EA’s Q3 financials have revealed the extent to which the smartphone market has shifted from full price to freemium and microtransaction titles.
Overall mobile grew 18 per cent to $120m for EA for the quarter ending June 30th, with smartphone and tablets accounting for 90 per cent of that. Within that, freemium grew by 39 per cent year-on-year while full game downloads fell 43 per cent.
We attribute our freemium growth to the strength of our portfolio of live service games,” CFO Blake Jorgensen told investors, as per Seeking Alpha, before going on to outline EA’s other digital gains – most notably in the digital console and PC game space.
Full game PC and console downloads represented $71m, up nearly 90 per cent over the prior year. Historically, full game downloads were primarily driven by PC-centric products. However, we continue to see full game download growth on the new consoles.
Subscriptions, advertising, and other digital revenue contributed $80m, up 31 per cent over the same period last year.”
COO Peter Moore added: [Full game PC and console downloads] was split about 50-50 PC versus console.
We were [previously] seeing somewhere in excess of 10 per cent now for full game downloads on the Xbox Live and PlayStation Network. Now it’s between 10-15 per cent of the initial sales that is going digitally full game downloads on those platforms. If we take UFC as an example we saw at the high range of that 10-15 per cent band.
We’re continuing to see a progressive move toward gamers being able to download, because they can now on the next-gen consoles, full games on day one and week one of the ship. I will also add that the transition, though, is working well with our retail partners. Progressive retailers such as GameStop are preselling well our sports titles that are the ultimate edition SKUs, which give $40 of digital content for only an incremental $10.”
EA’s Frank Gibeau earlier this month admitted that the market shift from full price to freemium has dented the company’s success on mobile. Now he has told investors that the particular hurdle has been passed.
We’ve been going through this transition from premium to freemium, and it’s pretty much over at this point,” he argued. It’s freemium from this way forward, and we’re adding a lot of new technology and talent to allow us to operate freemium services at scale.
The key to monetization is value and engagement, and that’s where we’re focused on – building live services for our products that deliver the maximum value to customers over the long term in a highly engaged way.
We organically install very well. Last year, we had about 635m installs across the business. So we generate very large audiences. We don’t have a problem with audience size. Our issue really is engaging them and giving the maximum value over the longest period possible.”