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EA and Free to Play?

Richard Aihoshi Posted:
Columns The Free Zone 0

For a few years now, I've wondered why the major western publishers haven't moved a lot more rapidly to embrace the free to play model. From a business perspective, it has always seemed to me like they've been missing some pretty significant opportunities. A key one is the chance to enter and better penetrate market non-traditional market segments; i.e. to get people playing who aren't gamers, at least not in the parlance used by those who are.

In this respect, EA jumps to mind as a possibility, having spent a lot of money trying to do just that when it purchased Pogo. I don't know if that investment has become profitable, but it did put the company squarely into a leadership position within the casual sector, which has immense and still largely untapped potential.

Maybe it's a case of "once burned, twice shy," but I don't understand why EA hasn't taken a similar step into the advanced casual online area where F2P dominates. It was blatantly obvious to me a long time ago that this area would be a significant driver of growth for the industry, and the opportunity was definitely there to grab first mover advantage. This would also have raised the barrier to entry for other entrants, especially start-up importers, by making it more difficult and expensive to acquire desirable titles.

Other large publishers wouldn't have been deterred financially, but since they stayed on the sidelines anyway, I tend to doubt they've have jumped in en masse. It can be argued that some of them might have followed if EA had taken the lead, but that doesn't seem the most probable scenario. It's not like they rushed to buy or create competitors to Pogo.

It's also clear that EA would very much like to have a larger piece of the MMOG pie. It spent a lot of money (I don't know how much, but have seen figures approaching $100 million bandied about) to purchase Mythic, and then more to fund both the extended development and the marketing of WAR, which has to have disappointed the corporate bigwigs in terms of the player numbers and dollars it has generated.

After that came a much larger expenditure to acquire BioWare Pandemic, including the Austin studio where The Old Republic is in development. I expect this title to do better, but does anyone truly believe it can climb above the than number two rung? And is that a ranking the corporate mandarins will deem satisfactory? Maybe if it's a close second, but how realistic is such a scenario? Plus Blizzard isn't just sitting around waiting to be knocked off its top perch. It has another project in the works that, although it won't be launching any time soon, can only be projected as another major hit.

Right now, it's quite difficult for me to envision EA seriously contending to be the leader in the MMOG space. To attain this distinction, the company would have to do something rather dramatic. While the possibility of further acquisitions immediately comes to mind, there are big questions with this strategy. First and foremost is simply whether it would even be realistically possible to buy enough companies to become number one overall. And if that approach doesn't look especially viable, then what choice is there but to think outside the box?

I also find it interesting that EA has made a couple of investments in the Far East to take minority equity positions in other publishers. It strikes me that gaining access to F2P knowledge and experience must have been a consideration. Will some find its way westward? One of the two, Neowiz, opened a US office a while back, but currently appears to be concentrating its resources on the Chinese market.

When I massage all these things together, I can't help but speculate that EA's best shot at leadership in the MMOG market might involve seizing a dominant position in the F2P sector. That wouldn't be easy, but going head to head with Blizzard and continuing to ignore the rapid growth and the substantial revenue potential outside of subscription games seems even less likely to succeed.

I readily admit that my thinking is based on some sizable assumptions in areas where my knowledge is skimpy. For instance, EA's top brass hasn't invited me to any corporate strategic planning sessions lately. So, it's certainly possible that I'm completely out to lunch. It certainly wouldn't be the first time. But on the other hand, what if I'm not? Wouldn't that be interesting, not just for the MMOG market, but also the game industry as a whole?


Richard Aihoshi

Richard Aihoshi / Richard Aihoshi has been writing about the MMOG industry since the mid-1990s, always with a global perspective. He has observed the emergence and growth of the free to play business model from its early days in both hemispheres.