Echoing rumours that next generation consoles will be capable of locking down a disk to a single owner and disrupting the pre-owned marked, EA’s CFO Blake Jorgensen has spoken out regarding his personal views on where consoles are heading, and how EA are positioned.
During a question and answer session at the Goldman Sachs Technology and Internet Conference in San Francisco, Jorgensen said that EA’s range of “ten to fifteen” titles will be released as next-gen games in stages, over the next two or three years. “Our goal is to keep the cost increase for R&D under $100 million,” he said, “and some of that will be in this year, some of that in ’14, and some in our fiscal year ’15.”
He doesn’t see a huge transition in the customer base, either. At least not at first. “The reality is, is that fiscal year 2014 will still be a fairly large gen-three [PS3 and Xbox 360] if there’s a console business that comes in at the tail end of the year, mainly because a lot of our titles are built around sports calendars.”
“And so a FIFA, a Madden, an NCAA, an NHL title, all come out aligned with the sports calendar.”
He also says that the PS4 and Xbox 720 aren’t likely to be backwards compatible, something we’ve heard a few times over the last few months.
“So if you’re a FIFA player and, and the soccer season’s starting in August, and all your friends are playing FIFA, you’re going to want to be on the same box that they’re on,” he states. “So if they all go out and buy a gen-four box if it comes out at Christmas, then you’ll most likely do it.”
He confirms that (as you’d expect) EA have seen both the PS4 and 720, but adds that “no one externally has really seen what the look and feel will be like on the new consoles”, before saying that he thinks “people are going to be pretty excited.”
“I do think once again without describing the new consoles, you’ve got to assume they’re going to be highly integrated into the living room and the house, and there will be a lot of capability for interaction,” he says. This points to both future consoles being all-in media devices as well as machines capable of playing games.
And on the subject of pre-owned games? “Would we like to sell everything at full price and not have a used game market?” he asks. “Sure. But I think the used game market’s a little like any other kind of market where it creates liquidity. The fact is, that liquidity benefits us in some fashion. So if someone goes in and trades in a game, there’s a good chance they’re going to buy another one of our games.”
“I can’t really comment on where the next generation boxes are going to be relative to used games,” he says, concluding. “I will say that the trend in the business is to have that always-on connectivity and connect with a customer, and to the extent that the software identifies a certain customer is going to create some issues going down the road in the used game market.”
“But I do believe that the consumer likes it, and it’s been good for the retail channel.”
Whilst Microsoft hasn’t yet announced any plans, Sony are expected to showcase the PlayStation 4 next Wednesday in New York. We’ll be there, bringing you everything as it happens.