Gaming

The reaction to the results of Electronic Arts, the second largest gaming company in America, were somewhat perplexing for those who read the full release. The results were good, with some significant developments, and yet, the shares fell; a function, perhaps, of near-term expectations getting a little too hot under the collar. Bar the souped-up anchors of the financial TV channels, the quarterly results fandango is often just noise, and a four-times-a-year distraction to management. For EA, the long-term opportunity is massive, as media consumption rapidly shifts online; and don’t management know it. Hence their confident tone on the call. The confidence stems from the success of games like Apex Legends, a ‘free-to-play first-person hero shooter battle royale’, a game the company quietly launched into the market in 2019. Take up has been strong. The gamers are on board. Like the big franchises, such as Tencent’s Fortnite and Take-Two’s Grand Theft Auto, Apex Legends is a platform. As it says, it’s free. For EA, money rolls in from players buying bits of kit to use in the game; players who hook up, and play, and chat and provide feedback to the developers who can then tweak this and that. The game evolves. The traditional video game launch was too often fraught with risk – it may turn into a blockbuster, it may not. And in any case, success may not be replicable. Tastes change. Platform games, like Apex, remove the risk. The revenues become sticky and as the games evolve, they become more like social networks, where people can hang out with their friends. The mall’s loss is the developers gain. We know the media landscape is changing, and changing fast. We know too the pandemic has pulled forward a massive amount of future adoptions – from online grocery to video calls. Every part of the media journey is being unbundled. Technology is enabling brands to go digital, and go direct. This is no more evident than on the platforms in the gaming sphere which, over coming decades, is likely to see the developers become an increasingly dominant player. Indeed, as the profit-hungry executives of the C-suite continue to lust over the eyeballs of millennials and Zoomers, perhaps gaming could even become the dominant player, in what is fast becoming a very different media landscape.