January 2013 | By Krish Krishnakanthan
The success of Electronic Arts once hinged on managing relationships with retailers. Today, with online gaming on the rise, the company, which is known for games such as Battlefield, Madden and The Sims, is learning how to use technology to get closer to its customers—the gamers themselves.
In an interview with McKinsey Quarterly, Bryan Neider, COO of EA Labels, talks about his company’s transformation from a seller of packaged goods to a provider of digital services delivered directly to the customer. Neider discusses the ways in which technology has opened up new avenues for gaining insights about customers and for ultimately building a much closer relationship with them.
According to Neider, Electronic Arts has forecasted that in fiscal 2013 digital games will represent 40 percent of the company’s overall business. “As that percentage continues to grow, we are at the mercy of consumer preferences, which are almost by definition ever changing and difficult to define,” Neider says. “So it’s immensely valuable if we can understand how consumers are responding to our products.” Customers, he says, want games that not only relevant to them, but accessible anytime, anywhere, and on any device.
Among the systems and tools EA uses to find out what its customers really want is an account-management system with profiles of more than 200 million consumers. This helps the company understand where its business is going by individual game, franchise and geography. The company uses other metrics to measure customer interactions with its products, and many of them permit immediate, on-the-fly responses. Ultimately, the primary measure is the lifetime value of each customer.
In assessing this, Electronic Arts seeks to answer the following questions: Where in the game are consumers dropping out? What is the network effect of getting new players into the game? How many people finish a game? Did we make it too difficult or too long? Did we overdevelop a product or underdevelop it? Did people finish too fast?
Neider explains that Electronic Arts uses marketing teams to look at consumer blogs and social media, and to provide demos and playable betas to customers. Any feedback is immediately played back to the development team to incorporate changes. “The challenge is that parts of the gaming audience are pretty vocal—they either really like a game or they really don’t like it. The trick is to find ways to get feedback from the lion’s share of the audience that is generally silent and make sure we’re giving these people what they want,” says Neider.
To read the rest of the interview, visit the McKinsey Quarterly.
About the author
Krish Krishnakanthan is a principal in McKinsey’s New York office.