Challenging everything

You'll play a strategy both business and philosophical that says there's going to be snags, there's going to be problems, there's going to be shortages, because we've done this enough times. This company's 23 years old and we've been through a lot of cycles - there's always, always a stumbling block, whether it's a manufacturing problem or a transportation problem, or there's just too much demand.

There's always a problem. We saw it with the PlayStation 2, we saw it with the Xbox; it wasn't that long ago that everyone was saying where's the Xbox 360, you just couldn't find them in retail in late December, January, February last year, and they seem to have recovered nicely.

There are always stumbling blocks, so if you're a veteran of this industry, you learn to forecast these numbers in the belief, let's be practical about what we're going to get here. If for some reason they do something that nobody's ever done before, which is launch a console without any problems, then we'll certainly see the upside in the forecast. But we're not going to get caught on this thing. It's about being practical from both a philosophical and a financial perspective.

Well first off, I disagree. I know you know this industry and I know you know games really well, but we typically hear that question from people who don't understand games, and come from a motion picture mentality. It's because in the motion picture business, usually the sequels stink. In the videogame business, sequels - certainly by the time you start getting into three and four - are in fact pretty good, or they wouldn't be sequels.

If you look at Grand Theft Auto or something - do you even know anybody who played GTA 1 or remembers it? Or GTA 2? It was Grand Theft Auto III that blew the roof off the entire industry, and the culture for that matter.

With iterations and sequels in videogames, there's a huge loyal audience that really likes it, and one of the reasons that they come to like a franchise is because typically, there's a lot of innovation within each one of these iterations. So I dispute the idea that Dead or Alive 3 or Halo 3 or something like that are inherently not as good as the originals; that's motion picture thinking, that's not videogame thinking.

As far as EA goes, the only other thing I'd add to that is, you know, FIFA - we put out a FIFA game every year. Every year, just based on the technology and the understanding of developers, those games get better, incontestably. Whether they get better by 50 per cent or 100 per cent is a matter of speculation - I'll leave that to reviewers - but they get better every single year. Tell it to FIFA, because they've got a new season every year; they're not going to skip a season because they think everybody's tired of football, for crying out loud.

A couple of things are driving original IP at EA, and as always at EA, simple economics are at the root of this. If you start with the consideration that when new platforms launch, the first five million 360s, the first five million PS3s, for that matter even the first five million Wiis are going to be purchased by the hardest of the hardcore fans. They don't like James Bond, and most of them don't like Harry Potter and things like that. There are huge audiences for those games, but typically not within the universe of people who buy the first five million units of a new piece of technology.

What they like is this really freaky game IP which is weird and twitchy and really is made for people who grew up on games, and don't need to approach a game from a motion picture mentality or a book mentality. They love game IP, and they understand it. Now is the time to introduce that, when these people are coming to these systems.

And if you can get them to adopt it, then when the next five or 10 or 20 or 50 million people pile into these new hardware systems, then that will be the standard - you've got to buy Halo, or from the EA side, you've got to buy Army of Two, because there's a game that defines the 360 or the PlayStation 3. It's good for those consumers, it's what they want, and it's extraordinarily good business because it allows you to create new franchises without licensing fees associated with motion pictures and stuff.

That said, three or four years from now, when the price of the 360 has migrated down to £140 or something - I'm guessing - then, because younger people have them, games like Potter are going to be extraordinarily popular. That first Harry Potter game sold nine million units, a shocking number. Guess what - we didn't put it on PlayStation 2. It was on just PSone and the PC in the first year of PS2. The reason why it sold so well was because as big brother got a PlayStation 2, they didn't throw away PSone; little brother got the thing, and boom, Harry Potter. So if you're smart, you manage your portfolio that way.

New IP is really easy to measure at EA, because a year ago, a little over 30 per cent of all of our games, all of our revenues, were based on wholly-owned intellectual property - things like The Sims, which we own and don't pay licensing fees for. Today it's a little over 40 per cent. The goal at EA is within the next year, maybe year and a half, the percentage of revenue and the percentage of games which are based on EA-owned, non-licensed properties goes over 50 per cent. So come back in a year and I'll tell you exactly where we are...

It sounds a bit trite, but there's the expression a rising tide will lift all boats. I hope that there are competitors. I hope that Take-Two survives the problems that they've got. I hope that there's another GTA out there, that someone comes out with these fantastic games that makes everybody feel they've got to buy a 360 or a PS3, because everybody's playing that game.

I hope that EA's got that game, but to the extent that something unique's going to happen, I hope that when lightning strikes there's a brand new company that does that.

Before I came to EA, I worked for the Pepsi-Cola company, and there was a real us-versus-them, and there was only two people in the universe. And every time somebody bought a bottle of soda that wasn't Pepsi, we lost to the other side. It's just not like that in videogames - a great Halo or a GTA or something like that actually sells copies of Need for Speed, it sells copies of FIFA. I hope that there's somebody out there making fantastic games that just explode with prosperity.