Q&A: EA Downloader boss Chip Lange
Electronic Arts dips its toes in the digital download stream. Will game distribution ever be the same (and will retailers ever forgive EA)?
For a company that usually has few qualms about promoting itself large, the launch of Electronic Arts' Steam-like download service, EA Downloader, was accompanied by unusually little fanfare.
The service was tested under guarded conditions. Non-EA staff who participated in the beta were pointedly asked to tell no one of the service. And when Downloader finally went live, it did so with zero press--it wasn't until the day after the Downloader servers were live that the publisher sent out a press release announcing the more-than-a-year-in-the-making service.
Why the quiet launch? "We wanted to make sure the service met our quality standards and could handle the demand before we went out with a loud launch," an EA staffer told GameSpot. "Better to succeed quietly with great customer experience first, then build up attention and momentum."
Currently, the Special Forces add-on for Battlefield 2 and The Sims 2 Holiday Party Pack are the only two options available via Downloader.
Does a service such as Downloader portend a shift in the traditional brick-and-mortar value chain? Does it suggest a day when retailers become unnecessary? Not specifically, but with estimates of at least half of all Half-Life 2 units sold reaching gamers via Valve's Steam service, one can start to see new lines being drawn in the sand--lines that might one day exclude retailers who hold fast to the traditional value chain of selling boxed games in strip malls and megastores.
In fact, one story floating around the industry is that shortly after Valve launched Steam, retail giant Wal-Mart flew a number of its game publisher partners into company headquarters where execs explained in no uncertain terms their displeasure with the direct-to-consumer service. Publishers who consented to the trip were cautioned against creating a similar service.
We asked EA vice president of online marketing and Downloader lead Chip Lange (who was formerly the vice president of EA Sports Nation) for some background on the new service--and why retailers should embrace it rather than fear it.
GameSpot: Be honest now. How mad are retailers with this new download service?
Chip Lange: We have discussed this with retail every step of the way.
CL: They are concerned, but at the end of the day, the retailers believe that if this community is thriving, sales across the board for these franchises are going to go up and grow the market, not replace the market.
GS: Do you agree?
CL: We certainly believe that to be the case with the first products--the way that that product gets executed is by buying a box at retail. What we're doing is allowing more packaged goods to be sold at retail by facilitating the sale of expansion packs in any variety of distribution formats.
GS: Today, code chunks, tomorrow the full-featured game.
CL: Right now, the Downloader is providing incremental content; you have to buy the baseline SKU at retail.
GS: Is there a timeline for selling full-featured games?
CL: There's not, for all of the reasons that you've stated.
GS: Can you explain?
CL: Our business is a retail-driven business. And we all lose if the retail business dries up. So, we are in the business of figuring out how to make content that our studios are creating more robust sellers.
GS: Is there an upside from a marketing perspective?
CL: I think any time you give your customer choice, that's an upside from a marketing perspective. And the Downloader is in response to a relatively overwhelming outcry from our customer base to not be reliant exclusively on CD-based delivery. So I find anytime you add choice to a customer's menu, it's a win.
That's the first upside from a marketing standpoint. The second upside is we've got all these relationships with our customers that we've been fostering over years. This really gives us a chance to do more things to activate that community.
GS: Can you elaborate?
CL: Active communities where consumers are engaged and contributing, and where the consumers have an emotional connection with that location or that content, creates a more vibrant entertainment business. All of a sudden, the community becomes a place where people want to go. They'll buy the products at retail, and then they participate in the community. People will download new content, which supports those products that [were previously] bought in different ways. Having an active and vibrant community is one of the best recipes for having an active and vibrant sales curve of your product .
GS: Will Downloader ever become a sales point for games from developers outside the realm of EA?
CL: The online world changes a lot. I haven't talked to any specific publishers, but we have a copublishing unit inside of Electronic Arts and one of the things that we're bringing to the market [are products from] developers who don't have a publishing organization. [They] look to leverage EA's publishing muscle to get their product to market. The Downloader is another tool in that arsenal.
GS: What is the overall scope of EA Downloader?
CL: Well, I think there's two answers to that question. One has to do with the Downloader client itself, the actual application that you download onto your desktop and its specific design. It's designed to allow us to give customers the ability to pull EA content onto their desktops in a form that they choose and in a convenient fashion. That's the current scope of it.
There's another answer to that question, which is really EA's online initiative in general, which is looking to leverage tools like the Downloader to take advantage of preexisting communities like Xbox Live.
In the future, there may be a console equivalent to Downloader, but how do we take advantage [of that] and build content, and what can we do to take advantage of all the tools we have in the online space to create that community that serves all of our different customer bases in a variety of different places. The Downloader is one tool that is going to play a very key and strategic role in that overall mix.
GS: How much of a distribution point do you see Downloader becoming for console games?
CL: That's a hard question to answer because nobody knows what one of the big console company's online future strategy is. Sony. Everybody's got kind of a wait and see [attitude]. We will be a big participant in the PlayStation 3, and that's going to mean content that's going to have to flow to the users. They're going to demand it. How those users are served content is an ongoing conversation.
GS: And Xbox?
CL: Xbox has got a vibrant marketplace right now in the 360. EA has got some of the top-selling content. Again, I go back to this "give customers choice." I'm a Niner fan and I want to download the Niner game off of the Xbox Marketplace and now my entire Xbox is tricked out looking like 49er stuff. And that's cooler than the stuff that I got out of the box.
We've heard a lot of positive feedback that this ability to customize a player's experience is a big win for the console and right now, we're building content that goes through that pipeline, how the Downloader evolves over time, to be able to give customers choice on how they get that content.
GS: Big talk for the future, but what's your agenda today?
CL: My biggest mission on Downloader to date has been to put something in the marketplace that lives up to the quality standards of our demanding customers. We didn't bite off something so big it would fail. And, you know, when you look at all the different major initiatives that have been launched in our industry online, almost all of them fail at first. I'm proud of the fact that Downloader actually worked for 95 percent of the customers that tried it.
GS: Is there DNA from EA.com (the games portal developed in partnership with AOL back in 2000) in Downloader?
CL: Everybody is fast to dismiss EA.com as a universal, unilateral disaster, but one of the greatest things about EA is that we were able to finance projects like EA.com and survive. There were a lot of good things EA.com did and there were a lot of mistakes that they made. The good news is that those mistakes didn't take our company out of business and we were able to institutionalize that learning and apply it into our future business plans.
GS: Overall, how do you think this current wave of digital distribution is going to change the overall landscape of the retail value chain?
CL: I think it's going to do a couple things. One thing is I think it's going to grow the market. Anytime you give customers choice, they'll reward you with commerce. Second, it's going to force everybody who's in that value chain to develop a solution to this emerging distribution channel.
If you're in the distribution business and you ignore your customer's demands, that's a mistake.
A good example is Napster and Apple. Customers were demanding the ability to download music on a song-by-song basis. By giving the customer a legal option on how they could take what they want at a fair price, Apple built a new company around it. I think that's going to happen here. I think giving the customers the ability to download product legally in a format that they have been demanding is a win for the industry. Everybody who's involved in that value chain is going to need to have a strategy in this space.
GS: Is the geographic scope of Downloader US-only or is it global?
CL: It's a global effort. You can buy the Battlefield product digitally in Europe.
GS: In terms of just raw numbers, are you tracking how many downloads you are serving?
CL: Where do your numbers stand?
CL: We're really happy with them, but we never release numbers on sales.
GS: Finally, what's a sports expert doing in the direct-to-consumer download space?
CL: I'm a man of many interests. One of the interests that I have is online sports gaming, online gaming in general. I am fascinated by online communities and the way in which you can enable those communities to do cool things. So I took a step and tried to put my money where my mouth is and now I'm trying to build a cool online sports bar.
GS: Sports bar?
CL: When I say "sports bar," I mean a place to hang out where I'm comfortable. I know I'm going to be surrounded by things that I like. I find sports bars--whether I want to go play a game of pinball, whether I want to go watch the Niners game, whether I want to talk to my buddy and check my Fantasy scores...those kinds of locations--facilitate that. And I don't see any reason why online shouldn't be the same thing for sports fans, but also for fans of any type of activity, right?
Plus, I got tired of feeling confined by the limitations of the CD platform. Does that make sense?
GS: Sure does. Good luck with Downloader.
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