownership of Renderware, though, Jenson downplayed the prospect of any strongarm moves. "We are very open to continuing to work with other developers around the world," he said. He also noted that, in addition to supporting its internal development teams with the Renderware technology, EA plans to make new developments from the Renderware team available to developers involved in its EA Partners co-publishing program. Looking at the rest of the current season, Jenson predicted a successful holiday, despite a few hitches. Low supplies of the PlayStation 2 console are one problem he pointed to. "Clearly there is a shortage of PS2 units in the marketplace," he said, leading to PS2 unit sales "at the low end of expectations." Rising sales of the Xbox are "offsetting some of that shortfall," he added, "but not all of it." Not all of EA's games have performed up to expectations, either. Jenson acknowledged the poor critical reception for GoldenEye: Rogue Agent and The Urbz, as well as the late arrival of Medal of Honor: Pacific Assault to market. However, most of the publisher's releases have done very well. Madden NFL 2005 enjoyed a 60% jump in unit sales after its price drop to $29.99, while Need for Speed Underground 2 is selling 60% faster than its predecessor in North America and three times as quickly in Europe.
</TD></TR><TR><TD></TD></TR></TBODY></TABLE>