EA: Digital downloads to overtake boxed games in 2011

EA boss thinks revenues from digital will outstrip traditional boxed retail in the games industry in 2011
EA boss thinks revenues from digital will outstrip traditional boxed retail in the games industry in 2011
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Electronic Arts' CEO John Riccitiello thinks that the revenues from game downloads will outstrip those from traditional boxed games in 2011.

The EA boss also thinks that games publishers will soon be selling traditional full-price titles in more-affordable digital chunks in the very near future, a plan which Peter Molyneux has been a staunch advocate of over at Microsoft Games Studios.

Steaming ahead

Downloads on online game stores such as Steam, Xbox Live, Sony's PlayStation Network (PSN), Apple's App Store and networks such as Facebook are soon set to be a more important source of cash than the good old disc in a box model, which has served the industry well for the last two decades.

The EA CEO notes that: "At the end of [2011], the digital business is bigger than the packaged goods business, full stop. No questions in my mind. Then, you know, I think that we'll find ways to even sell our packaged goods content in chunks and in pieces and subscriptions and micro-transactions."

"Look at what Warner and Turbine did with Lord of the Rings Online. While I still think the majority of their revenue is from people giving them the premium subscription for fifteen dollars a month, there's a lot of people coming in and they upgrade."

Dirty little secrets

Riccitiello also says that micro-transactions in the free-to-play model are becoming increasingly important for EA, noting, "Our highest ARPU (average revenue per user) are free-to-play games among paying users. You think about that and say, 'how can a free game be the game they pay the most for?' We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it's free. Dirty little secret.

"I actually don't think that there's a lot of mileage in trying to decide exactly how consumers want to buy their entertainment content. They may want to buy it on an iPad; they may want to get it through the social network, they may want to pay for it through micro-transactions and monetizing, or they may want to pay for it all at once.

"They may rather pay a subscription price in order to count on what their costs are going to be, but they may want to pay for it all at once and never have to pay for it again. We're in all of those businesses and I think the way this is going to work is that the models that the consumers like the most are going to grow the most."

Via Industry Gamers

Adam Hartley