EA is an awesome company that makes good games and you sound like a moron when you bash it. EA bashing is the gaming version of clapter. If you’ve ever watched Real Time With Bill Maher, you’ll immediately know what I’m talking about. Clapter sounds a little something like this: “Hey, how about [politician] right? What a moron!” waits for applause. There’s no real joke there, but that doesn’t stop people from clapping. Here’s some EA clapter:
There’s no point. It’s just taken for granted that EA is so terrible and out of touch that a premium subscription service that costs less than Netflix or a WoW subscription is beneath comment. My new favourite hobby when I’m in a gamer bar is to mention EA and watch total strangers come up and unload on the company. And this is the mild stuff. YouTube is full of shouty men whose only purpose in life is to heap scorn on the publisher. This week we hit a new low in blaming EA for the recent shooting in Jacksonville.
None of this makes any sense. You may not blame EA for the shooting, but there are still way too many people using that company as a shorthand for the worst in gaming. If I play the odds, most readers will have liked some EA clapter in their social media feeds, or have issued one of their own. I am here to tell you your takes on EA suck. I will bring evidence for this fact. I’ve brought enough evidence to deal with as many goalpost shifts as I can stand and I still know the response is going to be “Yeah but…” So let’s get this over with.
If you hate EA so much, why do you keep buying their games?
We can now add the response to Cowen’s report on Battlefield V’s pre-sales to the long list of times idiots have crowed about EA’s imminent demise. This genre is pretty old now and has its origins in finding out that watching YouTube and dumping on the hobby is easier than having an original thought. But you want finances? I’ve got finances.
There are five game publishers traded on US markets: Activision Blizzard (ATVI), Electronic Arts (EA), Microsoft (MSFT), Take Two Interactive (TTWO), and Zynga (ZGNA). I’ve removed Zynga since it’s a mobile focused publisher, and had to do the same with Microsoft since the information will be tangled up with a majority of non-gaming activity. Since these companies trade on US markets, they must file with the SEC and these filings are available in the EDGAR database. If you would like to follow along while finding out why your EA takes suck, I will be using form 10-K, the annual report.
This is also the point where I expect a bunch of whining “Biased analysis” objections since publishers like Ubisoft, Paradox, Capcom, or SquareEnix aren’t included. These companies don’t file with the SEC since they are not on US exchanges. If you think an analysis of the publishers of Battlefield, Call of Duty, Grand Theft Auto, Civilization, XCOM, Need For Speed, Diablo, Bioshock, World of Warcraft, and Dragon Age is not representative, give me a good explanation why and then I’ll consider addressing the inevitable objections based on obscure European accounting differences that will follow when I add the other publishers.
Since everybody’s talking about how EA’s going to fail because of their business decisions, let’s talk about profitability. Here are five years of financial returns (note: the year is the period ending, so 2018 = 2017’s games etc.).
EA wins three out of five years, usually with a healthy margin. Overall EA brought in $191 million more than its closest competitor, Activision Blizzard. Case closed.
But this isn’t convincing and it’s not because EA won. When EA stumbles there will be no shortage of commentary about why financial success is the only true measure, but since I am not a half-wit I must hold myself to a higher standard. If EA spent $1 trillion to achieve the results in that chart, while Activision Blizzard only spent $20 (coffee and muffins for the design team), then Activision Blizzard would be the better publisher. To normalize these results let’s see how many dollars in revenue (not profit, but total goods and services sold) each dollar spent generates:
Here EA beats the competition in all years but 2014 and is the only publisher with a clear upward trend. For every $1 EA spent last year, it generated $4.03, while Activision Blizzard generated $2.76. Why do gamers care about this number? Unless EA is robbing banks or putting a gun to your head, it makes its money like its competitors: making and selling games. This measure says EA has a really good idea of where to spend its money, because when they spend a $1 making a game, the result is something we are willing to spend $4 to play.
“Aha! This proves that EA is screwing us!” I hear you, a moron, say. For this to be true it would have to mean that despite a ‘guaranteed fun’ refund policy, streaming, and Metacritic, EA (and EA only) has been fooling gamers for five years and not only has nobody caught on, but they have only become more credulous. Or we can say that EA’s pretty good at finding out what the value of their games is and making you pay up for it. But let’s leave aside your obvious appetite for EA games and look at what goes into the costs we are talking about.
Everyone knows that EA is a greedy corporation that doesn’t care about games and is only concerned about making fat, cigar chomping businessmen money. Hell, we just need to look at Kotaku’s piece on Mass Effect: Andromeda to see this inefficient bureaucracy in action. I bet they only sell so much because they spend so much money marketing their games. For our next chart, we will assume that all administrative and marketing costs are the same as putting the money in a big pile on the floor and setting it on fire. This chart shows how much of each dollar has been burnt upon the alter as an offering made by fire for a sweet savour (lower is better):
While not the lowest, EA consistently spends less on marketing and administration for each dollar of expenses than Activision Blizzard, and by a wider margin than the difference between itself and Take Two. The worst you can say about EA is that it does no worse than its peers in this regard, which is a quite the concession given how pathological the hatred of the company is.
(As an aside, I would like to take a minute and say how unfair and totally detached from reality this measure is. To see why the premise of “Marketing and admin doesn’t count as gaming” is nonsense, you only need to spend 10 seconds reading marketers like Haley Uryus of Failbetter. Watching a trailer for a game like Stellaris will also help you appreciate how marketing can play a role in helping to create the fantasy that is played out in the finished product. Anyway, back to your terrible EA takes.)
If you invert this measure and ask what proportion of expenses go towards the elements of the game you see on screen (higher is better), EA is at the top in all periods but 2014.
This is because the assumption that all expenses other than marketing and administration go into the games is not a good one for Take Two Interactive. That’s right, EA isn’t even the worst company when I bias the measures against them. The SEC filings show us that EA is a company that makes a product people want to buy, and puts more of its costs directly into that product than its peers. People buy EA games because they’re great games made by talented people.
But what about the quality!?
Let me guess, now financial reports don’t capture the true essence of gaming. How do I know that talented people are making games there? This is EA we’re talking about, the publisher that kills anticipated games and eviscerates beloved studios. I know because the people who work at these companies told me. Here are the Glassdoor rankings for the three publishers:
|Rating||# Reviews||Recommend to a Friend||Recommend CEO|
Identical between EA and Activision Blizzard, with Take Two pulling ahead by 0.2. EA’s finding comes from 1900 results, over 10 times more than the other two publishers. EA only lags in recommendations for a friend to work there. But this is just the corporate side of these companies right? I’m sure if we started looking at ‘real game development’ we’d see how bad EA is. Once again I’m sandbagging EA on this one, because if I drilled down to individual divisions I would be presenting EA Montreal’s 4.8 to Blizzard’s 4.5 and you’d accuse me of biased measures.
What about the games themselves? Everyone knows EA makes terrible games that everyone hates! Here’s Metacritic:
EA achieved the highest score over the five year period and is in the middle of the pack for the five year average (74.8). EA is last in only one period by 0.1 point. Activision Blizzard’s five year average doesn’t even break 70. Which of these publishers has the most franchises that have sold at least 100 million copies? EA. Too high of a bar? What would you prefer? 50 million copies? 20 million? 10 million? 5 million? EA, EA, EA, EA. And that’s after I included Barbie for Activision Blizzard.
Your complaints are stale
Hate loot boxes? What publisher removed lootboxes due to player complaints rather than regulatory change? EA. What company completely removed them and expansion DLC from the latest iteration of a major franchise? EA. And then you complained about women being on the cover. Because it’s never really been about the games has it?
The only reason you hate EA is because some guy on YouTube said EA was bad and he was angry enough, or British enough, or maybe angry and British enough. Either way, you were definitely stupid enough to believe him. The funny thing is, there was even a time you could rightly criticize the direction that EA was going, and it changed right around the time people developed these unshakeable priors that the company could do nothing right. Commentators who had no idea what they were talking about unloaded on EA for every last perceived slight in gaming as a whole. Remember when day one DLC was beyond the pale? How dedicated servers were non-negotiable? Commentators changed their minds on the individual business practices, but EA retained its Goldstein status. Influencers’ private gripes with a publisher were uploaded into an internet hive mind that will believe anything it is told. There will be people who die hating EA who have never once experienced any of the things the internet complains about.
This is why your EA takes suck. The EA you’re attacking doesn’t exist and never did. All that this baying signals is that you’re someone who believes any nonsense they hear on the internet and will repeat it ad nauseam. Think $100 a year is too much to pay to access EA’s premium titles? Don’t buy it. I only got the Basic level myself because I’m scared if I go for Access Premier I’ll never stream anything else. But reducing it to a response of “HAHAHAHA” only tells me you’re going to pay that much to play one game instead of an entire library of them, and that you don’t really know that much about gaming other than what people on the internet tell you. This is true of all EA clapter. It’s unfair, it’s old, and it makes all of us dumber.
Fortunately, it’s never been cheaper to tune you out. For $5 a month, I can try out some EA financed indies like Unravel or Fe and not think about people being angry on the internet. You know, like a real gamer does.