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EA CEO thinks 2011 is the year digital sales overtake retail

If the crystal ball that EA CEO John Riccietiello is looking into is correct, than 2011 will be remembered as the year that digital broke... broke retail sales, that is, as he believes that digitally distributed software will overtake retail packaged goods this year, and he makes a pretty compelling argument.


Above: “You will pay more often for that which does not exist. For real.”

In a recent interview with Industry Gamers, the EA head is decidedly clear on the subject. "At the end of [2011], the digital business is bigger than the packaged goods business, full stop. No questions in my mind.”

Citing the success that Turbine recently enjoyed when it tripled its revenue with the now-freemium Lord of the Rings Online, Riccitiello says that business models like these will “find their own feet."

"We’re very careful about making sure we price appropriately for platform and also for the intellectual property,” he added.

No strangers to the success of the free-to-play model, EA’s biggest ARPU (average revenue per user) games are similar to the LotRO model, and they’re proving that he’s right. “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."

Finishing the interview with advice to publishers about being flexible, the CEO also says that it’s not worth it if said publishers decide how consumers want to buy their content. Be it iPad, social network, micro-transactions, or subscriptions, it’s best to let the consumer base decide which model emerges as the best. “We’re in all of those businesses,” he said, “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."


Above: This, friends, is what “triple the revenue” looks like - boozed-up short people 

Will the micro-transaction/subscription/free-to-play models take over the gaming industry? This being January and 2011 still having a long way to go, it’s a little difficult to side with it; especially if the three major consoles and their slew of packaged retail content have anything to say on the matter. Still, it may not be a bad idea to upgrade that hard drive. You know, just in case.

[Source: Industry Gamers]

Jan 10, 2011

13 comments

  • The4X - January 12, 2011 5:46 a.m.

    RESIST!
  • oryandymackie - January 11, 2011 5:47 p.m.

    EA CEO is mistaken.
  • Hammerburst - January 11, 2011 3:54 p.m.

    @jmcgrotty Not to burst your bubble, but take one look at how much revenue steam takes in, then call it pathetic. They make so much, because they have competitive prices, that benefit both the gamer and them...
  • jmcgrotty - January 11, 2011 8:04 a.m.

    Digital distribution is a pathetic scam. Don't fall for this crap.
  • podsaurus - January 11, 2011 5:42 a.m.

    True I download lots of steam but I like to physically have the game in my hands.
  • venom65437 - January 11, 2011 3:39 a.m.

    I predict...he's wrong.
  • laurenhiya21 - January 11, 2011 3:18 a.m.

    digital overtaking retail? i doubt that would happen this year... i personally prefer hard copies of games, mainly because I know that if my computer crashes, I won't lose my game (i might lose my game FILE, but at least i wouldn't have to pay for the game all over again...) but i don't know most people feel about this so... i dont know for sure (but it IS EA saying it, so i doubt it would count for much :l)
  • FauxFurry - January 11, 2011 3:11 a.m.

    That's quite a bold claim to make,no matter how much they've made thus far on micro-transactions or DLC. It would have been more reasonable to predict parity in sales between retail and digitally distributed game related sales. You've got to take baby steps before walking on the Moon. Those Magic 8-Balls lie,telling you whatever you want to hear so you don't dash them to bits against the nearest wall or the pavement to unlock their secrets. One shouldn't trust them as industry analysts...well,any more than any other industry analyst,any way.
  • Eliath - January 11, 2011 3:01 a.m.

    Able was I ere I saw Elba.
  • celticsfan645 - January 11, 2011 2:19 a.m.

    @bobbybroccoli I please ask you not to write that sort of filth on this fine site. A wise man one said "The french are good at two things; baking bread, and losing wars" While due to thier lack of winning, the word premier may be used rarley, it is still unacceptable. I expect a public apology. or elsee.....
  • Heyexclamationpoint - January 11, 2011 1:50 a.m.

    You might had gotten away with it if you didn't explain what Premier meant.
  • bobbybroccoli - January 11, 2011 1:35 a.m.

    Premier is first in french. That makes it okay to say.
  • bobbybroccoli - January 11, 2011 1:35 a.m.

    He is quite mistaken. Premier

Showing 1-13 of 13 comments

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