EA: Digital-only future for console games is not happening soon
CFO Blake Jorgensen reveals full-game downloads of EA games make up "much lower" than 30 percent of all units sold; CEO Andrew Wilson says Apple and Google may challenge Microsoft and Sony in the living room.
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The future of the games industry may be the near-total digitization of products, but that future appears to be a ways off for console titles at least, if comments from Electronic Arts CFO Blake Jorgensen are any indication. Speaking today during the Credit Suisse 2013 Technology Conference, the executive was asked to say when he believes one-third of all EA games will be sold via full-game downloads, to which he responded by saying not anytime soon.
"I don't know when the 30 percent target hits. That's probably still a ways off. We're much lower than that today on full-game downloads," Jorgensen said.
All Xbox One and PlayStation 4 retail games are available day-and-date digitally, but Jorgensen said bandwidth speeds continue to be an issue for consumers. What's more, the rise in game file sizes has offset increases to Internet download speeds, he argued.
"I think a lot of the constraint there will continue to be bandwidth into people's homes," Jorgensen said. "At the same time, the size of games has gotten bigger and more complex and so it's eaten up some of the benefits of [increased] bandwidth."
Ultimately, however, Jorgensen explained that "the trend is in the right direction." The move towards a fully digital landscape will benefit EA's economics, because digital games have a higher margin compared to physical products, which must be sold in stores, Jorgensen said.
During the same call, EA CEO Andrew Wilson said the recent successful launches of the Xbox One and PlayStation 4 suggest that people continue to enjoy a traditional living room console experience. Along with this popularity will come new competition from major companies like Apple and Google, among others, he argued.
"Our market is evolving at a very, very, very rapid rate," Wilson said. "I think that Microsoft and Sony have a real opportunity to build a strong following and a strong install base while they continue to be the single-best way to get high fidelity, high-definition interactive entertainment to your 80-inch television. If you think about Microsoft's strategy--and I think Sony shares some of this at least in their long-term view, of being a broader entertainment device in your living room--I think they have that time. I think that three years from now, four years from now, they're going to be under some fairly stiff competition for the living room, from mobile providers, from Apple, from Google, from Roku, from Comcast, to try and own that living room experience."
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