Whatever your feelings on EA, it’s undeniable that the company knows how to turn revenue. Last fiscal year, EA raked in $1 billion. This year, the company expects to bring in almost double that--$1.7 billion. Considering the rising dominance of digital in the marketplace and EA’s launch of its digital distribution client Origin (which just turned one this past month), just how much of that expected $1.7 billion comes from the digital space?
EA Labels president Frank Gibeau was quite frank about the fact that digital was winning out when asked by Games Industry International. He went so far as to say that EA would be going 100% digital:
"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,"
"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 - much like your question about streaming and cloud - we're going to be a 100% digital company, period. It's going to be there some day. It's inevitable."
Don't fret about not seeing EA's games at retail any longer. EA won't be abandoning their retail partners just yet. However, Gibeau believes that analysts are getting the wrong idea about EA and the videogame industry from the figures that NPD releases, which only account for retail. Going off of just NPD's numbers, it would appear that the industry is on the decline, but Gibeau states that EA doesn't put much stake into NPD's numbers, because of digital sales:
"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."
In short, Gibeau's just telling us what's already plainly obvious about the videogame industry. Things are going digital—and quickly. I'm just not sure that shirking retail entirely is a good idea, but maybe I'm wrong. After all, we are part of the last generation that's relied on a physical medium for entertainment. Maybe there is no place for retail for Generation Always-On.