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Thursday, 28 April 2011

FarmVille 1 - EA Sports 0

This morning I saw a headline that probably a year ago would've made me say WOW.  However, now I wasn't as blown away just because we've seen the writing on the wall for a while now.

The headline was on Reuters and read "EA's COO leaves for Zynga : sources."  For those of you who aren't aware, Zynga is the company that is behind the success story of games such as FarmVille or CityVille that are super hits on social media platforms like Facebook.  EA or Electronic Arts, has been one of the most dominant gaming software houses out there and have been behind the EA Sports franchise which includes FIFA '11, NBA Jam, NHL '11, Madden '11 and a whole host of other sporting titles.

The difference between EA and Zynga is that EA is dominant in the traditional gaming platforms such as console gaming (Xbox, Wii and PlayStation) and PC's whereas Zynga is only really on Facebook.  EA have a whole host of genres and games that they market through a wide distribution network whereas Zynga have few games and effectively only one distribution channel, which is Facebook.

Will Wayne Rooney be endorsing a game
on Facebook anytime soon we
The fact is, the gaming industry has undergone tremendous changes in the last few years and this is only going to continue.  In the last quarter of 2010, we saw a report that Zynga in fact had a higher valuation than EA (click here to read this).  Therefore, it isn't much of a surprise to now read that EA is losing it's key executives to Zynga.  A year ago, maybe you would've wondered why a senior executive like that would jump ship.

With Rovio, the team company behind Angry Birds, a game that essentially started on the iPhone just a few years ago, also making huge inroads into gaming, it'll be interesting to see who dominates this market in the next couple of years and how many of the gaming houses that many of us grew up with still exist.  We've already written about the demise of Guitar Hero (click here for details) and the rise of Angry Birds (click here to read this post) but we hope some all time classics like Super Mario remain evergreen.

Posted by: Ashish Panjabi, Chief Operating Officer, Jacky's Electronics LLC