Ernest Adams: Is It Time to Dump EA?
Long-time industry game designer Earnest Adams weighs in a little bit on the state of the industry in a Gamasutra article this week: Is It Time to Dump EA?

He talks about EA's history (he worked for EA for several years), the "EA Spouse" controversy and $20 million employee lawsuit, EA's ability to manage transitions and play hardball with developers. He talks about online distribution coming of age, and the perception that the quality of EA's products has been declining.

An interesting quote:

A few years ago I heard a fascinating lecture by Jim TerKeurst, a research and business development manager at the IC CAVE at the University of Abertay Dundee. He said that at the moment the video game value chain runs: developer, publisher, distributor, retailer, consumer.

That’s a lot of middlemen. In the future it’ll be: developer, provider, consumer. The providers will be the people who own the cable that runs between the developer’s computer and the customer’s computer – or in the case of mobile entertainment, the people who own the cell-phone networks. The only publishers that will survive will be those who have development capacity. Everybody else is out of the picture, and that’s something that EA had better be planning for.

Of course, there are middlemen right now jockeying for position to become the next EA. The big game portals are all trying to get a piece of that action. In fact, there are three prime middlemen positions to be filled. The first is the analog of the retailer, which is the portal. Consumers (as a whole) don't have the time or desire to hunt down all the individual developer websites to buy the game that they want. They'll visit their favorite developers, maybe, but for the most part they'll be hitting the online equivalent of the retail store. That's where the portals come into play. Fortunately, I think there's going to be a lot more wiggle-room with respect to portals than there are for retailers. The low barrer to entry and the lack of physical inventory costs make a huge difference.

The role of the publisher may be broken down into two different roles: The investor, and the marketer. Major games are still going to need funding to be made... dev studios usually don't have $10 - $20 million lying around the office to fund new projects. And while the marketing role may be played by the portals... I wouldn't count on it. Most portals, like retail stores, don't really give a fig about how well a specific third-party game sells... they just want their daily / monthly / annual sales to go up. Somebody's going to have to do the marketing for a particular game, and get the previews, reviews, and advertising in place.

The interesting part is that these two publisher roles may or may not be "middlemen." They may be working hand-in-hand with the developer as partners... in fact, the developer may simply outsource the marketing role to a third party on a contractual basis. Investors ALWAYS make things tricky.

Anyway, interesting stuff. Go on and check out the article, if you are so inclined:

Is It Time to Dump EA?

Labels: Biz

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