EA will be 100 percent digital, says exec
[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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