EA to Play in Knights of the Old Republic

N. Evan Van Zelfden in Los Angeles warns, watch out World of Warcraft. In an interview at E3 this week, Electronic Arts chief executive John Riccitiello said that EA is working on the next version of Star Wars game Knights of the Old Republic, and it will most certainly have a massively multiplayer online component to it.

"We've got two of the most compelling MMOs in the industry in development," said Riccitiello. The first title, based on the Warhammer property, will launch soon. "And the one that people are dying for us to talk to them about -- in partnership with Lucas, coming out of BioWare, which is, I think, quite possibly the most anticipated game, full stop, for the industry at the point when we get closer to telling you about it."

Does Riccitiello mean the oft rumored Knights of the Old Republic Online?  "Yes," he said.

Moving into MMOs is an essential component for any gaming company, and it's a big part of the reason Vivendi merged with Activision, for that company's World of Warcraft MMO.

Riccitiello told Portfolio.com that he was interested in owning World of Warcraft, and that he did discuss it, but it wasn't in the cards. "Because [Vivendi] couldn't afford control of EA, and I wasn't giving it up."

But EA is firmly on that path now, with a KOTOR MMO, which would sidestep the consoles owned by Sony, Microsoft, and Nintendo. "Increasingly, people are going to be talking about direct-to-customer in our business," said Riccitiello. "I think we'll be talking about it louder than most."

Today, two-thirds of the game industry is console systems and dedicated handhelds. "We expect in 2011 for it to be fifty-percent," Riccitiello said.

MMOs will also be useful as a way to expand into foreign territories.

"China's a growth market for us," he said. "We're launching some mid-session games on a micro-transaction model." In May of last year, the company announced an equity investment in a leading Chinese online game operator, The9, Ltd. "And there's a bunch more coming that we haven't announced. "

The company has stated that M&A is part of the strategy, and EA is looking for core game companies "only when they bring great [intellectual property] and great teams," he said.  The company is also interested in businesses that "help us build our platform in the area of Asia, online, and direct-to-consumer."

"One is strategic and new, one is core and profitable -- and we're looking at both," explained Riccitiello.

Future games aside, Riccitiello is most proud of EA's revenues, its console-business growth, and what's currently on display to the army of reviewers and game journalists in Los Angeles this week.

"We added almost a billion dollars to the revenue last year," he notes. "This year, we've told the street that we're going to add a billion to a billion-three."

And console games are a market that's doing well. "It's grown 30 percent year-to-date," says Riccitiello. "All three of the consoles are way up. The PC business in terms of it's aggregate of subscriptions/micro-transactions is also way up. "

But at the end of the day, it's about the games themselves.
 
"I think, hands down, there's not a publisher or a platform that's got what we've got," he says. In his own life, he sees how EA's games are making an impact: "I've got twenty-two nephews and nieces. A couple years there, I couldn't buy everything I wanted for them at the holidays. I can do the entire holiday -- and capture my mother for the first time -- at the EA store. That's never been the case before."