EA Detail on "Gamers Love Microtransactions"
We've been over the transcript... it's dull... consumers don't love it.
The gaming news Internet is full this afternoon with people bemoaning a quote attributed to an unnamed EA executive speaking at the Morgan Stanley Technology, Media & Telecom Conference yesterday. We've searched the transcript, we're stumped.
The quote being bandied around is: “We’re building into all our games the ability to pay for more, to unlock faster… trucks, levels, etc. microtransactions. Consumers love that." It doesn't actually seem to exist. The truth is a deal more dull in fact.
Now, the quote being used comes from the usually lovely PlayStationLifeStyle. It says that, "What is quoted is from EA’s CTO Rajat Taneja and Electronic Arts Chief Financial Officer Blake Jorgensen, and some of what has been said has been shortened and paraphrased for clarity."
So, we went over the transcript (that can be found here) and we came up with this:
Blake J. Jorgensen - Chief Financial Officer and Executive Vice President, "The next and much bigger piece is microtransactions within games. And so to the extent that, as Rajat (Taneja - Global Chief Technology Officer and Executive Vice President) said, we're building into all of our games the ability to pay for things along the way, either to get to a higher level to buy a new character, to buy a truck, a gun, whatever it might be, and consumers are enjoying and embracing that way of the business...."
The quote continues (it's in full at the end of this piece) to detail how EA is now insourcing all its payment methodsZzzzz... anyway, yes, the company is putting microtransactions into all games, PSLifestyle is correct to requote that.
But frankly, who the hell isn't putting microtransactions into all its games?
Oh, and the thing about Sony and Microsoft 'aligning' their console releases that is also being quoted:
"And then last but not least, assuming that Sony and Microsoft are more aligned in their timing -- last time they weren't (and) that made it more difficult for a transition and ran the costs up..." is what Blake J. Jorgensen actually said.
Note Full Quote: "Yes, so the digital business is broken up into a couple of pieces. One is pure digital downloads of full games. So someone buys Battlefield and downloads it onto their PC or their console. That business goes up and down based on the title. So in a Battlefield quarter, you're going to have a lot of that business. We had a lot of that 1.5 years ago, less so this quarter because of that comparison. The next and much bigger piece is microtransactions within games. And so to the extent that, as Rajat said, we're building into all of our games the ability to pay for things along the way, either to get to a higher level to buy a new character, to buy a truck, a gun, whatever it might be, and consumers are enjoying and embracing that way of the business. We've got to have a very strong back-end to make sure that we can operate a business like that. If you're doing microtransactions and you're processing credit cards for every one of those microtransactions, you'll get eaten alive. And so Rajat's team has built an amazing back-end to be able to manage that and manage it much more profitably. We've outsourced a lot of that stuff, historically. We're bringing that all in-house now. The other piece of that puzzle is the mobile business itself. Playing games on a tablet or a mobile phone, smartphone, that business has evolved very quickly. It's become a very large part of our business and it's either an extension of existing franchises or new franchises. So The Simpsons, for example, is a free-to-play game, leverages, obviously, The Simpsons TV show, and you pay all along the way. Last quarter, we did over $25 million in Simpsons business alone. So there's an opportunity there, probably smaller opportunity on a per title basis than something like a FIFA or a Battlefield. But, as Rajat said, it's a place that's actually growing internationally as well for us so it helps to extend our business into Asia, which has not been a big console market over time."
The quote being bandied around is: “We’re building into all our games the ability to pay for more, to unlock faster… trucks, levels, etc. microtransactions. Consumers love that." It doesn't actually seem to exist. The truth is a deal more dull in fact.
Now, the quote being used comes from the usually lovely PlayStationLifeStyle. It says that, "What is quoted is from EA’s CTO Rajat Taneja and Electronic Arts Chief Financial Officer Blake Jorgensen, and some of what has been said has been shortened and paraphrased for clarity."
So, we went over the transcript (that can be found here) and we came up with this:
Blake J. Jorgensen - Chief Financial Officer and Executive Vice President, "The next and much bigger piece is microtransactions within games. And so to the extent that, as Rajat (Taneja - Global Chief Technology Officer and Executive Vice President) said, we're building into all of our games the ability to pay for things along the way, either to get to a higher level to buy a new character, to buy a truck, a gun, whatever it might be, and consumers are enjoying and embracing that way of the business...."
The quote continues (it's in full at the end of this piece) to detail how EA is now insourcing all its payment methodsZzzzz... anyway, yes, the company is putting microtransactions into all games, PSLifestyle is correct to requote that.
But frankly, who the hell isn't putting microtransactions into all its games?
Oh, and the thing about Sony and Microsoft 'aligning' their console releases that is also being quoted:
"And then last but not least, assuming that Sony and Microsoft are more aligned in their timing -- last time they weren't (and) that made it more difficult for a transition and ran the costs up..." is what Blake J. Jorgensen actually said.
Note Full Quote: "Yes, so the digital business is broken up into a couple of pieces. One is pure digital downloads of full games. So someone buys Battlefield and downloads it onto their PC or their console. That business goes up and down based on the title. So in a Battlefield quarter, you're going to have a lot of that business. We had a lot of that 1.5 years ago, less so this quarter because of that comparison. The next and much bigger piece is microtransactions within games. And so to the extent that, as Rajat said, we're building into all of our games the ability to pay for things along the way, either to get to a higher level to buy a new character, to buy a truck, a gun, whatever it might be, and consumers are enjoying and embracing that way of the business. We've got to have a very strong back-end to make sure that we can operate a business like that. If you're doing microtransactions and you're processing credit cards for every one of those microtransactions, you'll get eaten alive. And so Rajat's team has built an amazing back-end to be able to manage that and manage it much more profitably. We've outsourced a lot of that stuff, historically. We're bringing that all in-house now. The other piece of that puzzle is the mobile business itself. Playing games on a tablet or a mobile phone, smartphone, that business has evolved very quickly. It's become a very large part of our business and it's either an extension of existing franchises or new franchises. So The Simpsons, for example, is a free-to-play game, leverages, obviously, The Simpsons TV show, and you pay all along the way. Last quarter, we did over $25 million in Simpsons business alone. So there's an opportunity there, probably smaller opportunity on a per title basis than something like a FIFA or a Battlefield. But, as Rajat said, it's a place that's actually growing internationally as well for us so it helps to extend our business into Asia, which has not been a big console market over time."
Companies:
Electronic Arts
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