Digital sales to surpass packaged goods in 2011 - EA CEO

At UBS's 38th Annual Media and Communications Conference in December, Electronic Arts CFO Eric Brown was upbeat on the publisher's presence in the digital goods market. Speaking to analysts and investors, the EA exec said that the publisher is expecting to draw 20 percent of its revenue--about $750 million--from digital business, the vast majority of that coming from downloadable content and full-game downloads.

As for the greater industry, however, that figure could be more than half, according to EA CEO John Riccitiello. As part of an interview with Industry Gamers this week, Riccitiello said that digital goods market will, in his opinion, surpass the packaged goods business by the end of this year.

"At the end of [2011], the digital business is bigger than the packaged goods business, full stop," he said. "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 microtransactions."

"Look at what Warner and Turbine did with Lord of the Rings Online," he continued. "While I still think the majority of their revenue is from people giving them the premium subscription for $15 a month, there are a lot of people coming in and they upgrade. I'm not sure that $15 deal is that great a deal, but that's a separate issue…I think these business models are going to find their own feet. We're very careful about making sure we price appropriately for platform and also for the intellectual property."

Riccitiello went on to note that EA sees its highest average revenue per user (ARPU) from those who play its free-to-play offerings, such as FIFA Ultimate Team and Tiger Woods PGA Online. "You think about that and say, 'How can a free game be the game they pay the most for?'" he said. "We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it's free. Dirty little secret."