EA's Riccitiello: 'Nintendo Isn't Trying To Dominate The Platform'

Despite Nintendo's overwhelming success, questions often linger over whether the proliferation of Wii has benefited third parties nearly as much as it should, as publishers appear challenged to make regular hits on the platform. Like many publishers who felt the sting of an overcrowded holiday 2008 on the next-gen platforms, Electronic Arts has made an increased focus on Wii a core component of its product strategy for 2009. EA's efforts have already begun to bear fruit, with the 600,000-unit launch of EA Sports Active on Wii. "That's our best launch so far on the Wii," EA CEO John Riccitiello tells Gamasutra. "It's the first time a third party has been number one on the Wii platform two weeks in a row." It's clear why this is an important success: "The number one platform is expanding the market, and growing," says Riccitiello. "Having a lead position there seems like an obvious thing for us to do." Keys To Wii Success So how did EA break through? "I think we realized what it takes to be successful on the platform," Riccitiello says. "No ports and pushes -- do things that optimize against the controller system inherent in the wand and nunchuk." For example, the company hopes it will make similar strides with its upcoming Harry Potter title's wand-based mechanic, which lends itself to the Wii remote, and EA's Tiger Woods PGA Tour 09 and Grand Slam Tennis will be among the first games to leverage the new Wii Motion Plus peripheral for its swing mechanics that Riccitiello says "are better on a platform like the Wii than alternatives." EA Sports Active has been successful in part because it's "clearly enabled by the technology." New marketing initiatives also help build a presence on Wii, Riccitiello asserts, and in the coming year EA plans on "speaking differently to this consumer." Small changes -- like advertising that focuses on showing the consumer interacting with the product and not just footage of the game itself -- are important to attracting the Wii's more casual audience, says Riccitiello. So in Riccitiello's opinion, Nintendo's not failing to support third parties on Wii. "If [Nintendo] was an independent third party, it would be a rival to EA as the number one packaged goods game company -- on their own platform, it concentrates." "We've been, in years past, able to do a 20 percent share on Nintendo platforms, comparable to our share on PlayStation 3 and Xbox 360," he says. "We had a 13 percent share last year with a product lineup that I thought was... good, in certain cases. Now, our product lineup in [fiscal] Q1 is better than our entire 2008 product lineup, for Wii specifically. That lineup, well-supported, will be really successful." "For what it's worth, Nintendo isn't trying to dominate the platform -- they're trying to have their platform dominate the world. It's a different objective." On The Way To A Turnaround Now that the company's focusing more on its Wii strategy, Riccitiello expects EA to continue narrowing its losses and improving the company's outlook as the publisher has done since it announced aggressive cost-cutting earlier this year. "We needed to address quality, Wii, and direct-to-consumer business models," says Riccitiello. "I think we've addressed all three now in a really good way. Our cost structure was too high... but it needed to be done in a certain order. If I'd left quality unaddressed and Nintendo unaddressed, I don't think I'd have a situation where any cost structure would have worked." "When we hit the wall last year, in a weird sort of way I think it was an opportunity to right the cost structure all at once," he adds. The Economy's Permanent Mark Even with the extenuating circumstance of the larger macroenconomic climate, Riccitiello still feels confident about the road ahead for EA and the industry at large thanks to new business models and new consumers. "I don't think our industry is ever going to be like it used to be," he says. "There are close to several hundred million gamers in the world. It's a big market now, and it's going to be a bigger market." He says the recession has had a permanent effect. "I'm not sure the consumer is ever going to come back the way they did," he says. "Big-ticket item disposables are going to be pretty hard hit -- I'm just glad I'm not in the restaurant business, or the travel business! I'm really glad people stay home and need something to do, because I think what they're going to do is play video games." Shifting To Software-As-Service To adapt, publishers will need to focus a greater share of their attention on business models previously thought of as minority or emergent, says Riccitiello. "The industry has traditionally been 80 percent-plus console," he says. But over the next two years, he expects console software to comprise only about 50 percent of total revenues, with a combination of subscription and microtransactions models, mobile downloads, casual gaming and PC titles to comprise the other half. "Presently, we are packaged goods with strong service components," he says, noting that EA and other industry companies are already extending the life of packaged products and their relationship with the consumer through post-release DLC content and persistent online modes that receive continuous updates. "Within a year or so, we're going to feel more like services enabled by packaged goods," he predicts. "Services are the Nirvana that I'm trying to get to, because I think it's better for the consumer; there's more value in the dynamism of a service." Last year, Riccitiello says EA's NBA Live received "several hundred" updates to keep current with the stats of real basketball games, and the company plans to maintain a similar level of dedication to its other online-enabled titles. "That's what's happening with The Sims 3, that's what's happening with most of our games." "It's hard to do, this new approach to building products and supporting them," he says. "It further widens the advantage online has."