So here’s the two big lessons on today’s news (read here and here) that Electronic Arts (ERTS) is posting a quarterly loss, forecasting a net loss for the 2008 fiscal year, and worst of all for gamers, delaying the much-anticipated Will Wright game Spore, previously scheduled for release this year, to April 2008 or beyond:
– Publishers who underestimate the Wii’s broad appeal are bound to suffer.
– Publisher who tie their fortunes to the production schedule of a genius are in for a lot of pain.
EA has relied far too much on endless spinoffs of their sports/racing titles (Madden, FIFA, Need for Speed, etc.) that mostly appeal to young men, the domain of the Playstation and Xbox. This almost certainly pushed EA to misjudge the far wider attractiveness of the Wii, and fail to deliver a large library of games for the Nintendo console’s demographically diverse audience. As Janco analyst Mike Hickey put it to Bloomberg: “The hot console was the Wii, and they weren’t in alignment in producing software,” for the system.
At the same time, Electronic Arts has long given the star treatment to Wright. On one level, that’s totally understandable: he’s one of the few undisputed auteurs of game design, and his Sims series remains the most popular PC game franchise ever. But he’s acclaimed in great part for his perfectionism and vision, and those two qualities don’t usually translate to delivering products on time and on budget. So it was strange that EA had pinned so much of their company’s bottom line on Spore– something I noted last year. (Stranger still that this isn’t the first time EA has done this, tolerating long delays and cost overruns for Peter Molyneux’s Black & White.) As with reputed film directors, game designers with star power (or “game gods”, as the fanboy press dubs them) are traditionally allowed to miss deadlines and go way over-budget, which seems to be the case here; as with the movie industry, this usually translates to corporate pain. In this particular scenario, it means taking Spore out of their financial projections into March ’08, and suffering a stock dip of 3%. Unfortunate for EA shareholders– and all us Wright fans.
Spore screenshot courtesy Spore.com.