Business
3:37 am
Fri May 4, 2012

Game Giant Forced To Play Catch UP

Originally published on Fri May 4, 2012 6:57 am

Transcript

DAVID GREENE, HOST:

It's MORNING EDITION from NPR News. Good morning. I'm David Greene.

Video game fans hear this often. EA Sports, it's in the game. Well, now America's largest game publisher is trying to stay in the game. EA, Electronic Arts, built a gaming empire with a strategy straight out of Hollywood - big names and big budgets. But the market is changing. For one thing, more players now prefer games you can play online. And so the Silicon Valley company has been forced to change as well. KQED's Aarti Shahani reports.

AARTI SHAHANI, BYLINE: Electronic Arts is a time capsule of the gaming industry. In the corporate lobby, an arcade full of games.

(SOUNDBITE OF VIDEO GAME)

SHAHANI: Bullets flying in Aliens Extermination. For sports fans, PGA Golf and Madden NFL. With surreal graphics, hundred million dollar budgets, Hollywood actors and pro athletes voicing characters, these titles turned the company into a global empire. But CEO John Riccitiello admits the deluxe model is a thing of the past.

JOHN RICCITIELLO: We would like to be number one in every possible area and every geography. That's a grand ambition. We're not there yet.

SHAHANI: His company's been losing ground to competitors, posting losses for years now. A falling stock price is just about the only thing he can count on. The new frontier is social, and Riccitiello is late to the game.

RICCITIELLO: When it comes to Facebook, while we're number two, I'd say we're a distant number two. I mean the other guys have lapped us three times.

SHAHANI: By other guys, he means Zynga. The start-up proved that for a tenth the cost you can make low-grade YouTube quality games with double the return on investment. Zynga tracks users and polls them to design experiences that are addictive. Its trademark isn't love of great games, so much as genius in using data to build online networks. Riccitiello is torn about this.

RICCITIELLO: The companies that are focused exclusively on social games think of themselves as data companies, sort of analytics companies. They're not really in the entertainment business. I think that will eventually die. Consumers want to be entertained. They don't want to be data-managed.

SHAHANI: That said, Riccitiello's betting the house on data management. Seems the market demands more than minor tweaks. The blog Startup Grind reports that Riccitiello's getting ready to cut up to a thousand jobs. Riccitiello won't confirm or deny this. He will say that while right now just one in six employees is an engineer, he plans to make it one in two. For the first time, he's hired a companywide chief technology officer to lead this change. Rajat Taneja has to bring engineers and big data to the game giant, and...

RAJAT TANEJA: Apply techniques like machine learning and neural nets to figure out what will happen next, so that we can tailor the game and the experiences to delight our customers.

SHAHANI: He wants to out-Zynga Zynga. Don't just scientifically poll. Use artificial intelligence, predictive modeling, to anticipate user desire. And build a global platform on the cloud for Electronic Arts citizens to play the same game with joysticks or smartphones.

(SOUNDBITE OF PHONE RINGING)

SHAHANI: Taneja's standing in front of a giant flat screen outside the executive offices. It's live-streaming numbers about the 300 million Electronic Arts users across 20 titles. The same screens are up in Mexico, China, Spain, Austin, Texas. In each of these data centers, employees monitor bugs and take calls from distressed gamers.

UNIDENTIFIED MAN: Network operations, Johnny. Yes, we're...

SHAHANI: Michael Mateas, a professor at UC Santa Cruz, is training the very engineers who'll end up here. He says Riccitiello's move is a signal for the entire industry.

MICHAEL MATEAS: There's been a move over the last decade towards mining really large data sets, being able to find patterns in it and do forms of science that wouldn't have been possible before. Game design as a discipline is starting to catch on to big data.

SHAHANI: Starting to catch on? Zynga's lead engineer, Kostadis Roussos, says Electronic Arts is behind the curve.

KOSTADIS ROUSSOS: We've spent three, four years building this infrastructure. And we already understand a lot of the problems in this space. You know, I'm not trying to be dismissive. It's just that we haven't found people in the gaming industry who do this.

SHAHANI: Electronic Arts has enough cash in reserves to do this - trial and error - for quite a while. Question is: Will the strategy help them pivot from defense back to offense?

For NPR News, I'm Aarti Shahani. Transcript provided by NPR, Copyright National Public Radio.

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