♪ >> the sector is clear. >> not clear, not clear. emily: electronic arts conquered the videogame market by making some of the top console games in the world. from the fifa to battlefield and the sims. in 2013, ea was named the worst company in america by a consumer blog, not just one, but two years in a row, as social and mobile gaming took off. that is when the ea ceo left the company and longtime employee andrew wilson stepped in. wilson, longtime gamer, musician, and surfer has engineered a major turnaround

with ea announcing record earnings in 2017. joining me today on "bloomberg studio 1.0," electronic arts ceo andrew wilson. so let's start at the beginning of your time at ea. in 2013, the company was struggling in many ways financially. , the consumerist named you the worst company of the year two years in a row, but today, it is different. you have reported record profits. what did you do differently? andrew: i have been in the company since 2000. in 2013, they made me ceo. emily: i don't think that is quite true. andrew: somewhere in there is some truth. and we had struggled. and it wasn't because we were a company or because we made bad games. it's because we had lost our focus. we said, what is the most important thing? who facilitates us to do what we love? that's make games.

that's the player. we started every conversation for the longest time and continuing today is, is this good for the player? the worst company in america vote feels like an age ago now, but it's still at the forefront of our memory, is there was a bunch of stuff that we were doing they did not like. there was a bunch of stuff they expected us to be doing and we weren't. and when you run a public company, that's challenging and you have to make really hard decisions about how to make sure the games are great, scalable. emily: tell me some of the hard decisions you made? andrew: just after i got the role, we launched "battlefield 4." biggest first-person shooter game of the year. it struggled with scalability. just the infrastructure. we had to make a judgment. we're not going to deliver more paid content until we fix this for our gamers. a year later, we were launching another battlefield game and it wasn't quite ready. you follow our industry, first-person shooters always launch in the quarter right -- in the biggest quarter of the

year, right before holidays. we had to make a decision for our players. we could launch it, but the game is not ready. so we held it. that was the big move to hold the biggest game in the biggest quarter and ship it six months later. once players started to see that they recognize we were serious. ,we have made a series of decisions like that in service of our player. the thing is you look after , them, they look after you. emily: what are you excited about most this year? andrew: everything we do is fun and exciting, but our ability to reach more and more people through new platforms, mobile, new games, new business models, and new geographies. more people play games now than ever before. that's pretty exciting. when you start to get a point fore you are not building 100 million people, but 2.5 billion people, then you can do impressive and wonderful things. emily: you mention mobile, how much money are you making for mobile? andrew: mobile is a growing

business for us. we had more downloads than any other publisher last year. madden mobile is top of the charts. star wars galaxy of heroes continues to do really well. we have a new sims game coming. emily: do you wish you had a candy crush, angry birds? andrew: angry birds has been and gone. i think candy crush is a tremendous game. the mobile business is tough, but we have a madden. it's right up there with candy crush. galaxy of heroes is right up up there with candy crush. we expect the sims is a big opportunity for us. emily: meantime, the competitive landscape is changing and your competitors keep raising the bar. how would you describe the competition? andrew: it's the competition for time, not just people who make videogames, people who make movies, books, tv, music. it's sports we play, family time. what we are working on building

experiences that enhance all of those things. and so we are not trying to take away from people's lives. we are trying to be additive to it. and in a world where people are doing more and things they've before, the notion that 24 hours in a day is an impediment is no longer an issue for us. i look at my daughter who is five and does seven things at once. our job is how can we enhance their lives and enhance enjoyment and entertainment value. emily: it's interesting to hear you speak about games that way because i think the popular perception of games is that it is a time suck, they are detracting from your life, especially as you get a generation of children getting their social and cultural cues from games. andrew: games allow you to build self-esteem by overcoming challenges. to have self-worth and self-actualization. we build sandboxes they give people the opportunity to create. when we think about why people play games, immersion, social

connection, competition, creation, self-improvement. these are all core motivators of why people play. what we see, for kids who play sports games, their sports iq is higher than professionals. emily: how did you get into the gaming business? andrew: i was kind of wondering around aimlessly. no i had worked in the internet , business. i had been involved in content creation and creative. i was a very diligent sports person. i was involved with surfing, rugby, and it was a little studio from a company called electronic arts making a surfing gaming, and making a rugby game and making a cricket game, and had all these engineers, but did not really have anyone who knew about sports. i got the opportunity to work for ea. fundingt, this of the for a little while and then i

would go and get a real job. 18 years later, here i am. ♪ emily: women have been for so long underrepresented in game makers and in gaming themselves. what kind of progress are you making? ♪

♪ emily: women have been for so long underrepresented in game makers and gaming themselves. not just underrepresented in it, but portrayed negatively. what kind of progress are you seeing? andrew: i think we're making tremendous progress. for the longest time, it was probably 90% males who play games, 10% females. that was not an inviting environment. now it's almost 50-50. we have some work to do on the environment, but when we think about how we portray women in games, we added national women's teams in our fifa game. we added the wnba in our nba game. our lead character in star wars battlefront ii this year is a woman. we released a game called mirror edge where the lead character is

a woman. these are the women that you may not have seen in videogames 10 years ago. it's a strong, powerful, inspiring leaders that our young women playing these games can look up to and be inspired by. there's not gratuitous violence against women. there is not -- the way we clothe them is appropriate. and that's really important to us. and that's not something we mandated as a company. it's something our company believed in intrinsically as a process. as we think about real represent patient of women inside of our games, it also means changing the representation of women inside our company. we are making headway there. we have a lot of great senior creative and business leaders, including members of our board. and the third, which is perhaps the greatest place we can have the impact, inside our communities. we reach hundreds and hundreds of millions of people around the globe and we are trying to foster an inviting and inclusive and diverse community among gameplayers.

and we're trying to change the conversation. we believe by the leadership position we have, we can do that. we are actively taking action around that. emily: online harassment is a problem in general, especially for women on social networks and games themselves. how do we make the environment better for women inside these multiplayer communities? andrew: it's unacceptable; we believe in a diverse, inclusive environment for men and women. and other minority groups for that matter. games should bring us joy and happiness and extend the wonderful things in our lives, and we are taking action. our global community group spends every minute of every day looking at every conversation happening in and around our games and looking for opportunities, not just to police the badness, but encourage the goodness. and as the father of a five-year-old girl, that's

important to me. and as a father of a two-year-old son, i want him to grow up and understand this is not a boy or girl issue, it's an everybody issue. as a boy, i want him to grow up in support of things in service of his sister where she can be anything she wants. emily: the gamer gate campaign led to widespread harassment of women in the gaming industry on social networks. why do you think that happened? andrew: it was a multifaceted problem and very disappointing for me. in my role in our company and we worked really hard to try and quell that and move people on and help people understand. i think that when you get anonymity in the internet, people have a willingness to behave in a way that is unacceptable. part of what we want to do is help people to understand that is not acceptable and foster an inclusive, diverse, welcoming culture for men and women. emily: would changing anonymity and or requiring people choose

their real names, is that an option? andrew: i think that's an internet problem. we'll do all we can to solve the problems we can and be a voice for change and a catalyst for the positive movement that is a diverse and inclusive culture. emily: main street was criticized for not speaking up, was that fair? andrew: i think everyone who was involved in that was criticized by various parties. we came out and clearly stood by, for us, diversity, inclusion, both in our games, in our employee base, in our community. we were very solid on that. and we will continue to do that. i don't spend a of time talking politics, but i do spend as much time as i can upholding the values of our company. emily: an interesting study of behavior found that just kicking out the bad players didn't change so much, that the negative behavior continued. what did make the change was changing the rules and trying to enforce the norms of positive behavior.

are you seeing that? andrew: well, a big part of what we see is that the appropriate representation of women in our games is a big change and a big shift, because not only does that act as an inspiration for young women who are playing our games, who see these characters in our games who are strong, and powerful, and independent, it also helps the boys laying -- boys playing our games that that's exactly as it should be as well. they shouldn't be fearful of this, back away from this, a world where we have equal voice in equal position in the community is a world we want to live in. we spent a lot of time trying to amplify that message among young boys and girls. and we are seeing positive change. emily: there is concern that these issues could get worse as we move into virtual reality. there was a story about a woman being groped in virtual reality.

is this a cause for concern? andrew: i don't know whether it is cause for concern. i think we have to be deliberate about how we make these moves and the behavior we condone in these environments, the game designs and how we facilitates interaction inside virtual worlds because we do know that there are people in this world who don't behave the right way. and we can't be the global censors of all behavior, but we have to be very deliberate about the behavior we encourage in our virtual worlds, and we are spending time thinking through at a design level, platform level, at an interaction level. emily: is virtual reality living up to the hype? andrew: hype is a weird and wonderful thing. we all want virtual reality to be the thing we dreamed of as young people. we want to have the true ability to immerse ourselves in experiences we would otherwise never have the chance to experience.

we wanted to overcome a spatial disconnect between us and our tv screen. we wanted to allow us to be people and do things we could not otherwise do. so anything that has innovative technology, consumer value proposition, low barriers has a big opportunity. emily: so, tell me about your vr efforts and ar efforts. andrew: so vr, we very quickly added the our capability to our core engine. we have a single engine for all our games. we launched our vr experience last year with battlefront and are working on a mobile game. we have both ends of the spectrum. we have to understand how to develop at a core engine level. let's implement that.

the other big challenge is design. the three biggest categories are action-adventure, first-person shooter, and sports. all of which is challenging inside of vr right now. emily: we have seen pokemon go, location-based services, what do your ar efforts look like? andrew: pokemon go gave us a sense of what might be possible. it was a catalyst for for thought. when we look at ar and the things apple and google are providing for us in mobile, think about any information that may overlay an experience to enhance that experience. that might be geolocation, other things that you do in your life, what your friends are doing, what's in your calendar, what is in your fridge. we are looking at how many strings of information does any player have available to them and how might they use those streams of data to extend and enhance their experience so that when i am playing the sims, the amount of eggs in my fridge

might have an impact of how my sim's fed. when i'm playing madden mobile, when i'm at a game i have access to different players then when i'm not at a game. it might mean if i'm at soccer practice, i'm rewarded when i'm back to playing my fifa game. we are thinking about this notion of mixed reality not just in terms of geo-services, but how many streams of data are available and how might we use those to enhance the play experience. emily: we have not seen cloud-based gaming takeoff. there is no netflix of gaming come yet. does that change? ♪

♪ emily: we haven't seen cloud-based gaming take off. there's no netflix of gaming, yet. does that change? andrew: you know, i think the greatest disruptor to the consumption of media

entertainment has been the combination of streaming plus subscription. it as change the way we watch tv, the way we listen to music, read books. the notion a impact our industry is naive. will it take longer? yes. for a bunch of reasons, file size, level of interactivity, design. when you listen to a led zeppelin album on your phone, or your car, or pc, it doesn't change. when we design a game that lives in a streaming world, we have to think about screen size and session time. how does a madden in the cloud manifest on your mobile phone? how does that manifest on your 60 inch tv, and how does it manifest on the dashboard of your car as you drive to work? it's a design challenge there. we have technology challenges with bandwidth and file sizes. we have design challenges from screen to screen, moment to moment gameplay. but i do believe it will play an important part in a world in the future of the same way it does

with movies, tv's, books. emily: your competitors are selling franchises to their games for tens of millions of dollars. what's ea's strategy? andrew: we launched our second year for madden competitive gaming. we were the first partner of an official sports league with all teams and all players involved. we are going into the second year of our fifa competitive gaming and we have battlefield competitive gaming coming. we saw exponential growth and engagement. players who engaged in competitive modes engaged at three times the rate of people who didn't, so we have maintained for some time that competitive gaming is a way to engage a player base. the two greatest positive motivators of human behavior, social connection and competition. emily: how big do think e-sports will be? andrew: human beings love to watch anything where the best in the world are doing it and the stakes are high.

take something that literally 2.5 billion people do on the planet and you have an audience ready to engage. and what we're seeing now is the great players amongst those 2.5 billion players are rising to the top and the stakes are high. when you watch our games being played, it's true entertainment. they are the best in the world doing it and the stakes are high. emily: rogue one did half the box office of the force awakens. overall merchandise sales are slower than when disney first came out with the reboot. can the second star wars battlefront game do as well as the first? andrew: what they said about our first battlefront game was this is an amazing game, but it needs to be bigger, broader, deeper, it needs a single player campaign, it needs space battles, more complexity in

player evolution inside the game, so we have built a game that is three times the size of the first one. it is three times broader, three times deeper, it has space battles, a single player campaign. we are doing everything we can in our power to deliver to our large star wars community the game they want. emily: how do you think about the potential to deepen your relationship with disney? andrew: we have a great relationship with disney. they have some wonderful ip. if there was an opportunity to do more with them, we would because they have in wonderful partners. and i think we complement what they do. if there is an opportunity, we would jump at the chance. emily: would there ever come a day when you don't release new titles on your franchises every year and just release online content like take two with grand theft auto? andrew: the short answer is yes. there's a few things have to happen first.

we do a lot in fifa game and a lot with madden. there is a lot of code we make available as part of the new iteration. but in korea or china, we don't do it that way. every four years, we release a new big code drop and offer incremental change over time. what we see in korea and china and what we see on mobile is a world that might happen in other parts of our business. emily: apple has been pushing to become a bigger platform in games. it hasn't happened. do you think that will happen for apple? andrew: the app store is a big business, and games have been the lion's share of that business. what we are starting to see is subscription services like spotify, netflix, youtube, tidle rise to the top of the app charts, and that's partly because apple and others understand subscription is a really, really valuable way to engage with the consumer base. valuable for the person providing the subscription, and

value for the subscriber. it's a friction free way of ingesting large amounts of content. i think they are doing a great job and you will continue to see games as part of their app store but you might see their business model around games change, and we're getting ready for that. emily: how will the business model change? andrew: if you think about, free to play is a wonderful business model that has allowed mobile to become as big as the console platforms in terms of overall game revenue, but we are seeing a propensity for app store users to engage in netflix and spotify and tidal, and pandora and random dating apps, and they're doing that through subscription. we are looking and saying is there a way we can offer great values to players through subscription and mobile? i don't think we are there yet, but it's something we are looking at. emily: where is ea in five years? andrew: hopefully they still

have an australian has ceo. [laughter] i think what you will see from us as result of our pioneering spirit, as a result of our consumer focus, that we are one of the great entertainment companies and have delivered wonderful gaming experiences to an ever-growing, ever engaging population of gamers of all genders and all backgrounds, and people look at us and think that i'm happy to have them as part of our lives. emily: all right, andrew wilson ceo of electronic arts, hopefully ceo in five years. andrew: we will see. emily: thank you for being on "bloomberg studio 1.0." andrew: thank you very much. ♪

♪ emily: he cofounded tpg, one of the largest private equity firms in the world. jim coulter, along with david bonderman, got their start by investing in a bankrupt continental airlines in 1993. today, tpg has its hands in everything from j.crew to movie studios. health care in china and cell towers in southeast asia. and two of the most prominent tech unicorns -- uber and airbnb. as these companies take longer to go public, tpg's investment strategy is undergoing a new evolution in the era of private markets. joining me today on bloomberg