In our December 2003 profile of Lawrence F. Probst III, we wrote that his "reserved curmudgeonliness recalls Gimli, the gruff dwarf from Peter Jackson's 'The Lord of the Rings.'" What a difference two years makes. From the moment we sat down to breakfast in the dining room of New York City's Pierre Hotel, the dry wit of Electronic Arts CEO Larry Probst was on full display, whether it was engaging in small talk about his children or waxing comic about his friend and fellow CEO, Warner Music Group's Lyor Cohen. In Part I of our three-part interview with the head of the world's largest videogame publisher, Probst discusses PlayStation 3's supply problems, the puzzling lack of demand for Xbox 360, and how many games EA plans to make exclusively for the Wii. But it was Probst himself who posed the first question, asking us "Did you get a PS3?"

I did, fortunately.

You did?

Being a journalist helps.

You did better than EA. [Laughs.]

Here's my first question. PS3 is supply constrained and will likely remain so until early 2008. 360 demand is--

Whoa, whoa, whoa. Early 2008?

You don't think so?

I don't think they'll be supply constrained that long. You think all through 2007 they'll be supply constrained?

Well, looking back to the PS2 launch, Sony shipped a million units for the Japanese debut, most of which sold in the first 48 hours. But for the Japanese launch of PS3, they only shipped around 80,000 units, more than ten times fewer machines. So they're nowhere near meeting demand in Japan. In North America, Sony shipped just under 500,000 units for the PS2 launch, but only 200,000 units for the PS3 launch. So they don't have enough supply to meet demand here. Sony launched in Asia with less than 20,000 units. And early next year, they have to start stockpiling units for the European launch in March 2007--assuming that date doesn't slip. So we're looking at four territories where supply probably won't meet demand, and by the time Sony starts to catch up, it'll be holiday 2007, where the combination of big AAA games and gift-giving will increase demand even more.

So you're not believing their projection of 6 million units shipped by the end of March?

Even if they somehow get to that, will that be enough to satisfy the global demand?

I don't think that they would catch up in the first quarter of 2007, but at some point in calendar '07 I think they catch up to demand. I don't think it takes until the early part of 2008. It doesn't happen in early 2007, but it happens in that year.

But as long as PS3 remains supply constrained, and as long as Xbox 360 demand is falling short of Microsoft's projections, that leaves Nintendo's Wii as the only platform that has both high supply and high demand. Yet the bulk of EA's AAA titles are oriented towards the PS3 and the 360. How have you adjusted your development plans in light of where things stand right now?

We have two titles at launch for the Wii. We will have five or six in the market by the end of our fiscal year [March 31, 2007.] We have a number in the low to mid-teens planned for [the next] fiscal year. I think we're going to catch up pretty quickly in terms of a broader portfolio on that platform.

Historically, it's been very difficult for third-party publishers to achieve strong sales on Nintendo platforms. If DS is the leading handheld, and Wii is the home console with the most momentum, doesn't this create a significant problem for EA and other publishers whose franchises and whose core DNA is much better suited to PSP, PS3, 360 and PC?

Look, you have to take a long-term perspective on this. This competition between Microsoft, Sony and Nintendo is going to play out over multiple years, not multiple months. You're going to see us be very prolific on the Xbox 360 and on the PlayStation 3, as we historically have been. And you're going to see us be more prolific on Nintendo's platform than we have been in the past.

I don't think the Wii is going to be any different than all the other Nintendo platforms. Nintendo is going to have a very significant market share, and all the third party companies are going to have market shares that are single-digit or low double-digits. We think that we can be very competitive in that environment. We don't have any expectations that we're going to have a 30 percent market share, as we have had on Xbox 360, on PlayStation 2, or what we're targeting on PlayStation 3. But I think we can have a meaningful market share on the Wii platform, and be in the number two position behind Nintendo.

Given the early success that Ubisoft is having with an original and exclusive Wii game like Red Steel, do you have plans to follow suit, or will you continue to serve Wii with brand extensions and ports optimized around the Wii remote?

I guess I already let the cat out of the bag on the My Sims for the Wii, didn't I? Because I was chastised for talking about that on the [earnings] call. So the answer is, we are doing a Wii-specific Sims SKU that will launch mid-year in 2007. We have some things in the pipeline that are Wii-specific, that we think are going to appeal to that demographic pretty successfully. You'll see us have products and franchises that are also on other platforms, but there are some things in the pipeline that are Wii-specific.

In order to get to that number two position on the Wii, what's the correct balance of original or Wii-specific games versus multiplatform franchises?

Let's say that we do 12 or 13 SKUs next year on the Wii. I would imagine that about ten are products that appear on other platforms, and there might be two or three Wii-specific products, including Wii Sims.

Universal Music Group, the largest record label in the world, gets a dollar in royalty from every Zune digital media player that Microsoft sells, in addition to the lion's share of revenue from every one of its songs--

Wait a minute. They get a dollar for every Zune?

Yeah.

Do all of the music companies have that deal?

As far as I know, it's just Universal Music Group.

Why do they get that?

That's a good question for Microsoft. Now as I was saying, your company is the world's largest videogame publisher, yet by contrast, you pay Microsoft a royalty for each and every one of the games you publish for Xbox 360. Given the importance of brands like EA Sports, The Sims, and Need For Speed, shouldn't you expect similar terms for the Xbox 360 as were granted to Universal Music Group for the Zune?

Good idea. I'll take that up with [Microsoft president of entertainment and devices] Robbie Bach the next time I see him. But in all seriousness, Microsoft has been very supportive and a really good partner as a hardware company. We're pretty satisfied with that relationship. So you're telling me that the Warner guys don't have that same deal?

Not as far as I know.

I'm calling [Warner Music Group CEO] Lyor Cohen to give him a hard time. [Laughs.] Is that public knowledge?

They announced it. It's real.

I'm going to yank his chain. I'm going to go into his office and say, "Hey, Lyor..."

[Laughing] Well, tell Lyor I said hello.

I will.

Next: In Part II, Probst explains why PlayStation Portable won't get any original games from EA. In Part III, Probst defends microtransactions and FIFA 07.