Electronic Arts Pledges Platform Independence; Well Prepared for a Possible Console Transition
During Electronic Arts’ Investor Day, Chief Financial Officer Blake Jorgensen talked about the publisher’s stance on platform independence.
Jorgensen mentioned that the company looks at the issue simply as being able to address technology changes very quickly, and they feel like they’re the best in the industry at it. That also helps them minimize the cost of transitions that they had in the past, and invest in the future.
Whatever they build, including virtual reality, will be built on the Frostbite platform, so no matter how tech evolves, the publisher will be able to be there.
Platform independence also helps in diversifying revenue sources, and that makes revenue less dependent from the release of big titles.
Jorgensen explained that while the market grew with every console generation, the dip between them has always been a problem.
Withfollowing console generations, that dip was less problematic due to the diversification of the business and the inclusion of live services in the revenue stream.
The cost of research and development also grew towards the transition between the PS2 generation and the PS3 generation, to 31% of the revenue from a 22% in the era of the first PlayStation. That was “fairly painful.”
In the last console transition, the percentage has gone back down to 23%, and today it’s under 22%. There is far less impact from the point of view of costs because the company has moved almost to a single engine.
By the time the next console transition will come, if there is one, Electronic Arts doesn’t believe there will be any impact, because they will have a single engine, which is why they don’t spend too much time worrying about the next control transition. They aren’t sure if there’s going to be one, but if there is, they’re well prepared.