EA - "Going to be 100% digital"

CountChocular points out comments from EA's Labels president Frank Gibeau saying the company is heading for a "100% digital" future and calling NPD's retail data "irrelevant". The comments aren't quite as provocative as the sensational headlines initially suggest, though obviously they set the tone for EA's strategic direction:

Electronic Arts is one of the publishers in this industry that is at the forefront of the digital transition. The company recently had its first year of digital revenues over one billion dollars, and now EA is expecting that number to jump closer to $2 billion (guidance of $1.7 billion in digital revenues this year). For EA Labels boss Frank Gibeau, the business is clearly at a tipping point. He told GamesIndustry International recently that EA clearly will be 100 percent digital in the near future.
We asked Gibeau point blank when the company will have most, if not all, revenues coming from digital products. It's not as far off as one might think.
"It's in the near future. It's coming. 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 enthused.

More information.

Not sure why this is news. EA has and always will do anything that milks the very last penny from their fans at the least expense to them. If they were an airline they'd charge you to use the restroom, and the 'toilet' would be nothing more than a hole in the fuselage. Oh, you want not to get sucked out, too? That's DLC. And toilet paper? Should have bought the "Collector's Edition"…

even if EA was twice as bad as numerous corporations out there that effect far more than gaming habits, it still would bother me far less. that said fantasyland is more fragile so i guess it makes sense when EA who seems to have nearly zero sensitivity to what fans want draws as much ire as they do.

Well just a reason for me to completely ignore their mostly crappy games even sooner. I don't like digital distribution but I guess I am in the minority. I like getting an actual product with a paper manual.

Funny that blurb sounds like he trying to sell it like they are doing this for the customer…that is just laughable…come on dude we all know its about lowering cost.

So I wonder will titles that normally cost 60$ be reduced to like 40$ since they dont have the retail distrubution costs? I wont hold my breath.

EA is the 'McDonalds' of gaming. If they think it's a fantastic idea to not put retail boxes on store shelves and lose out on the de facto marketing it offers, more power to them. This just makes it all the easier for me to continue ignoring them.

Originally Posted by Saxon1974
So I wonder will titles that normally cost 60$ be reduced to like 40$ since they dont have the retail distrubution costs? I wont hold my breath.

Until retail dies completely, it won't happen. There's laws that stop digital distribution services from charging less than retail at release. It's fair game 6 months after though, so as long as EA sell their games on GamersGate you should find their product for under $10 in about a year when on sales (they are always more expensive on Origins despite sometimes having sales).

I have trouble seeing them sale full Xbox games in a digital form though. The Xbox network have a cap of 2GB for downloads…

!00 % digital ? - Well, the Digital Generation Strikes Back … This clearly rules out older gaming generations who still prefer retail … They are deemed a minority, then …

EA going 100 % digital ? And how, please, are they going to bring this in accordance with the [rather strange, from an international view, I guess] German market ?

Walmart - another giant - has already withdrawn from there, because it was different than they had expected it to be.
[Provocative : ] Will EA be the next [giant] one ?

Could be worthwhile if retail versions were not most of the times digital distribution versions burned on a DVD.

Okay, people want a paper manual and a few other physical goods but…

Not only is this for squeezing money out of us but to prevent piracy. Not sure if anyone has cracked the Origin DRM yet but we all know EA game piracy is/was rampant.

The reason is………well people seem stupid.See GOG started out with game for cheap.People flocked and business boomed.So they upped their prices and guess what…people flocked and business boomed still.I even seen it where people were just buying games to have a collection knowing full well they will never play them…..OMG


Look at digital downloads of games…..they cost the same as when you buy the boxed version.Well then….the fools are the customers since they buy these items while getting ripped off and have no cares about it.

So yes EA took this and will run with it till you cry.

Originally Posted by wolfen
Look at digital downloads of games…..they cost the same as when you buy the boxed version.Well then….the fools are the customers since they buy these items while getting ripped off and have no cares about it.

Well, basically, these days I get nothing extra that I care about when buying retail, anyway. In fact, I get the inconvenience of having a physical medium to store along with the dozens of other games that I don't have room for and I have to swap in the disc if I want to play different games. For me, the digital version sometimes has more value than the physical version, regardless of the fact that there are less manufacturing costs.

What am I to do, demand cheaper prices for digital downloads? It is what it is…

I like being able to buy and download games on the fly in front of my computer. However, I would really prefer if more people used the GOG.com model where you download a working installer and that's it. It means I can back up games on external HDDs and similar if needed. I worry about what will happen the day EA, Valve or similar either run out of business or decide they need to get rid of some older games that people hardly download anymore.

It's not at all unlikely that I will dig up games like Skyrim and FNV 10+ years from now, will Steam still support them at all? What about Mass Effect? EA has already turned off the support for one of the ME1 DLCs (Bring Down the Sky if I recall correctly), getting it without pirating is almost hopeless now. The only way to do it is to contact EA and get them to send you a working code, as the old code is nowhere to be found on the EA profile anymore.

Originally Posted by Alrik Fassbauer
EA going 100 % digital ? And how, please, are they going to bring this in accordance with the [rather strange, from an international view, I guess] German market ?

Can you explain a bit more about this? Why wouldn't publishers be able to switch to digital downloads in Germany?

Originally Posted by Alrik Fassbauer
!00 % digital ? - Well, the Digital Generation Strikes Back … This clearly rules out older gaming generations who still prefer retail … They are deemed a minority, then …

EA going 100 % digital ? And how, please, are they going to bring this in accordance with the [rather strange, from an international view, I guess] German market ?

Walmart - another giant - has already withdrawn from there, because it was different than they had expected it to be.
[Provocative : ] Will EA be the next [giant] one ?

Well given the (small) overhead to be able to digitally transfer to Germany when you are already doing it for the rest of Europe I doubt they will mind if the German market isn't the largest.

Originally Posted by wolfen
Look at digital downloads of games…..they cost the same as when you buy the boxed version.Well then….the fools are the customers since they buy these items while getting ripped off and have no cares about it.

It might be a bit worse. As soon as retail versions are eliminated, control over price is accrued, due to a weaker to non existent second hand market.

To get your game at a discount, you are now mostly dependent on flash sales (or other volumes operations), which are decided by publishers when they need to beautify their account books for example.

Stay tuned or face paying a five years old games at a higher price you would have on a second hand market.

Originally Posted by ChienAboyeur
It might be a bit worse. As soon as retail versions are eliminated, control over price is accrued, due to a weaker to non existent second hand market.

To get your game at a discount, you are now mostly dependent on flash sales (or other volumes operations), which are decided by publishers when they need to beautify their account books for example.

Stay tuned or face paying a five years old games at a higher price you would have on a second hand market.

Where I live in the US, there is no second hand PC games market at all, yet PC digital downloads can often be purchased for less than $10.

Pricing decisions are about setting the price that will result in the most total revenue, not necessarily the most revenue for each unit sold. Despite lower cost of production, digital downloads may be priced the same as retail copies at the time of initial release in response to demands from retailers worried about cheaper digital downloads cannibalizing their sales.

By eliminating manufacturing costs, retailer margins and in-store marketing costs, and without needing to match retail prices, publishers can set whichever price for their product would result in the greatest total revenue, which may be much lower than $60.

No bargain bin discount, nothing like that? This explains things.

Digital downloads have this good, prices are accessible anywhere for anyone with an internet connection.

Pricing decisions are about setting the price that will result in the most total revenue, not necessarily the most revenue for each unit sold. Despite lower cost of production, digital downloads may be priced the same as retail copies at the time of initial release in response to demands from retailers worried about cheaper digital downloads cannibalizing their sales.

That is to be applied to a second hand market seller.

And the answer will be known about retailers pushing the price up anytime a publisher goes fully online digital distribution.
A stub of answers is already provided by DLCs as for the most of them are only available from digital distribution. A mischievious mind could state that it pushes toward concluding that the pressure of retailers drives down the price, not up.

I'll make a newspost about this in a minute bit here's Eurogamer's article about the verdict that the EU court has just published:

http://www.eurogamer.net/articles/20…wnloaded-games

It basically says that what is in the headline…

Originally Posted by ChienAboyeur
That is to be applied to a second hand market seller.

Can you explain a bit more? Why would publishers care if second hand retailers complain?

I refer to the first line. Not about the complaints from retailers.

A second hand seller has to set the price with the same concern in mind.