14 DAY TRIAL // Digital distribution is set to become more important and profitable than the traditional one, at least according to Electronic Arts boss John Riccitiello, who shared his thoughts on the retail business.
Digital sales are becoming an incremental part of the whole gaming industry, with games and other content being distributed through an array of online services, ranging from Steam to Xbox Live or the PlayStation Network, not to mention Apple's App Store or Facebook.
While this trend has been ignored by some companies, in 2011, EA's boss believes digital sales are going to surpass those of regular boxed games.
"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," he told IndustryGamers.
Riccitiello then exemplified, saying that his company's free-to-play titles, like Battlefield Heroes or Need for Speed World, are among the most profitable, surpassing regular, $60-priced games.
"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."
What's the EA's special secret? It's about offering lots of choices for people that want to spend money on digital content.
"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."
EA's preparing quite a lot of downloadable games, not to mention a brand new free-to-play Battlefield game called, what else, Battlefield Play4Free, while its upcoming triple-A titles, including Dead Space 2, Dragon Age 2, Battlefield 3 and more also have a solid post-release downloadable content strategy already in place.