Umair Haque / Bubblegeneration
umair haque  


Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Monday, July 09, 2007

Industry Note: Simulation Economy - EA vs Nintendo

The games industry is an astoundingly cool industry to watch these days. The economic shifts that are taking place there are absolutely tectonic - it's being transformed from a moribund, lackluster, cubefarm driven industry, to one where creativity is being mainlined into the larger industry's DNA.

Let me offer a few points.

EA is perhaps the single biggest reason why the games industry, well, sucks - why it's become a black hole of anti-innovation that takes in creative, passionate, dedicated, talented people who wanna make cool things - and spits out generic, lame, soulless, corporobotic "branded product".

One of the cool things about the edgeconomy is that you can't fake the funk. There's an always-on, real-time connection between consumers, prosumers, firms, markets, networks, communities, etc - and if you choose to ignore what they're saying/doing/learning/feeling - as EA's done for the better part of ten years - you don't just earn strategy decay, you lose credibility and trust in the long run.

And without those, there is no strategy, and the game becomes unwinnable - because there's very little that economic forces can work on to begin with.

Reading John Riccitiello's new vision for EA is kind of like being forced to eat Soylent Green. It's hyperimitation of the finest order - a bottom line driven capitulation, with no understanding of why or who EA must become for this vision to become a reality.

And though it's clear that Nintendo has utterly and totally rescaped the games industry, unlocking market space and redesigning the value chain in one fell swoop - yes, this is sheer economic brilliance - EA is offering far too little, far too late.

It's resources won't count for a great deal, it has little market power to wield, and it will be hard pressed to find it's out way out of a deep, deep competence trap. What it needs is new DNA.

In short - the player to be focusing on, if it's not already obvious, is Nintendo - and how it's rescaping of the industry unlocks new, unexplored paths to value creation - those built on new DNA

Microsoft, Sony, EA, etc, because they missed one of the most fundamental lessons of the edgeconomy - the stale, obsolete mass market economics of compromise kill - must all continue to fight more and more viciously, via simple price/quantity competition, for a shrinking slice of an expanding pie.

Which is, needless to say, a deeply (deeply) dominated position.

-- umair // 1:37 PM // 4 comments


This comment has been removed by the author.
// Blogger kh // 7:52 PM

EA is more secretive than the NSA, so 'at least' getting this admission from their CEO is worth something (what that is, I'm not sure):

"We're boring people to death and making games that are harder and harder to play," Mr. Riccitiello said in an interview."

Really? Anyone who's played a recent EA game could've told you that! I wonder how much they paid in consulting fees to figure it out.
// Blogger kh // 7:52 PM

totally unrealted, but could you alter your template so that the headline of the post is reflected in the title bar of the browser? would make it far easier to delicious/digg/whatever your stuff! thanks and keep up the fine writing.
// Blogger Matt // 12:20 AM

nice. but what does "rescaped" mean? do you mean like french for rescued (rescaper)? or are you misspelling reshaped? thnx.
// Anonymous Anonymous // 5:41 AM
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