EA Shuts Down Social Games Division, EA Blueprint
According to Edge Online, as part of its recent cuts, EA has shut down EA Blueprint.
From what I've read, EA Blueprint was set up to publish games on top of social networks, or as we like to call them, social games.
In its time, EA Blueprint released a Facebook version of Smarty Pants, developed by Context Optional, the apps-for hire company. It currently has a respectable 40,000 monthly users. For perspective, the cut-off for a hit game on Facebook is 1 million monthly users.
I'm guessing that EA will opt to focus on the other new games platform, the iPhone. It's already seeing success there, unsuprising since the iPhone is much closer to the traditional retail game environment to which larger players are accustomed.
Here's the big picture.
I learned recently from a brilliant guy that when companies fail to build something internally they usually opt to acquire a company with whom they have an existing relationship.
Social games are going to be huge. Eventually, EA is going to need to acquire a large social games company. They're going to want to either acquire the #1 or #2 player in the space, because that what big acquirers tend to do. Right now, that's Zynga and Playfish. I don't see anyone else challenging either company's dominance at the moment, but anything could happen. If nothing changes in the next 18-24 months, when EA is ready to acquire, I think they'll be TRYING to buy Zynga. Why? Cuz Bing Gordon, former Chief Creative Officer of EA is on Zynga's board and a key adviser. Relationships matter.
Note: while SGN is still a player, they've opted to turn their focus on iPhone games , a space in which EA is already competitive. An acquisition of SGN would be primarily to expand EA's mobile games portfolio - feels unlikely at the moment.
Let me know if I'm crazy or overlooking something in the comments.
UPDATE: Awesome Comments Aplenty. Lots of insight. Read them.
8 comments:
A company with a 5.6billion market cap and 10billion in cash in the bank for acquisitions hasn't failed. In fact, the recent NPD data has been strong in the games sector - but the overall economy has pulled down the whole games industry. But let's be clear, we are not talking about a failed business model. Also, EA already is in social games, vis a vis Pogo.com. Those games are not on social networks, but they are online social games. Which begs the question, what constitutes a "social game"? They don't have to run on Facebook to be considered social gaming.
Lol. I certainly didn't mean to imply that EA as a company had failed. That would be crazy.
EA Blueprint was tasked to create transmedia properties, basically games that lived on multiple platforms, social networks being the key one. It was a failed experiment.
Stupid stupid me. Totally forgot Pogo. I agree that Pogo has social games. And it's massively successful. And the model for anyone trying to combine games with social networks. And was acquired by EA rather than built in house.
Pogo's flaw is that it's a closed garden, doesn't access its player's actual social graph, and is focused on one demographic. I'm reluctant to say flawed since I hold Pogo as the example of all things awesome, I should say that they are leaving themselves open to competition on the three points I just listed.
Thanks for the comment, reminded me I totally overlooked Pogo!
Man, 10 billion in cash reserves! I totally need to read EA's SEC filing.
I know I'm being kind of nitpicky here, but when you say things like "games on top of social networks, or as we like to call them, social games," I just can't help gritting my teeth.
So far I've seen very few examples of "games on top of social networks" that are actually social or rather, ones that have a compelling social component. I'd say that warcraft is much more social than most facebook games I've seen. We should expect better and create better social experiences than what has become the norm so far.
I don't think it's actually clear that Blueprint was EA's FB play. That said, I think you're right in your analysis that IF social network games prove to be lasting and significant market, EA will want to take a major piece. Who wouldn't? I don't think it's at all a forgone conclusion that FB/Myspace games will be a big enough revenue platform for EA to want to play (likewise, the iPhone).
I agree that a Zynga acquisition is the obvious candidate, which is ironic for the ex-Pogo folks at Zynga.
However, in these 'challenging times' I could see EA buying one of the many smaller, scrappier startups that have received early-stage funding and may have difficulty getting second rounds. This would be more challenging for the organisation, and not the traditional EA way (which they have admitted is mostly broken), but they might be able to stitch together a patchwork quilt that looks similar to Zynga's, at what I would guess to be significantly lower cost.
Eran. Agreed, I often vacillate between extremes when trying to define "social games". WOW is totally a social experience. Especially once you start raiding. Is a social game? Yes. In fact, I wish most social games had a tenth of the social qualities of WOW. Hoenstly, any definition of social games is arbitrary, however the term social games came into parlance to categorize games living atop social networks. Sicne then it's become more elastic, partly because of people like me who agreed that social games can be extended much wider than social networks.
Re: Daniel. Yeah, it's totally not clear about Blueprint, EA didn't provide many details. I would liek to clarify that FB isn't the only game in town. There's tons of app platforms being dominated by games from Myspace to China. Even Glam Network released an app platform recently. Fact is, there are game sthat would better on a social environment and I think EA was trying to ride the momentum like any smart competitor would. It also sounds like they moved off that strategy with Blueprint months ago.
Looks like Neil Young's behind ng;moco:) (Rolandos on iPhone)
http://www.linkedin.com/pub/0/113/b84
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