Electronic Arts' Chief Creative Officer (pictured), in an interview, said that Sony and Microsoft, "nearly expired crossing the finish line as they launched their consoles," and don't want to build the next generation any time soon.

"I expected we'll see a PlayStation 3.5 before we see a PlayStation 4 and an Xbox 560 before we see an Xbox 720," Rich Hilleman told Dean Takahashi and VentureBeat."The biggest shift is how fast packaged goods games are changing and going away."

That means online distribution. And by that, he means mobile gaming, and delivery of mobile games. Hilleman pointed out that with the DS, PSP and PSPgo, and iPhone, mobile units outnumber consoles two-to-one. The iPhone especially is part of the "democratization of game development," both increasing competition for EA, but also lowering development costs.

On the console side, Hilleman blameed piracy and used sale for what he says is the end of games' long tail. But, he said, markets like Korea show there's plenty of growth upon which a corporate behemoth may feed.

"If I want to go to see the past of gaming, I go to Japan," Hilleman told Takahashi. "If I want to see the future, I go to Korea." There, he says, are 28,000 parlors where Internet gamers pay by the hour, and the establishments reap high margins off of concession sales. Hilleman also pointed to Webkinz as a forward-facing brand, less so Burnout, where 2:1 ratio of users to games sold makes apparent the influence of used sales and piracy to a publisher's bottom line.

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Also of interest in this piece: Takahashi's back-of-the-envelope calculations based on the idea that EA typically spends two or three times as much on marketing and advertising as it does on developing a game.

That's because advertising is critical to getting a game in the top ten rankings. If you have a $10 million game, don't be surprised if the the TV advertising costs drive the ad budget to $30 million. If a $60 game yields revenue of $35 for EA, then (according to my math) the company has to sell 1.1 million copies just to break even.


EA'S Chief Creative Officer Describes Games Industry's Re-Engineering [Venturebeat via Blue's News]