Standing behind a two-way mirror, Glen Schofield anxiously peers out at a handful of gamers. The outcome of an ambitious effort to remake video game giant Electronic Arts (ERTS) could come down to how the players on the other side of the glass react to the next few moments of the yet-to-be-released game Dead Space. Suddenly they finger their controllers frantically, their smiling faces illuminated by the flicker of PC screens as a new weapon they're testing mows down hordes of attacking beasts. Schofield, executive producer for the EA science fiction game, relaxes. "The response was off the charts," he says. "At the end of the day, it's all about taking the player on a roller-coaster ride and creating a great game."
Dead Space promises to be a stomach-churning adventure for EA, too. The old industry formula for success was simple: License a popular movie or sports title and then crank out slightly updated versions of Madden NFL or James Bond year after year. But that approach, developed in large part by EA, isn't working now. Sales are flagging, and gamers are losing interest. "We're boring people to death," says John Riccitiello, EA's chief executive.
NO MORE SNOOZY SEQUELS
With Dead Space, EA aims to break with the old ways of developing and marketing games. It's encouraging employees to be more creative by thinking beyond the joystick from the very start of a project. The idea is to create the next Batman or X-Men franchise in reverse, with a hit game leading to popular comics, TV shows, books, and even movies. Dead Space, a game in which an engineer named Isaac Clarke struggles to stay alive on a ship overrun with dangerous creatures, will be the basis for TV shows, Web videos, and comic books that EA is developing with outside partners. The first Dead Space comic book hit newsstands on Mar. 3. "The strategy is very innovative, clever, and something that should have been done a long time ago," says David Cole, an analyst at research firm DFC Intelligence.
The idea came from Riccitiello, who took over the Redwood City (Calif.) company in April. He calls it "IP-cubed" for its three-pronged strategy to use books, film, and games to promote the company's intellectual property. While Dead Space is the first such effort, EA plans to apply the tack to all titles in the future. "I am just stomping down on the boring sequel idea, trying to make [games] really fresh," he says.
All this change comes with new risks. Wall Street over the years has adored EA, in part because of its predictability. With the costs of game development topping $20 million, it was reassuring that EA could crank out products for a reliable customer base. It used the tried-and-true formula to become the largest independent game software company in the U.S. While Riccitiello's fresh approach could lead to bigger hits, it could also lead to bigger flops. "Cross-promotion is great when it works out. But if it doesn't, the project could fail across the board," says Wedbush Morgan Securities analyst Michael Pachter.
Now's the time to take chances, says Riccitiello. Gamers reacted poorly to many EA products released last year, including titles meant to showcase new game consoles such as the Nintendo (NTDOY) Wii and Sony's (SNE) PlayStation 3. Sales have been flat for three years, at $3 billion. Meanwhile, rival Activision (ATVI) is bulking up by merging with World of Warcraft owner Vivendi Games. On Mar. 13, Riccitiello underscored he's willing to break with the past by launching a hostile $2 billion bid for competitor Take-Two Interactive Software (TTWO), creator of the hit Grand Theft Auto games.
The CEO is changing how the 7,760-employee EA operates, too. He's organized programmers and artists into creative studios that give them more independence and ownership over projects.