More Hosannas for EA?: Wii'll See

Barron's just put up a story on Electronic Arts, with the take-away being that the stock is cheap, management makes all the right moves and quoting several analysts who support this view. Bully for them. Question is, based upon all the recent data that's out there concerning the Big 3 console makers, their sales performance and the unique user experience of the Wii that has captured imaginations (and fueled eye-popping console sales) all over the world, is there a new paradigm in gaming that will substantially impact the game development landscape?

Right now, gamers all over are turned on by the Wii's simplicity, its ease of use, its lack of button-mashup-required gaming skills and, well, its raw and physical fun. I'd posit that whichever game maker's offerings best embody the essence of the Wii's capabilities for all-out entertainment might set off a virtuous cycle of riches:

• A unique gaming platform; which provides a
• Great gaming experience; supported by
• Great games; which fosters
• Strong game sales; that begets
• Strong console sales; which facilitates further investment in the
• Unique gaming platform, etc., etc., etc.

And the engine of this virtuous cycle will be sports games. Who can best bridge this gap between new-age console and the best sports experience? EA? 2K? Nintendo itself? Consider that in Japan (its home market, where it doesn't come for free), Wii Sports is the number one selling game. That said, it's baseball look-and-feel is not up to the standards of, say, 2k. However, 2k isn't coming out with a baseball game for the Wii this year. And EA hasn't come out with MVP Baseball since 2005. So there is clearly an opening for someone to step up and develop a killer MLB baseball game for the Wii. Certainly Wii Tennis and Bowling are a blast and rock the house, but baseball... Something more is needed here. But who?

Certainly EA is hip to the jive when it comes to Madden football. Consider this online survey from EA concerning the Madden NFL 2007 Wii and the questions they're asking:

• The game got a good review
• I like playing competitive sports games with my friends
• Not many Nintendo Wii sports games available
• I saw it at the store
• I like EA SPORTS games
• I wanted to play a team sports game
• I like playing football
• The game was recommended to me
• Looking for a different Madden experience (than PS2 or Xbox)
• I buy it every year
• I like playing football videogames
• I like watching football
• I received it as a gift
• Other (please specify)

Good questions. Smart questions. As noted in the Barron's article, EA is smart and has a history of success behind them. That said, the Wii is different. The user experience is different. Materially different. And as noted in my previous posts on the topic, it is difficult to be all things to all people and be the leader across all platforms. Something has to give. And neither I (nor the Internet) are saying that the Wii is the uncontested winner in the latest manifestation of the "console wars" or that EA is out of it because of their slow start in Wii game development. But what I am saying is that risks and opportunities are high, and this volatility of outcomes needs to factored into valuation models for EA and all the game makers writing for multiple platforms. It's sure to be an interesting ride.

For reference - previous posts on EA:

02/10/2007: From Inside EA: Buy Xbox 360 and/or Wii - NOT PS3

02/08/2007: EA Revisited: Playing Catch-up on the Wii, Waking up to the Failure that is PS3

12/07/2006: Update on Sony, EA and Nintendo: The Internet Got it Right

11/21/2006: EA: "Why Didn't Wii Focus on Nintendo?"

Comments

[johnny]

For a great example of the new breed of applications for ENTERTAINMENT consoles,
see www.finetune.com/wii.

It's paired with a great website that allows you to personalize playlists and then play them through your Wii.

Great web 2.0 interfaces...I can't wait for the rest of the Wii applications.

[Justin Patterson]

2K Sports holds the license to the MLB. Hence, EA has shifted its focus to college baseball.

[robpas]

EA is coming out with NCAA Baseball -- but if I can't bat as Albert Puljos what fun is it. NCAA college football is cool, but then again -- the audience for College Football is much bigger than College baseball. So I'd say with no MLB type product for EA this year -- they have given up ground to 2K, yet again.