*Electronic Arts* COO John Pleasants cut to the chase when he was asked about the poor performance in 2008 that sent the gaming giant's stock down to its lowest point in more than seven years: "The biggest thing was that we didn't make hits." Pleasants told Goldman Sachs Technology and Internet conference attendees that the company assumed that new franchises like Dead Space and Mirror's Edge that it released in the latter half of the year were going to be profitable; the problem was, not enough gamers wanted to buy the games.
Focus on fewer, better games in '09: To deliver better, "top-10" titles, Pleasants said EA has reduced potential titles by about 20 percent. It's an about-face from a strategy that ramped up game releases by about 30 percent in recent years. "You can lose your way on basic execution when you have too many games," he said.
Cut costs everywhere except marketing: EA is in the process of laying off 1,100 employees, but Pleasants said marketing was the "one line item on our P&L that's increasing. We're reducing on other items, but we have titles that we want to have hit." He said the company looked back at three years of sales and marketing data and found that it wasn't spending enough on marketing at the right times, or through the right channels.
Leveraging the web: "The game-development process has evolved, so the marketing should as well," Pleasants said. "It's less about 'We have an idea, we go away for 24 months and spend $30 million working on a game, then put a little buzz out there and hope it works.' We need to have a dialogue with the audience, take a longer lead time and make sure we have the right mix of digital and traditional."
By Tameka Kee