EA COO weighs in on Infinity Ward firings, retail's fate

GDC 2010: COO John Schappert says digital revenue will still be tied to shiny discs for years to come, expresses regret that Modern Warfare 2 developers will be spending time making court cases instead of games.

Who was there: John Schappert, chief operating officer of Electronic Arts, took part in a half-hour "Mythbusting Fireside Chat" with Los Angeles Times writer Alex Pham. The executive was expected to talk about the industry's migration to digital distribution, the ultimate fate of retail game sales, and how social media and other recent trends will influence that evolution.

EA COO John Schappert.

What they talked about: Alex Pham began the talk by recapping a bit of Schappert's history, back when he was a lead programmer for Visual Concepts working on an EA Madden game and FIFA Soccer. Things quickly turned toward the future, as Pham asked if there were any prospects at all for disc-based games with the advent of digital distribution.

Schappert called it a misnomer that retail discs would be done away with in the short term. He acknowledged that there's a huge opportunity in digital distribution but pointed out that no matter how successful the current wave of add-ons and downloadable content may be, those business transactions still start with a retail sale of a physical disc. Even when most of the industry's revenue is drawn from digital distribution, Schappert said he still expects the majority of that money to have been spent on extending and adapting a standard retail game.

Schappert said EA has seen consumers buying fewer games of late. Sales of the top 10 games are representing an increasing amount of the industry's total take. He added that if a publisher doesn't have a game in the top 30--and arguably, the top 20--then that company isn't making money. Hit games are bigger than ever, he said, and they're selling for longer thanks to downloadable map packs and other add-ons. While Schappert stood by the "shiny disc business," he emphasized that the model has changed, saying the days of "ship it and forget it" are behind the industry.

EA's faith in retail games doesn't mean the company is shying away from downloadable titles. Beyond its own efforts, the company has begun teaming with independent developers on digitally distributed titles through its EA Partners program. "It's easier than ever to be your own self-publisher," Schappert said, before adding, "It's harder than ever to stand out."

Schappert also touted another EA development, the recent acquisition of Playfish. When asked if the company aimed to use the company to further EA's existing brands or launch new ones, the executive said gamers would likely see the developer produce both. Pham asked if classic arcade titles were among those being considered, and while Schappert evaded the question, he did say it was an area EA was looking at.

When pressed about whether social gaming is a bubble waiting to pop, Schappert explained that any bubble perception was due to a combination of the space being the "hot" thing right now and having low barriers to entry. As a result, he expects some social entities to emerge healthy, but he won't be surprised to see others go under.

"It's the place to be right now, but we'll see what happens tomorrow," Schappert said of social gaming.

When asked about innovation and whether or not it's the place for big publishers to be, Schappert pointed to Dragon Age: Origins, Mass Effect, and Battlefield: Bad Company. Dead Space and Mirror's Edge were also name-dropped as Schappert touted the publisher's track record with its own original products and ran down some of EA Partners' success stories.

Pham brought up the recent Infinity Ward-Activision flap and asked if EA is a good publisher ("mothership" was the word she used, referencing a Bobby Kotick presentation from last month's DICE Summit) for developers to team with.

"Maybe you don't pick motherships that like to litigate that much, or have a legal team that is a revenue-generating team," Schappert said, drawing a wave of laughter from the crowd.

Joking aside, Schappert said he was disappointed with the situation, calling former Infinity Ward heads Jason West and Vince Zampella two of the best creative people in the industry. He also singled out Modern Warfare 2 as a great game.

"To think that they're going to be spending their time dealing with lawyers instead of making games is a loss," Schappert said.

Quote/Takeaway: "At the end of the day, online is great. It's a nice evolution of our space. But it does all start with a shiny disc."

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Discussion

63 comments
June-GS
June-GS

Tsk, tsk, tsk. Poor ol' Bobby. That sad genius must be biting his arms off right now. As if the hits-after-hits from EA weren't enough to make him cringe. Now, because of his petty maneuverings, Activision has single-handedly made its fiercest rival publisher slash "mothership", the prettiest girl in town. Bravo Bobby, bravo. As for the digital versus retail distribution debate, I like 'em both, to be honest, but hey, I just go with the flow.

bitemecf
bitemecf

I really can't take such an interview seriously seeing as the relationship Electronic Arts has had with gamers in the past 10 years. The fact is, is that console gaming and physical publishing services are obsolete, with a service such as Steam already having such a foothold in the publishing industry, publishers are going to be forced to pack up and find other business elsewhere, where fast download speeds aren't a standard, and eventually will become extinct as the entire world goes digital. We have so many gaming companies and publishers that are so insistive on making money in traditional methods, that it's really going to bite them where the sun doesn't shine, evidenced by recent events with EA studios. Its simply a matter of identifying the future and heading towards it, or you'll be left in the dust.

AnelZukic
AnelZukic

I'll also agree that even though we now want to have a physical copy of our game, we can't say what the young kids will want, maybe they will prefer download. I already know, no matter how much we want a physical copy that they will one day be changed just by data on our HDD's. And I'll say the quote Microsoft said some month ago: "2GB are the new 50MB" and I completely agree with that, I have a friend who download about 200GB per month, and when it comes to me it is just about 20GB for now :)

green_dominator
green_dominator

@sj_nehama It's actually possible to do right now.... About a year ago I downloaded.....150gb worth of game data.... it was all mostly older games but I don't have any working older systems past PS2/XBOX. If your thought was about XBOX 360 and how slow it downloads stuff.... that's because the system now has so much overhead due to all the updates to the system, I fear you'd have to revert back to the old way things were done but then you would be locked out of features.......

kmconstable
kmconstable

Codemasters does not listen to gamers very well. Operation Flashpoint Dragon Rising is a very good example of a PC game that never met its potential and will get no further support from the developers. EA is just riding the anti-Activision sentiment at present and can afford to joke because they are no longer the most hated company. Schappert said nothing extraordinary whatsoever.

jamyskis
jamyskis

I thought Schappert's quote at the end was sheer genius - EA is perhaps one of the first to recognise that digital distribution is going to accompany retail for a while yet at best. I've been a hefty critic of EA in the past but I have to admit that they have been pulling their acts together of late. In the past year EA has been one of the only companies that I feel has actually been listening to gamers (alongside Stardock and Codemasters).

SpaceTrucker06
SpaceTrucker06

Should spend more time on making games instead of court cases? Hmmmm, EA do the absolute opposite by churning out clones of the same games for years and years until they kill them. EA can't talk about other companies when there own company is struggle in their own way. PAP

TWayne1020
TWayne1020

Big bussiness like big government = corruption !!!

dezzyfiesta
dezzyfiesta

Maybe big games companies should think about treating their employees less like crap and more like human beings, that might help avert some lawsuits...

Pikaandpi
Pikaandpi

I find it interesting how EA is essentially sympathic with Activision by telling the IW boys to get back to work instead of fighting Activision. Hmm, I wonder if its because both companies have similar business practices? (As in firing employees as soon as the game is finish to reap higher profits)

advocacy
advocacy

If only EA would stop firing the talented individuals making these great games.

Black_Adder_
Black_Adder_

I live in Latvia, set my region to Poland (no one will force me to set region to Russia). Now I simply cannot get downloadable content even if I'd want to...and yes, even if my PS3 get YLODed - the closest service is located in Finland. Cheer up, life's good!

sj_nehama
sj_nehama

i just wonder how fast internet would have to be to allow all of us common mortals to download 100GB of game data... how many terabytes would our console's hard drives have? Last gen it was 8-9 gb tops, this one GOWIII is at 30gb i think, i can only imagine the size of PS4 games...even by today standards, fast internet isnt the most common thing, so i really think it ll take a while before we go full digital

damodar_thade
damodar_thade

EA have made as many fubar decisons as Activision have throwing mud at Activison will not make you better EA.

Hanzoadam
Hanzoadam

Please dont let this be the star of Ea trying to get infinty ward they already have Dice :cry:

Hanzoadam
Hanzoadam

[This message was deleted at the request of the original poster]

tbs76
tbs76

I really hope the industry doesn't adopt a digital download process in the future. I like walking into a store and seeing the product on the shelve. I prefer physical copies any day. Just wish they would make discs more durable and not so easy to scratch. As far as Activision is concerned, I say shame on them. It wasn't so long ago Activision wasn't a big publisher and was struggling with sub par titles in their stable. Now they go and get rid of the guys who helped put their company back on the map. Not cool man. I hope the company goes downhill from here on out just so these big corps can learn some lessons. Oh, and enough Guitar Heros already.

FallenAngel
FallenAngel

So here's the thing. I think what Activision did was a d*** move. And the less said about my feelings about the Activision CEO, the better. But the EA COO weighing in on in this issue is hilarious. If ever there was a pot calling the kettle black situation, this is it...

Inconnux
Inconnux

I thought that Activision took over the role of Satan, but EA still doesn't get it... I went to buy Battlefield BC2 on steam... and there it was... 3rd party DRM... Securom... way to go morons, you just lost a sale

mdcross
mdcross

good stuff....interesting, if we could hear both sides of the IW/Activision story.

2x4b96123
2x4b96123

and I like this COO.. I hope he gets to be CEO, if only because he doesn't give the -"this is a business"- spiel and incite the fury of gamers and developers every time he opens his mouth =D

erikvk
erikvk

Wasn't this guy from Microsoft about a year ago? Anyway, he seems to be a lot more reasonable than Riccitiello and especially people like Bob Kotick.

2x4b96123
2x4b96123

@ChiefFreeman Yeah.. sure.. next generation where Blu-Ray has become a larger standard, where dvd9's are feeling the squeeze already today... where download or internet restrictions affect a VERY significant amount of the gaming population.. not to mention how many people value having some kind of physical property for their purchase, how even with digital distribution the majority of full games purchased are still through retail. in all seriousness, next generation, discs will be king again as blu ray WILL be standard (at least between Sony and Microsoft consoles) as game development stretches it's legs to utilize the extra space available. I can't see waiting for a 30GB+ download to finish appealing to many people. Oh, and if Id Software's comments on either scaling down textures or going multidisk for the 360 version of Rage is anything to go by... then you can be pretty-well guaranteed that Doom4 will be on Blu Ray

nevryn
nevryn

This guy seems a bit more intelligent than their CEO John Riccitiello. Not only is he rational, he knows how to comment on a touchy subject (the A-B lawsuit), and express disappointment, without looking like a jerk. I rather hope they will hurry up and replace Riccitiello and this guy seems like he might be a good option.

Doomsong83
Doomsong83

@mf1986 Not to mention that you can get your account hijacked. Happened to me recently and still have heard nothing from Steam support.

mf1986
mf1986

i will always prefer shiny discs. steam is great but having the physical disc gives ya more options like, after 2 months of playing the game to death you can sell or trade it. but you cant do that with downloadable games

drangel_jam
drangel_jam

nice article, I agree with him 100%.

Shardz7
Shardz7

Quite a diplomatic response regarding the Infinity Ward case and probably a smart one at that. You don't need Kotex calling up your boss trying to get you fired for remarks you make during interviews. *laughs* Anyway...I think once the case is settled and the two fired developers walk away with their $36 million, Activader will have to face the shareholders and hopefully be greeted with pitchforks and torches to get that idiot out of the CEO chair. Regarding digital downloads versus retail products; it's already underway and the PC sections at stores are so small now that you could easily miss them and end up at a Twilight kiosk. It's quite alarming to see this in person, but so many are downloading their games now for cheaper prices than retail outlets that it's no surprise things went this way.

kahnmann
kahnmann

Guitarist, and what happens to your saved game when they shut down the servers that hold your saved games?

magicalclick
magicalclick

Shiny Disc = Collector Edition = awsome. Anyway, there are many perks from digital distribution, but obviously EA is not trying to compete with Steam yet. If everyone does their own digital distribution, the DD market will become a mess with too much competitors. I am sure they don't want that.

guitarist1980
guitarist1980

steam is awesome.. storing your saved games on the cloud is soo cool! Even if you switch computers or reinstall windows your games will be there and your saved files along with it no matter what! Thats really friggen cool.

tk9780
tk9780

The cost of manufacturing and storage of games that just don't sell in the amounts that have been forecast are the problem. I've never understood why retailer/manufactures haven't got together and started burning / printing Game Disk at the point of sale. There could be green environmental promotions like 'bring your own blank disk' and save $5.

Bardock47
Bardock47

I feel that if I have a disc I actually own that product. If its online it could be taken done or away (i'm a user of zune marketplace, and albms are shuffled alot, an example is I have two motorhead songs from one of their albums. When i started getting into them more they took it down and somehow I still have the two songs. Then on harddrive takes up more space. Theres something about actually holding an owned object that makes me feel like Its Mine.

zerobeo
zerobeo

shiny disc is the best, except for AC2 on PC

Blazingdragoon4
Blazingdragoon4

I do like having the physical disk a lot more than just downloading it onto my hard drive; just something about it feels better, since it is a tangible object that I have paid real money for, instead of spending money to get a virtual item. It also allows me to play the game on multiple systems, with things such as backwards compatibility, without having to worry about transferring data and all that jazz. And while it is sad that if a game isn't in the top ranked then it doesn't get bought it does kind of help thin out the ranks a tad. There is just so much dross, such absolute garbage out there for some systems (I'm looking at you Wii...) that it's nice to know that when we fork out the 60 dollars or more for a game that we are getting a quality product, because 60 dollars is a lot for our current economic crisis...

agturboninja
agturboninja

John Schappert. I remember him. He was the Runningback for the EA Sports Team in Madden 2001 and 2002. As a young child then, I thought he was a good football player.

mikey1611
mikey1611

I like a shiny disc better. Less complications. And with the BD, no disc swapping. Downloadable games, yeah awesome but with the PS3, games are huge! It'll take a long time to download plus it'll take a large amount of memory. The 'large amount' of memory is good for a BD because content, graphics etc. the 'download' will take too much time out of my PS3 not being played with and watching a bar that cannot "perform download in the background" Love that quotation. Shiny disc. @DirtyJ78 So, after a year you're gonna sell your digital downloads? And of course you can't resell them for much. It's secondhand, prices always drops with years to come and also with the fact, that you already ownED it. Plus I like seeing my PS1 next to my PS3 soon and also keeping the Sega Megadrive with the games looks like a great display.

ChiefFreeman
ChiefFreeman

I still think within 4-5 years time digital distribution will dominate, and I believe the big 3 will have download only game consoles for the next generation. They're already testing the waters with the PSP GO, Xbox LIVE's downloadable full games and Wii/DSi Ware. It's the future guy.

Riprock
Riprock

Besides backup, a shinny disc allows me to take the game with me when I play elsewhere, on another console or PC. Developers may not like this, but I can also loan my game to someone. You can't do that with an X360 Arcade game or most digital downloads. Sure you can take your X360 profile, but it's a bit of a hassle and it's only a part of the equation. The shinny disc provides greater flexibility and broader options. Of course, some don't like having all the packaging and discs on shelves (which take up room and can get lost or damaged). It depends on which model works better for you. But I don't see discs disappearing anytime soon either.

Bobzfamily
Bobzfamily

For me, having a game disc is like having a book. It's not the same reading without that physical piece of material in my hands.

Keiner
Keiner

@tinman81 I can see where you're going with your argument but, I don't think you 100% understand the point of DLC. Sure it would be great if it were free but then that woudn't make any sense in the long run. That would mean that the companies making this game or these add-ons are doing it for the sheer sake of it. Some would but ultimitely free doesn't pay the bills. The only way I agree with your furious hate passion against DLC is those "On launch" DLC. I see no reasoning behind just poping it into the disk before pinting the disks.

Helloiseeu
Helloiseeu

Those Infinity Ward guys should come up with their own company. They have the funds to start their own company plus, joining EA would be just as bad as when they were with Activision.

maverick_76
maverick_76

I personally like having a physical copy of the games I own, if anything happens to my PC I can always buy a new one and re-install the games very easily.

TheTHCGamer
TheTHCGamer

@tinman81 please find out more about how DLC works instead of just complaining about it just because your parents wont buy points for you. first of all a lot of companys create DLC after a game is released to keep that game fresh. besides no one is forcing you to buy games in the first place its a want not a need and that same thing applies to DLC. i love DLC if i want it and its going to make a game im enjoying last longer then im going to buy it. however if i think its a rip off i just dont buy it problem solved. its not like you need DLC to play a game am i right?

SopranosFan
SopranosFan

EA better not blame 1 missing Madden copy on used games. I know that I'm not buying a copy but that is because they charge extra for power ups and are now shutting down online game servers after 1 year.

JacksSmrkngRvng
JacksSmrkngRvng

Of course the publishers would want digital distribution. That means they can still sell us games for $60 without having to worry about the expenses associated with a physical disc, cases, distribution, and most of all, the cut the retailer gets. Someone on operationsports.com posted an interview with an EA exec where he stated EA wants to move to digital distribution because of the effects that the used market and rental services have on sales. If I buy Madden new, trade it in a month later or resell it, EA gets only the revenue from my original purchase and not how ever many people purchase the game after I got rid of it. With digital distribution, that is not possible. He also commented on how important it is for devs to keep releasing additional DLC to "keep the game fresh". Let me translate, more like releasing things that should have been included anyways but they chose not to so they can continue to syphon more money from our pockets. Of course, it escapes the realm of logic for certain developers that if they make a high quality game to begin with, people will keep it. Try finding a used copy of a high quality game like MLB The Show then a used copy of MLB 2K. I still have my copie of MLB The Show from back to 2007 whereas I traded in my copy of Madden by mid September.

inaka_rob
inaka_rob

[This message was deleted at the request of the original poster]

tinman81
tinman81

[This message was deleted at the request of the original poster]