EA: The line between boxed and digital is blurring

Publisher EA has offered a detailed insight into its plans going forward, and they reveal an unparalleled focus on digital console content.

Speaking to analyst Michael Pachter, EA’s group general manager Nick Earl explained that the line between packaged product sales and digital revenues would soon begin to blur as EA intends to exploit all of its packaged games with ancillary digital revenue streams.”

All future titles will have to include an online multiplayer component and all will be subject to post-release DLC intended to expand the revenue-generating life of every title the publisher releases going forwards.

Other highlights from Pachter’s report include:

* Frank Gibeau, president of the EA Games Label, says that EA will be far more vigorous in its greenlighting of new projects in the future. The company is not willing to commit capital to new ideas until they prove commercially viable,” Pachter explains.

* Describing CEO John Riccitiello as refreshingly accessible and candid”, the exec reportedly conceded that the company had performed poorly over the first years of his tenure and admitted that the turnaround of the company was taking longer than he originally expected”. Riccitiello believes that EA is currently two thirds of the way through its transformation.

* EA intends to increase its level of outsourcing with a stronger focus on low-cost areas such as Shanghai, Melbourne and Montreal. Greater emphasis will also be placed on sequels as they can add significant content at lower overall cost”.

* Speaking of EA’s acquisition of Playfish, COO John Schappert said that the speed at which casual gaming is growing means that building a way into the sector is too slow – acquisition is the only viable strategy.

* Interestingly, Pachter also speaks of plans to release premium digital snippets of games prior to release. Described as a very long game demo” and comparable in size to releases such as Battlefield 1943, the price paid for the download would subsequently not be redeemable against the purchase of the full game. Nick Earl sees the strategy as a low-cost marketing tool”.

Company management was outstanding in communicating its vision, and we think
that this type of straight talk may convince investors to believe in the EA story,” Pachter’s report concluded.

We think that the company’s more proactive outreach with investors will alleviate investor scepticism about EA’s growth prospects, and we expect its game line-up and digital initiatives to contribute meaningfully to the achievement of its plan in FY11.”.

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