ERTS Electronic Arts Inc. (MM)

By Sarah E. Needleman 

When Electronic Arts Inc. revamped its soccer videogame to let people control a fictional player's life off the pitch, developers didn't write new code from scratch. They borrowed it from a game with dragons.

The feat was possible because EA spent a decade investing in versatile code called a game engine. Now such software is drawing attention from Silicon Valley investors and companies such as Facebook Inc. and Amazon.com Inc.

Engines, much like their namesake car part, are the dynamic workhorses that make videogames tick. They have grown sophisticated enough to handle core duties such as graphics and physics for a company's entire pallet of games, saving time and money on development.

Years ago, plucking code from one game to use in another "would've taken us three times the effort," said Patrick Söderlund, executive vice president at EA Worldwide Studios, a division with more than 3,000 developers. That is because the company used to rely on more than a dozen different engines to make computer and console games. Now it uses just one: "Frostbite."

"If we can get more efficient and reduce friction, it gives us economies of scale," Mr. Söderlund said. EA's "FIFA 17," which came out last week in the U.S., is the most important game yet in the company's arsenal to deploy Frostbite.

The bottom-line benefits are difficult to quantify. Industry executives, though, say they trickle throughout all aspects of development, providing everyone from artists and designers to programmers and audio engineers easy access to the different tools they need to build games for a broad range of platforms.

Facebook thinks a widely used game engine will help revive its dormant videogame business, which generated peak revenue of $65 million in December 2011, according to Piper Jaffray Co. analysis. Today, the social network is churning $45 million a month from games, accounting for roughly 3% of its total revenue, the bank said.

In August, Facebook announced a partnership with Unity Technologies Inc., whose engine powers the blockbuster mobile app "Pokémon Go." The social-networking company wants game makers that license Unity's engine to be able to convert their wares for Facebook's site with just a few clicks, rather than have to rebuild them from the ground up.

"It was important to partner with Unity because they have an engine used by so many developers," said Leo Olebe, director of global games partnerships at Facebook.

In making it easier for developers to bring games to the company's site, Facebook is hoping to capture a slice of the growing videogame market, which is on track this year to reach $99.58 billion in annual global revenue and $118.63 billion by 2019, according to research firm Newzoo BV.

Unity raised $181 million in July in a round led by venture firm DFJ Growth, valuing the company at $1.5 billion and bringing its total funding to date to $206.5 million.

Game engines like Unity are hot because they make it easier for developers "to put out more and better titles faster," which can boost revenues, said Barry Schuler, a partner at DFJ. They also give developers access to growth areas such as mobile, augmented reality and virtual reality.

For example, Facebook's Oculus unit last Wednesday pledged to cover a portion of licensing fees for developers who use an engine called "Unreal" from Epic Games Inc. to create content for its Rift virtual-reality goggles.

Amazon.com Inc. also has been building out its ambitions in gaming with its live-streaming site Twitch and Fire TV set-top box.

In February, the company introduced a free engine called Lumberyard, with the expectation many users will opt to host games they create with it on Amazon's paid cloud service, said Michael Frazzini, vice president of Amazon Games.

The company's own game studio last week released its first three titles made with Lumberyard. The computer games were designed for both playing and watching on Twitch, which is the third-largest source of U.S. internet traffic, trailing only Netflix and YouTube, according to network researcher DeepField Inc.

Psyonix Inc. uses Epic Games's Unreal engine, which charges an average royalty of 5% of sales. With Unreal, Psyonix developers were able to make cars from their hit soccer-racing mashup "Rocket League" glide along stadium walls and fly through the air -- no complicated math required.

"I didn't get into games because I wanted to create a better way to develop graphics," said Dave Hagewood, chief executive of Psyonix, a 60-person company. "I wanted to create gameplay, design rules and characters." He declined to say how much Psyonix spends licensing Unreal.

EA's gambit a decade ago to make all its console and PC games with one engine failed.

Wedbush Securities analyst Michael Pachter estimates by using Frostbite alone, EA could save about $20 million a year.

Money isn't the only gain, Mr. Söderlund said. He stressed the intangible gains, such allowing EA's different studios across the globe to more easily collaborate, as they did by using code from "Dragon Age: Inquisition" in "FIFA 17."

"We'll see a lot more of that going forward," Mr. Söderlund said.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

(END) Dow Jones Newswires

October 10, 2016 14:32 ET (18:32 GMT)

Electronic Arts Inc. (MM) (NASDAQ:ERTS)
Historical Stock Chart
From Oct 2024 to Nov 2024

Electronic Arts Inc. (MM) (NASDAQ:ERTS)
Historical Stock Chart
From Nov 2023 to Nov 2024