'FIFA Soccer' Maker Enlists Facebook to Win Players: Tech
June 4 (Bloomberg) -- Forty years after Pong bounced across screens to kick off the video-game era, Electronic Arts Inc. is struggling to adapt to the shifting nature of play, as gamers abandon high-priced consoles for tablets and smartphones. Now, the company has a plan.
The video-game giant plans to unveil free versions of some its most popular games for its Play4Free website and other sites, including Facebook, at the annual E3 video game expo, which begins today in Los Angeles. The move is part of bid to lure customers, who may not own an Xbox or Playstation, to try best-selling games such as "FIFA Soccer" and "Battlefield," according to Peter Moore, chief operating officer.
Offering free versions, the thinking goes, will spark spending on additional game features for the most popular titles once new players are hooked. The strategy also entails reducing the number of games and working to transform those remaining into brands in their own right.
"There hasn't been this much change in terms of platforms, play patterns and monetization ever," said Joe Minton, president of Digital Development Management, an industry talent agent whose clients include the creators of "Star Wars: Battlefront" and "Metroid Prime." "Everything's up in the air."
Electronic Arts, based in Redwood City, California, has spent at least $1.7 billion since late 2009 to acquire popular Web and app-based casual gaming titles, as industry sales of titles for Xbox, PlayStation and Wii players tumbled.
U.S. retail sales of packaged games, accessories and hardware fell 8.5 percent last year to $17 billion, the third straight annual decline, according to researcher NPD Group Inc. To cope, Electronic Arts, the second-largest publisher behind Activision Blizzard Inc., is moving away from designing titles for specific gadgets, focusing instead on building the brands for specific games, regardless of where they are played.
In the past three years, Electronic Arts has cut the number of titles for consoles and portable players to about two dozen from 70. At the same time, the company bought Playfish, PopCap Games, maker of "Plants vs. Zombies" and "Bejeweled," and other smaller publishers to gain a foothold in casual games like "Farmville," the title popularized by Zynga Inc.
Shares of Electronic Arts, down 3.7 percent to $13.12 on June 1, have retreated 36 percent this year, underscoring investors' wariness of the company's ability to develop new online markets while adjusting to shrinking industry sales of PlayStation, Xbox and Wii games. Its new multiplayer "Star Wars" online game, introduced last year, lost a fourth of its 1.7 million players in the first three months of this year.
"They bought Playfish, they acquired PopCap games, they're not making as much progress as you'd think, given the amount of money they've spent on the business," said Edward Woo, an analyst at Ascendiant Capital Markets LLC in Irvine, California.
Electronic Arts isn't alone in looking beyond the traditional game console or handheld player for sales.
Activision Blizzard, known for the blockbusters "Call of Duty" and "World of Warcraft," is trying innovative approaches to expand its "large, loyal communities" of customers, Chief Executive Officer Bobby Kotick said.
The Santa Monica, California-based company's "Skylanders Spyro's Adventure" video game is integrated with collectible real-world toys. The franchise, introduced last year, has sold more than 30 million toys and by 2013 will surpass $500 million in revenue, Eric Hirshberg, CEO of Activision Publishing, said in May.
Activision also is testing a social site called Skylanders Spyro's Universe that lets users chat, play games alongside friends and customize their lands.
"We also have a comprehensive licensing program under way and have announced partnerships with Frito-Lay as well as opportunities for apparel, back-to-school, plush toys and more," Hirshberg said.
Titles that take millions of dollars and years to develop aren't going away, said David Dennis, a spokesman for Microsoft Corp., which will show its next "Halo" hit shooter game at the show. Yet consumers are asking for different entertainment experiences at home and on the go, he said.
Microsoft, based in Redmond, Washington, will unveil learning titles in partnership with "Sesame Street" and National Geographic magazine that use the Xbox 360's Kinect motion-sensing and voice-command peripheral, he said.
"We've been in the interactive entertainment business for seven to 10 years, not gaming," Dennis said in an interview. "With interactivity, you have the ability to make it less of a one-way direction between the consumer and us."
Major publishers aren't giving up on appealing to traditional players, said Michael Pachter, an analyst with Wedbush Securities in Los Angeles who recommends investors buy Activision and Electronic Arts.
Sony Corp. has offered details on an industry-first free- to-play PlayStation 3 game called Dust 514 that's being developed by CCP Games.
Most of Sony's E3 presentation will focus on traditional gamers, not new markets, according to Dan Race, a spokesman.
"In this unprecedented seventh and eighth year of the cycle, we've run out of pizazz," Pachter said. "No one is willing to take a chance on anything new."
To contact the reporter on this story: Cliff Edwards in San Francisco at email@example.com
To contact the editor responsible for this story: Anthony Palazzo at firstname.lastname@example.orgFind out more about Bloomberg for iPad: http://m.bloomberg.com/ipad/
Sent from my iPad