January 18, 2005 4:00 AM PST

Electronic Arts plays hardball

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studio Criterion, a division of imaging giant Canon, for $48 million. While Criterion has several popular game franchises, including the racing series "Burnout," it's more significant as the owner of RenderWare, the most popular piece of "middleware" used to create video games. RenderWare tools were involved in the development of about one-fourth of all game titles released last year, according to company estimates.

RenderWare is an important asset to Electronic Arts as the company prepares to make games for high-powered new consoles expected to arrive on the market late this year, said Brian O'Rourke, an analyst for research firm In-Stat. Game makers will have to do a lot more work to exploit the capabilities of the new machine, he said, and a uniform development environment will help keep costs under control.

"The consoles are becoming very expensive to develop for, and they are going to get more expensive," O'Rourke said. "Publishers need to be ready for this more expensive publishing environment, and that means doing whatever they can to be more efficient. These guys (EA) are thinking way, way in advance for the next generation."

The big question behind the scenes is whether EA will continue to license RenderWare to outside developers or keep the technology in-house, forcing competitors to adopt potentially expensive new technology in the midst of a difficult hardware transition.

David Doak, director of Free Radical Design, an independent developer best known for its "TimeSplitter" games, noted that some of EA's biggest competitors, including Take-Two's "Grand Theft Auto" series, rely on RenderWare.

"The middleware market, certainly for this generation of consoles, has been quite monopolized by RenderWare," Doak said. "For people not working with EA, that's going to come as quite a bit of a shock that EA now has control over those tools."

EA's Brown said the company plans to continue licensing RenderWare to other developers, and he characterized the middleware products as a minor part of a deal motivated mainly by the "Burnout" game franchise.

"Controlling RenderWare was just not a big part of the rationale for this agreement," he said. "We hope other developers continue to use RenderWare middleware, but whether or not they do has very little impact on how we measure the success of that acquisition."

Looking ahead, Wedbush Morgan Securities analyst Pachter expects EA to continue to make aggressive moves to expand, possibly into the burgeoning Asian market for online games, where EA has minimal presence now. The company is also in the midst of a bid to take over Swedish development studio Digital Illusions, which has worked on EA-published games such as the "Battlefield 1942" series.

Pachter expects EA to continue working on acquisitions and other business maneuvers to ensure the company remains No. 1 with the next generation of game machines. "They don't like it one little bit when anyone challenges them," he said. "They're trying to prove to people they're the big fish in the small pond."

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14 comments

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What goes around, will come around, again and again.
I honestly think there isn't anything wrong with what is going on. I think there will be a few very large players in the games industry because of what is going on. However those companies will have the cash needed to develop higher quality games. I think there are a lot of titles coming out with below-par graphics and spotty operation that could be much better if developed by a company with the means to fully polish and refine them.

In any case, this is all cyclical. New companies will emerge. The talent base of game designers and technical grunts will expand. We'll be back to square one in five years.

NWLB
*******
<a class="jive-link-external" href="http://www.nwlbnet.blogspot.com" target="_newWindow">http://www.nwlbnet.blogspot.com</a>
Posted by NWLB (326 comments )
Reply Link Flag
Polish
When I think of EA, I do not think of polish. I think of shameless advertising within a game, a game that was paid for with no discounts. Burnout 3 (while I love the game) lacks polish, but EA sure found the time to shove their horrible "EA Trax" and ads for their games and perfume. But I feel that Burnout 3 was rushed out, probaly because all EA wanted was Renderware and do not care what happens to NFS competetors.
Posted by Andrew J Glina (1673 comments )
Link Flag
What goes around, will come around, again and again.
I honestly think there isn't anything wrong with what is going on. I think there will be a few very large players in the games industry because of what is going on. However those companies will have the cash needed to develop higher quality games. I think there are a lot of titles coming out with below-par graphics and spotty operation that could be much better if developed by a company with the means to fully polish and refine them.

In any case, this is all cyclical. New companies will emerge. The talent base of game designers and technical grunts will expand. We'll be back to square one in five years.

NWLB
*******
<a class="jive-link-external" href="http://www.nwlbnet.blogspot.com" target="_newWindow">http://www.nwlbnet.blogspot.com</a>
Posted by NWLB (326 comments )
Reply Link Flag
Polish
When I think of EA, I do not think of polish. I think of shameless advertising within a game, a game that was paid for with no discounts. Burnout 3 (while I love the game) lacks polish, but EA sure found the time to shove their horrible "EA Trax" and ads for their games and perfume. But I feel that Burnout 3 was rushed out, probaly because all EA wanted was Renderware and do not care what happens to NFS competetors.
Posted by Andrew J Glina (1673 comments )
Link Flag
not that relevant
the most important part of the game industry is the developers. Without them, you've nothing. That said, some of the best, and most popular, games are original titles. You buy a company, you buy the franchise licenses, but the talent, the people behind those games, are free to quit. You develop the next hot, original game, and you'll find someone to publish it. Big fish, small fish, the ocean's not going anywhere.
Posted by mortis9 (370 comments )
Reply Link Flag
not that relevant
the most important part of the game industry is the developers. Without them, you've nothing. That said, some of the best, and most popular, games are original titles. You buy a company, you buy the franchise licenses, but the talent, the people behind those games, are free to quit. You develop the next hot, original game, and you'll find someone to publish it. Big fish, small fish, the ocean's not going anywhere.
Posted by mortis9 (370 comments )
Reply Link Flag
3d0 Part Deux
Now I wonder if EA will once again try their hand at the console market.. Considering they almost have a stranglehold on the publishing for the console market.. They say renderware is not important.. But I see where; when, a game company competes and then all of a sudden EA can just convieniently pull the license and then sue said company for using an unlicensed product... So right there they have a non-percieved monopoly; because, now they have control over a tool which is used by about 90% of current game developers...
If the DOJ was smart they would force some very strong measures on how this "middleware" was regulated, OR, hopefully some open source gurus will develop something better.. ;-)
Posted by nzamparello (60 comments )
Reply Link Flag
You learn something every day
I was going to rant at you about how 3DO was developed by the creators of Amiga and the Lynx, but I checked my facts first and found that you are largley right. (The CEO of 3DO was the founder of EA.) Hmmmm. Scarey. I used to love EA due to my love of the old Bards Tale games but that was a long time ago now.
Posted by Andrew J Glina (1673 comments )
Link Flag
3d0 Part Deux
Now I wonder if EA will once again try their hand at the console market.. Considering they almost have a stranglehold on the publishing for the console market.. They say renderware is not important.. But I see where; when, a game company competes and then all of a sudden EA can just convieniently pull the license and then sue said company for using an unlicensed product... So right there they have a non-percieved monopoly; because, now they have control over a tool which is used by about 90% of current game developers...
If the DOJ was smart they would force some very strong measures on how this "middleware" was regulated, OR, hopefully some open source gurus will develop something better.. ;-)
Posted by nzamparello (60 comments )
Reply Link Flag
You learn something every day
I was going to rant at you about how 3DO was developed by the creators of Amiga and the Lynx, but I checked my facts first and found that you are largley right. (The CEO of 3DO was the founder of EA.) Hmmmm. Scarey. I used to love EA due to my love of the old Bards Tale games but that was a long time ago now.
Posted by Andrew J Glina (1673 comments )
Link Flag
corporate ripoffs
i would just like to inform the general public of how a company like electronic arts makes money from ripping off the general public at will and arbitrarily denying any recourse to their abuse of power if a news source such as cnet actually did the homework a whole new story would come to light it just takes a little research and investigation i found out some very interesting facts and i am just the average american person so it tends to make one think why a company as big as electronic arts is so afraid of the public that they have no customer support contacts or phone number to call and the one option they have is e mail which is never responded to. well in my opinion the public in every country should boycott electronic arts and then lets see how much money they make from our children and maybe they will learn to respect the everyday consumer and provider of their income without customers they would be nothing
Posted by kidgraphics (2 comments )
Reply Link Flag
corporate ripoffs
i would just like to inform the general public of how a company like electronic arts makes money from ripping off the general public at will and arbitrarily denying any recourse to their abuse of power if a news source such as cnet actually did the homework a whole new story would come to light it just takes a little research and investigation i found out some very interesting facts and i am just the average american person so it tends to make one think why a company as big as electronic arts is so afraid of the public that they have no customer support contacts or phone number to call and the one option they have is e mail which is never responded to. well in my opinion the public in every country should boycott electronic arts and then lets see how much money they make from our children and maybe they will learn to respect the everyday consumer and provider of their income without customers they would be nothing
Posted by kidgraphics (2 comments )
Reply Link Flag
If you are getting our hopes up then I will send out my minions to find you, drag you back here and then I'll have my mistresses deal with you.
Posted by merchantsolutions (1 comment )
Reply Link Flag
Forbes Magazine said Ea and Maxis are 'sticking to their guns' and 'defending' THEIR vision of the new SimCity. The bottom line is they aren't listening to what WE the consumer want who actually go out and BUY their product. It's a sad day when companies could care less what their buying public is asking for. So go ahead EA and Maxis. Stick to your guns and we'll stick to ours and boycott your company and every title you produce from here on out.
Posted by scottp23 (5 comments )
Reply Link Flag
 

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