[UPDATE] EA Games president says it's "inevitable" that company moves entirely to digital distribution, calls monthly NPD reports "irrelevant"; NPD Games president "surprised" by comments.
Mass Effect and FIFA publisher Electronic Arts is mapping out a path that will see it transition eventually to a 100 percent digital business, EA Games president Frank Gibeau told Games Industry International in an interview published today.
"It's in the near future. It's coming," he said. "We have a clear line of sight on it and we're excited about it. Retail is a great channel for us. We have great relationships with our partners there. At the same time, the ultimate relationship is the connection that we have with the gamer. If the gamer wants to get the game through a digital download and that's the best way for them to get it, that's what we're going to do. It has a lot of enhancements for our business. It allows us to keep more that we make. It allows us to do some really interesting things from a service level standpoint; we can be a lot more personalized with what we're doing."
Gibeau made clear that EA will not make such a transition overnight, and that if gamers want titles at retail, EA will deliver them there.
"But if customers want to buy a game at retail, they can do that too. We'll continue to deliver games in whatever media formats make sense and as one ebbs and one starts to flow, we'll go in that direction," Gibeau said. "For us, the fastest growing segment of our business is clearly digital and clearly digital services and ultimately Electronic Arts, at some point in the future…we're going to be a 100 percent digital company, period. It's going to be there some day. It's inevitable."
In May, EA revealed that its digital business was booming. This particular sector of the publisher's business brought in $1.2 billion for the year between its downloadable games, subscription fees, add-on content, and mobile and social platforms. Additionally, EA said its digital business will grow in the coming year.
"In the coming year, we break away from the pack, with a very different profile than the traditional game companies and capabilities that none of our new digital competitors can match," EA CEO John Riccitiello said at the time.
Elsewhere in the interview, Gibeau spat some harsh words at industry research firm the NPD Group. He said a big problem with the industry today is that it is viewed by people like an "elephant through a straw." This view, he says, leaves out important distribution channels like Facebook, mobile, and free-to-play games.
"An occasional bad report from NPD, which measures a sliver of what's actually happening in gaming, gives people an erroneous impression," he said. "My point is it's an irrelevant measure on the industry. It's totally irrelevant. We don't even really look at it internally anymore. We're more focused on our services and how we're connected with consumers. The number of Nucleus accounts we're growing, the amount of engagement time that we have, the amount of services that we're running--those are more important metrics for us than unit sales according to NPD and North America."
[UPDATE] Following the publication of this story, NPD Games president David McQuillan issued a statement to GameSpot regarding Gibeau's comments. He admitted digital is a significant component of the industry, and said he was "surprised" to hear what Gibeau had to say.
"While digital is a growing part of the industry and something that needs to be addressed for the future, the current games industry is still largely rooted in retail and any industry player involved with AAA content simply can’t take their eye away from the retail environment," McQuillan said. "Successful companies are looking at how their products are performing within all channels, particularly retail."
"For that reason, we were surprised to read the comments by Mr. Gibeau that EA does not look at NPD data internally at all. While we will not comment on the specifics on our long-standing relationship with EA, we can say with confidence that we have daily dealings with all of our major publisher clients. And we know for a fact they’re using the data."
"According to our latest estimates, new physical software represented 56 percent of the consumer spend on games content in the U.S. in 2011, and 70 percent in Q4, specifically. If a publisher that produced AAA content were in a position where they could not access NPD data to analyze, review and benchmark against competition and the rest of the market, we would think they would be challenged to effectively manage an important part of their current business and their relationship with the retail community."
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Wow-EA`s president is in his own little world;they need to look at the
whole picture, not just the dollar signs! This rise in digital wont last-I see it as just a faze,and if these companies put everything into this-they`ll lose everything!
EA is like Obama, no matter what people want they just won't listen, they'll do what is best for illegal immigrants and tax people for health insurance... no wait, what?
Translation: We are working out the best way to cut out retailers altogether allowing us to keep even more money for ourselves!
If they go all digital they'll lose a lot of money from those who have severe download caps or just don't have broadband in their areas.. It's obvious why they want to go digital, but they need to make sure their is an infrastructure in place for broadband so everyone has access to it. Entering the digital only age too soon will backfire and they'll lose money without offering a disc version too.
The big issue I have with digital is what happens when said company sells out, goes out of business or decides they don't want to do digital gaming anymore? All your money on those games linked to your account will no longer be accessible.
News flash everyone, MOST COMPANIES "want" to go all digital eventually because they'll make more money. They'll still charge $50-$60 but they won't have to make physical disks or instruction manuals or anything else that costs money to produce. They'll maximize profits and then after you've "owned" a game for a year or two and they take it off their server, if you uninstalled it at one point and then want it back again, they'll charge you a fee to get access to it....even though you already bought it once. It's the ultimate way for them to milk us of all our cash and people will line up for it because they just have to have the newest thing and can't be left out of the crowd, even if that crowd are a bunch of morons with more money than brains....
@RavenXavier This is a sad fact but the digitalizing itself of random medias is not a good thing and should be encouraged but EA and other companies (much like Steam/ EA) are taking this to a new level where regular users eventually will lose their bought medias due to limitations from the suppliers and EA are the best when it comes to ruining and screwing up over and over again with their bullshit much like where they said some time ago we have limited our BF2 Modern Combat@PS2 services which meant for new guys and regulars much like me lost our opertunity to create new account and are now FORCED TO ONLY USE OUR OLD ONES IN ORDER TO PLAY ONLINE!
Money on digital games is just a wastefulness, just like throwing your hard earned money over the window.
I have a great idea for a game console. You download the game you want then delete it when ur done only to free up room for another game to repeat it over and over and over again. Really????? Talk about throwing ur money away. So will consoles then come with 5TB hard drives?
EA can wither and die if they go all digital. I'm not buying Minecraft until I get a retail box with a disk and a printed manual, and EA will get nothing from me without a retail box, a disk and a printed manual. I like SimCity 5, but I also need to know how to play it. And I need to be able to install it WITHOUT A NETWORK CONNECTION (I'm looking at you, Blizzard morons!!!!). I'm sick of having to take untold hours to install a game over the net that I just bought retail, and I'm sick of having the lag monster kill my game every time my local neighborhood decides to stream internet movies all at once. I'm on the butt end of a network trunk, and my ping times can be in excess of 750 ms. I can't play games over the network because of this. I sure as hell don't want to have to download them, either. That's why I pay more for retail. Get it straight, EA, you'll lose my money if you take that route. And I guarantee you my network connection won't be upgraded within 10 years. I'm too far out to have gigabit ethernet put underground.
@VarietyMage I don't know where you are, but I'm in the same boat. Even generally in Australia high-speed broadband in either unavailable or too expensive for a lot of people to have decent download on. I couldn't afford a big monthly cap just to download a game every couple months. Currently my net is so bad it frequently doesn't work, and at the best of times I couldn't even download Journey successfully. Never had enough bandwidth to play online. All digital EA is the sad day I have to stop upgrading FIFA...
I just...don't know what to say about EA anymore. My neck has been sore for months shaking my head at them. They're not even trying to cover up their selfishness. They're just straightforward assholes about everything.
It makes me wonder when they say " the fastest growing segment of our business is clearly digital" (says them!) are they speaking the truth or just saying this shit to hype it all up and make us think "every other gamer" must be going digital, so I better covert as well. You know the story about the Lemmings right? I would love to see their sales break down analysis. I'm not convinced.
Are we against EA or digital retail? STEAM is has been successful and its been that way for a very long time.
Other publishers/developers such as Blizzard are also offering their software in digital format.
There are digital comics, mp3's, digital movies... its only natural that video game would eventually go that route as well.
Old schoolers will always want a physical copy, but I believe that new gamers who are into the whole app/mp3/kindle thing will embrace digital retail.
A question about "digital comics" if I may. Is there ANY re-sale value in them at all? I have a comic book collection that I started when I was 10 years old (I'm 34 now). I have some books that are worth hundreds of dollars by themselves. If I want I can try to sell them for lots of money later down the road to help send my future kids to college. How would you do that with a "digital comic"? Can they even be re-sold or "collected" at all?
As I said above, I'm against digital retail. You're dependent on the website for licensing, and if it goes bankrupt, or gets bought up by another company, all contracts for the software you bought can be rendered null and void if the purchaser or liquidator feels like it. Also, there's the network connection issue, where you need a solid connection to download games in a reasonable time, not to mention play them (like Diablo 3, where you need a stable high-speed internet connection to play the SINGLE-PLAYER version of the game). It's not worth it. I have games from 30 years ago, and I'd like to keep the games I'm buying now for another 30 years (I'll game until I'm dead or can't use my hands). I'm not guaranteed that with any digital distribution network, and the newer games are becoming dependent on that medium (they might just disappear like Star Wars: Galaxies).
The EA management want a cloud-based business, that's pretty clear... The retail they'll be offering will be a code on a plastic card...
why do they talk as if everyone in the world can afford the kind of internet these guys can afford and that everyone gets the same quality of connection like they do everywhere in the world. as real as the gaming is in our world, these guys issue statements about providing services that maybe totally otherworldly for many of the people into gaming.
The second thing I hate the most after taxes, is a company that doesn't pay its taxes and doens't give me a rebate in return.
I disliked EA for a while but was willing to pay for a good quality new game. This re-focus towards digital, which is obviously not about giving the gamer a better deal and more about squeezing every last drop from them, is making me reconsider that exception.
The reason STEAM works so well is they sell top games at cheaper prices. Usually 1/2 or less for a lot of their games. If they were selling all their games at $49.99 - $59.99 it would have failed miserably a long time ago. EA will need to do the same thing.
NPD is useless to me since they decided not to show all the information to the public. As long as EA have these games at retailers, I don't care what they do digitally. I'm not going to pay $60 or $50 for DD game. Sorry, it's not going to happen. If they want to going 100% digital, they better cut their prices in half across the board.
We should all chip in a penny and buy 1 hardback copy of dragon age 3 and share between ourselves, that would f*** with their minds
Digital distribution is a huge part of the industry and can only get more involved. I do not think a publisher needs to go 100% digital with their distribution because there are plenty of people still stuck on less than stellar connections. At the very least, still offer physical copies through e-tailers like Amazon for those folks.
With zero competition between retail markets what will force the prices down ?
From my experience so far on PSN purchasing a physical copy of a game is always cheaper than buying one online. This whole "it will be cheaper" etc is a fallacy. Games will be the same price and without retail stores forcing prices downwards I am willing to bet that we'll end up actually paying more due to no competition.
@AussieDCO I see no competition for the PSN. when you buy an xbox or ps3, you have to buy everything from those companies. on the other hand for the PC market we have retail and thing like steam.
i have to say i love steam. they normally have discount and bundle for there game and DLC. when was the last time you saw a deal or reduced price on DLC from a game publisher, the xbox or the PSN.
@AussieDCO "I am willing to bet that we'll end up actually paying more due to no competition."
Your only experience is a market where one company has a monopoly. Over on the PC side where we have Steam, Impluse/Gamestop, and several others it isn't uncommon to get a game for 75% off. And you can do it without digging around in a big bin full of stupid games.
Is nice to have options when we talk about distribution methods, digital distribution should be optional for the customers, but not this way.
Did you read the whole article? It will be optional for all EA games. They will still be selling their games at retailers as well.
@blackace "For us, the fastest growing segment of our business is clearly digital and clearly digital services and ultimately Electronic Arts, at some point in the future?we're going to be a 100 percent digital company, period. It's going to be there some day. It's inevitable."
This comment was made after he said they would continue to sell retail
This is the truth. Whether you like the idea or not, we are transitioning into a digital age. It's not just in the video game realm, it's not just with technology, it's happening everywhere. Will things ever go fully digital? Doubtful, but there's no denying this is what is happening. Now, how companies like EA handle this transition is an entirely different matter. They can handle it smartly, by listening to consumer feedback and, as mentioned in the article, having an eb and flow approach with the consumer, not just the mediums in which games are sold. They can also handle it quite badly, and when companies like EA do, the consumer base will backlash and, hopefully, they will learn not to f&ck with us.
This is neither praise nor condemnation of EA, obviously. But people need to quit whining, saying they'll stop buying games if things go fully digital. Nobody, and I mean nobody, knows how things are going to play out...prices, content, the market...there are too many variables and too many unknowns to possibly predict what a future of digital gaming would be like. It could be great, or it could be crappy. . Companies like EA will only go as far as consumer allow them to go.We need to continue to make our voices heard and not get taken advantage of. It's that simple.
@shad0wmoses "We need to continue to make our voices heard and not get taken advantage of. It's that simple."
But we should quit whining. Ok, I'm not whining. I am also not going to support EA. It's not a whine, it's a statement. Try not to take it personally, or add tone which isn't there to begin with as you read it in your own head. Your feelings are clouding your perception of what people here (and all over the Internet) are saying. Here's what's "simple":
I'm done buying EA games. It's not a tough thing to do. If you want to pay into their future, go ahead, but quit making a discussion seem like it's anything more than it is.
@MonkeySpot No clouds over here, sir. It's a beautiful night outside.
You would be right, except for the fact that EA's negative perception has nothing to do with this article. It is their long history of questionable decisions that have angered the consumer base. I have no problems with you not buying EA games. In fact, I support your decision. My statement and the topic of this article, however, are not geared toward EA. An EA executive saying one day the medium will be 100% digital really says little about EA and more about the trending state of the medium and technology out of a whole.
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