What Kristian Segrestrale's departure could mean for EA's social game plan

This week's departure of Kristian Segrestrale, the last Playfish founding executive at Electronic Arts, marks a turning point for the company that could shift it away from the Facebook platform. Here's a look back at how the social game ecosystem has changed for Playfish following its 2009 acquisition. EA at one point was viewed in the industry as the example of how mainstream publishers could successfully straddle the lines between social, mobile and traditional games. This was, in large part, due to EA's $400 million acquisition of Playfish in 2009. It was a smart investment, as Playfish was one of the major presences in the early days of social games with user numbers on par with Playdom, Crowdstar and Zynga. The benefits of the acquisition went both ways with EA gaining an experienced Facebook games developer and Playfish gaining access to major brands like MLB, Dragon Age and FIFA. For a short period of time, each of these Playfish-managed titles performed well in MAU and DAU rankings, but they lacked staying power beyond about 12 months. Meanwhile, the Facebook games ecosystem began to change in ways that made it harder for Playfish to maintain their position in the leaderboards. First, the platform cut back dramatically on the viral channels available to social game developers to address quality concerns. Then, the mandatory introduction of Facebook Credits throughout the spring and summer of 2011 made it more confusing for people to purchase virtual goods -- because first they had to buy the platform currency and then spend it within specific games. Moreover, a player could spend Credits on any game they wanted instead of just purchasing Playfish currency that could only be spent in Playfish games. Toward the middle of 2011, as Zynga moved closer to its initial public offering, it came to light that Facebook was providing exclusive advantages to the developer (which while Playfish may have known about all along, likely came as a nasty surprise to EA). The rise of The Sims Social But even with increasingly brutal competition on the Facebook platform, lightning struck for EA Playfish in mid-2011 with the launch of The Sims Social. By that Fall, it was poised to displace Zynga's CityVille as the top Facebook game and peaked with 11.3 million DAU. The Sims Social never quite managed to topple CityVille in terms of audience size, mainly because EA's game hit a plateau of new users and Zynga had a lot of help from Facebook at the time. However, the long term value of The Sims Social's users possibly topped CityVille in terms of long term value because it was a branded title that happened to be well-implemented on Facebook with no genre competition. Even with the natural decline of The Sims Social after a year, social games were still a colorful feather in EA's cap into the spring of 2012. EA purchased Klicknation in December 2011 (re-branding it BioWare Social) and the company regularly bragged about how it was one of the top social game developer in terms of users, second only to Zynga. These users were largely borne on the backs of The Sims Social and PopCap's Bejeweled Blitz, both of which aged and lost users naturally without another hit waiting in the wings. This, combined with the rise of King.com, the snackable/casual game experience and EA's own massive internal reorganization (which slowed down production and may have cut resources to social games projects), took its toll. As of today, EA holds the No. 9 developer spot in terms of monthly active users (the best estimate of a developer or app's overall reach on the social network). Despite the initial success of The Sims Social, EA hasn't been able to make history repeat itself. SimCity Social was arguably the publisher's highest-profile release of 2012, but it dropped out of the Top 25 Facebook games after only one month, peaking at 1.8 million daily active users. Outernauts, the title developed by AAA studio Insomniac Games and designed to tap into lucrative fans of core games like Pokémon, was well-reviewed but never seemed to take off in terms of users. After the game's launch fizzled, we weren't surprised to see nothing come of the merchandise plans (which involved selling stuffed animals that came with redeemable codes for exclusive monsters in the game). These flops compound on EA's other problems in areas outside the social/mobile space -- like massively multiplayer online game The Old Republic's flailing performance (which led to the game becoming free-to-play) and Medal of Honor: Warfighter bombing when it launched in October. By the time of the Q4 2012 earnings report, the company acknowledged it was losing users but said it was bringing more brands to Facebook to offset this. Then, during EA's Q1 2013 earnings call, the company talked about both SimCity Social and Outernauts as major projects, including the notation that SimCity Social had surpassed 10 million MAU. By Q2 2013, CEO John Riccitiello briefly noted the company was changing development trajectories from social to mobile, a move that caused EA to either kill or delay up to 10 social games. EA's pivot to mobile Q3 2013's earning report may have been the final nail in EA's social coffin. In the midst of noting the reasons for the publisher's losses, Peter Moore called out one of the few positives as being EA's digital division, with mobile game The Simpsons: Tapped Out being a particular highlight and generating $23 million during the period. We noted at the time how there was almost no mention of social titles during the call, and the company's leadership talked about how it was going to be making a serious push into mobile games in the future. This is in keeping with what we've heard from industry sources who report BioWare Social has had its various dev teams moved off social projects and put onto mobile titles. Likewise, Senior Vice President & General Manager Nick Earl was somewhat cagey when talking to our sister site Inside Mobile Apps about the issue, saying "Social has been a little tricky so we rethought our resources there and which franchises to get behind. We still believe that there’s a market there but it’s a matter of doing the right game at the right time." While definitely shifting away from social, we don't see EA giving up on Facebook completely. For one thing, it hasn't had to sunset any of its major releases from PopCap or Playfish. It should also be noted that The Sims Social is still profitable even with only a fraction of its peak audience -- AppData estimates the game currently has 856,026 DAU, down from 11.3 million in September 2011. Even SimCity Social still seems to be hanging in there with an estimated 309,684 DAU and a healthy DAU/MAU ratio of 17 percent. That's more than can be said for Zynga, which sunsetted CityVille 2 after barely three months of operation. As for EA's other social properties, PopCap is still on target to release a Facebook version of its hit game Plants vs. Zombies and BioWare Social (via the acquired Klicknation) is well positioned to release text-based mid-core games that are currently performing well on Facebook. Because EA is unlikely to give up on Facebook, we don't expect that we've seen the last of Playfish in 2013. Beyond the next 12 months, however, the fate of the Facebook developer is uncertain.

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What Kristian Segrestrale's departure could mean for EA's social game plan

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