The Silicon Valley software company, which has operations in Utah, has been losing money for six quarters, in part because its longtime strategy of turning out sequels for its Madden football game and other best-sellers has run out of steam. Spore, which game guru Will Wright has been working on since 2005, is vital for boosting EA's revenue and restoring its reputation for developing original game concepts.
But Spore is arriving more than a year late, which EA attributes to the need to polish the game and work on features such as social networking. And besides development work, the company has been grappling with a tough marketing task: explaining what Spore is all about.
Wright and the game studio he co-founded, Maxis, blazed a lucrative trail with the Sims series, which began in 1989 with the idea of virtually managing the growth of cities. EA purchased Maxis in 1997, and continues to publish Sims titles. The franchise has generated more than $1 billion in revenue since its inception.
Spore, which hits store shelves in Europe on Friday and in North America on Sunday, goes much further. Players shape the evolution of everything from tiny organisms to mature creatures to planets and galaxies. The most unusual feature is that users' creations are not only theirs to view; they become part of the environment experienced by other players.
EA declines to disclose how much it spent to develop Spore, or its marketing budget. Estimates are that EA spent $50 million to develop the game and that it needs $75 million in sales from the game to break even.
Given the hype surrounding the game, delivering anything less than a blockbuster - which generally means sales of 1 million units or more for a PC game - would be a major blow to EA. EA faces the challenge of promoting Spore without giving customers the idea the game is too complicated. EA decided not to release a simplified demo of the game - a common practice for new releases - saying it wouldn't give players the scope of what's possible with Spore. Instead, the company in June began offering a free software download called Spore Creature Creator. There are a number of Spore fan Web sites that show off the creatures people are building. EA also has an official YouTube channel where more than 100,000 creatures have been uploaded.
John Riccitiello, who took over last year as CEO, has been taking steps to boost growth, as well as reduce high development costs that have contributed to losses. EA last year purchased VG Holdings Corp., the parent company of game makers BioWare Corp. and Pandemic Studios, for $860 million in a bid to add more action and role-playing games. EA is also in talks to purchase Take-Two Interactive Software Inc. - maker of the hit Grand Theft Auto series - after its unsolicited tender offer to buy the company for about $2 billion expired last month.
