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Opinion: EA should have bought NaturalMotion or Machine Zone, not PopCap

Marketing machine is working, but monetisation isn't
Opinion: EA should have bought NaturalMotion or Machine Zone, not PopCap

With global growth in the mobile games markets reckoned to be at least 30 percent annually, you have to worry about companies that are standing still.

Despite strong growth over the previous couple of years, that's now the situation with EA Mobile; one of the key western operators.

Its FY14 Q2 figures were a surprising $75 million, that's the same as 12 months ago, and down 34 percent on the $113 million posted three months ago.

(It doesn't break out net income, so we can't comment on the unit's profitability, but overall EA made a loss of $273 million over the past 3 months.)

Slipping down tale

Of course, quarterly figures can fluctuate depending on the timing of successful releases.

That's why EA Mobile's FY14 Q1 was so good: it had just released Real Racing 3, while The Simpsons: Tapped Out was also performing strongly.

The scary thing is those games are still doing the business.

EA has just announced that since its relaunch in October 2012, The Simpsons: Tapped Out has now generated over $100 million in revenue.

That's 26 percent of EA Mobile's total revenue during the 12 months.

The Simpsons: Tapped Out has performed strongly - top 20 US top grossing iPhone chart shown - via App Annie

Similarly, Real Racing 3 remains very popular. It's been downloaded over 70 million times and is currently averaging 18 million monthly active users.

Real Racing 3 launched well but has been slipping down - US iPhone top grossing top 60 chart shown - via App Annie

The main reason Q2 proved so disappointing for EA Mobile, however, was that in August it released the much anticipated Plants vs. Zombies 2.

Plants vs Zombies 2 launched well but hasn't troubled the US iPhone top 20 top grossing chart - via App Annie

It's been downloaded over 25 million times on iOS but roundly criticised in terms of monetisation - something that's been reflected in its commercial performance.

What's next?

So, the worrying thing for EA Mobile is despite all this activity in its games (at least in terms of downloads), its sales are the same as 12 months ago. Meanwhile, everyone else appears to be booming.

This suggests that while EA can market its mobile games successfully, it's not plugged into the free-to-play business model as well as it should be.

Brutally put, it lacks retention and monetisation.

Significantly, the company had to acquire an experienced F2P outfit in the form of Canadian developer Bight Games to make The Simpsons: Tapped Out a success.

Conversely, spending up to $1.35 billion on PopCap - the developer of Plants vs. Zombies 2 - now seems like the wrong company and the wrong price.

Instead, the benefit of hindsight suggests that EA should have been looking for upcoming - and then relatively cheap - F2P developers such as NaturalMotion or Machine Zone, both of which have demonstrated very strong commercial success over the past months.

For example, Machine Zone's Game of War was the #6 top grossing iOS games globally in September.

Of course, for the right price, those sort of companies are still available. The only problem is those prices are now many multiples higher than they were. But sadly, for EA, those prices might now be its only medium-term option.