Retiring EA CEO on the future of video games
Monday, March 5, 2007 | 07:23 PM ET
by Saleem Khan, CBC News Online
Outgoing Electronic Arts Inc. CEO Larry Probst recently took some time to talk with the Wall Street Journal about his view of an industry that has changed significantly in his two decades at the company – and continues to evolve dramatically.
In a wide-ranging interview with Larry Probst, the Wall Street Journal's Nick Wingfield explores how much change awaits an industry whose evolution can be likened to the difference between the Wild West and modern-day Silicon Valley. As the Journal's Nick Wingfield notes:
When Lawrence Probst joined Electronic Arts Inc. more than two decades ago, the videogame industry was a thoroughly undisciplined business, filled with wildcat developers who would hit it big and suffer debilitating failures in even turns. Mr. Probst changed the game by introducing better management, and marketing and emphasizing sequels, helping to turn EA into a factory for dependable hits.
But rather than seeing potential for a crash with a glut of sequels, Probst sees opportunity. First, on Sony's pricey PlayStation 3:
People seem surprised that there might be some resistance to a $599 [US] price point. By the time you buy the machine and a second controller and the high-def cables and a few pieces of software and it gets taxed, you're walking out the door with eight or nine hundred bucks missing out of your pocket. That's a lot of money.…
I'm not so sure that people have fully understood what's in that box. They're getting a thousand dollar Blu-ray player [for playing high-definition movies] for free in that box. It just feels like that is not being fully appreciated by consumers and it may take some time for that to happen.
Then on the potential for new streams of revenue through online sales of virtual possessions for video games:
The microtransaction segment is beginning to develop pretty significantly. You've probably heard the story about our FIFA online [soccer] game in Korea. We did 1.4 million microtransactions at a price point of $1.60 on average [between Aug. 1 and Dec. 31 last year]… power-ups, uniforms, shoes – let your imagination run wild. In the last 12 months, we've done something like $115 million in digital revenue, and it's growing pretty rapidly. We think that number's more than $200 million in our next fiscal year.
He says he thinks projections in-game advertising are at least 10 times more optimistic about the market than he is, and like Wedbush Morgan Securities analyst Michael Pachter, he is skeptical about the potential for digital downloads.
The opportunities to get insights like this from top executives are relatively rare, so jump over to the Wall Street Journal for more on what the future might hold, including Probst's take on online games, the cost of licensing deals like the NFL's, and whether creative innovation or more licensing and sequels are in EA's future.
« Previous Post | Main | Next Post »
This discussion is now Open. Submit your Comment.
« Previous Post | Main | Next Post »
Post a Comment
Tech Bytes »
Recent Posts
- Jesse Brown: Worldwide copyfight heats up down under
- Wednesday, February 25, 2009
- Alas, that’s not Atlantis, Google says
- Monday, February 23, 2009
- Jesse Brown: Government strangely closed about open source
- Thursday, February 19, 2009
- Is traffic management working?
- Thursday, February 19, 2009
- Jesse Brown: Last chance to chime in on Net Neutrality
- Wednesday, February 11, 2009
- Subscribe to Tech Bytes
Archives
- February 2009 (10)
- January 2009 (12)
- December 2008 (10)
- November 2008 (10)
- October 2008 (9)
- September 2008 (4)
- August 2008 (4)
- July 2008 (16)
- June 2008 (9)
- May 2008 (12)
- April 2008 (15)
- March 2008 (13)
- February 2008 (13)
- January 2008 (47)
- December 2007 (12)
- November 2007 (12)
- October 2007 (17)
- September 2007 (18)
- August 2007 (17)
- July 2007 (27)
- June 2007 (18)
- May 2007 (28)
- April 2007 (25)
- March 2007 (28)
- February 2007 (25)
- January 2007 (35)
- December 2006 (25)