Monday, July 7, 2008

EA Gets It: It's About the Customer Edition


While most publishers' direct customer knowledge is limited to the names of the few customers who register the games on line, or log into a website for previews, EA is truly getting to know their customer – and everyone else’s. They have been tracking on-line play of their own games better than any other publisher for a while. Now with the acquisition of Rupture, they are on course to capture, understand and exploit the game habits of other publishers' consumers. EA's history points to how nicely Rupture fits into the strategy.

The company was the last hold out from Xbox Live. While the other publishers were jumping on, EA was objecting to Mirosoft's central control business model. Then CFO, Warren Jenson, went on record saying it just didn't make sense. Sony had the opportunity to leverage the discord into a relationship which would define the on line nature of the next gen platforms, but held true to its laisse a faire position. Eighteen months after the launch of Live, EA came on board. Rumors attributed the move to everything from lowered path charges, to EA subservers within Live, to cancellation of Microsoft sports titles. It turns out, EA didn't need any of these - well, lowered path charges on Live enabled titles wouldn't hurt - if it is true. Well into the life of Live, the started leveraging data which is available to everyone.

About a year ago I put Medal of Honor Airborne into my 360 and almost instantaneously received this email:

Hi chauncygardner!

Thank you for registering Medal of Honor Airborne(TM).
Here’s your gameplay tip:
Wait until you're low on ammunition before using the supply drop crates. It is a one-time fill-up.
Remember, your EA Member Account automatically stores your information, making the game registration process quick and easy. Even better, you could receive a free cheat code or game hint, or an opportunity to receive special offers on EA games with each game you register.
Have you taken our survey? Take a minute to help us improve your EA gaming experience.
Have Fun!
Your friends at Electronic Arts
http://www.ea.com
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PRIVACY POLICY: Our ESRB Privacy Online Certified Policy gives you confidence whenever you play EA games. To view our complete Privacy Policy, go to http://account.ea.com/legal/legal.jsp?site=eaco.

I didn't even know I had friends at EA. It was right after Peter Moore joined from Microsoft and I figured it was his idea, but they were probably doing it well before his arrival. More recently, one of my buddies told me about the email he got after he played the Bad Company demo. It thanked him, and told him about the object he would get if he purchased the full version of the game. The information comes from the data stream spit out of Live. Every 360 sends a stream of data about its user's activity to Xbox.com, where it is converted into XML data. EA was using to send emails to live players, and now they are poised to step up the usage.
EA's recent acquisition, Rupture, uses these streams, as well as streams from World of Warcraft and, potentially, other MMOGs to provide added value to players of the games. As we learned with 360voice - now owned by Rupture competitor Gamerdna - it flows from every game, providing real-time player activity data. The scope of Rupture’s capabilities is not really clear, it didn’t get out of beta prior to the acquisition. The one real story about Ruptures described the service as:
Rupture taps into the game to automatically pull together character names, profiles, and resources, and publish them on a personalized site. Rupture will also pull together stats to create individual and guild rankings and provide a place for guilds to organize their playing. As Rupture tracks each member’s playing over time, these personalized profiles evolve. And players will be able to chat in groups or with other individuals and download other addons and game demos.

It sounds like a social network for asocial people. Your games, not only send tweets, they actually blog on your behalf, not only do they blog, they find other people who do what you do, and can provide you with demos and add-ons. The interesting thing about this company which was snapped off the market by EA for USD 30 million is they are providing this service not only for Madden, but for WOW, Halo 3 and perhaps most significantly, Guitar Hero III. By creating these leaderboards and services, they are in a position not only to capture their own consumers, but consumers from the number one and two games belonging to newly crowned, number 1 publisher, Activision.

The value of social networks like Linked-in, Facebook, MySpace and ebay is in the community, not the technology. Games are moving in this direction as well. All things being equal, or even almost as good, gamers will gravitate to the game with the best community and best customer service. The threshold for these games is other players. Many games never take off on line because the community is not large enough for people to find players to play against. Others lose players because the competition is weak or unsportsmanlike. The highest status, and most trusted members of a games community are very valuable to a publisher. If I leave a game, no one really cares. If the person with the highest achievement level leaves, people talk. If a guild leaves, many follow. We have already seen this in the MMORPOG world through guild recruitment. High status guilds are recruited and given bounties for migrating to new games. Rupture will not only bring the practice to the console, but automate it.

Rock Band and Guitar Hero compete head to head. EA, through Rupture, is tracking the game play behaviors of Guitar Hero gamers. Sure, it is not all of them, but it is the hardest of the hardcore, or in marketing terms, a representative sample. It is also a showcase of the best players. The consumer who signs up is given a place to show off and access to potential stardom. EA gets performance data of the songs offered by Activision a well as play patterns for consumers of the game. The obvious opportunity is player poaching. Take the community leaders off the top by offering free Rock Band kits and music. The not so obvious is the opportunity to aggregate purchase and play data with EA's music library to determine value of music on a going forward basis. Activision went out and bought Aerosmith, but is it really performing well enough to justify the price? EA can just take a look at what would normally be Activision’s proprietary data. When it comes time for EA to launch an MMOG, it’s nice to be able to reach all those WOW players. Since all the data is freely available, EA is doing nothing wrong and probably not violating the current terms of service.

The company will also gain a great advantage without predatory behavior. The data will give EA a leg up in the advertising world. The CPM of NOS, remnant or run of site placement is very low, even negligible. The value rises with knowledge of the consumer. Other publishers can sell ads based on players’ participation in their own games, if that. EA will be able to sell players based on the EA games the player is playing, as well as all of the other games. Not to mention, the player’s status in all of the games, and even the opportunity to sponsor the best.

Of course this is a bunch of supposition, we just have to wait to see what the roll out looks like, but it sure sounds like EA is working on being the Nordstrom of games.







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