Marketing Research Firm Challenges EA's "All Digital Future"

Marketing Research Firm Challenges EA's "All Digital Future"

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According to NPD President David McQuillan, EA is definitely making use of retail data.

EA Labels President Frank Gibeau recently told Games Industry International that a 100% digital future for gaming was a certainty and that EA would be taking steps to meet that future. As evidence of retail's decline, he explained that EA barely references NPD sales figures anymore because the company is more interested in using digital services to connect directly to gamers. This apparently came as a huge surprise to NPD President David McQuillan, because NPD has been in daily communication with all its partners, including EA, providing them with the latest retail data.

"While we will not comment on the specifics on our long-standing relationship with EA," McQuillan said, "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 ... 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's argument that retail is still important, despite the growth of digital services, actually holds quite a bit of weight. For example, while it is true that EA's digital revenues nearly doubled from $211 million to $419 million in the past year, retail revenues still tower over them. In Q4 2012, EA reported that it earned a whopping $949 million, as in nearly a billion dollars, through retail sales alone, which was also an increase from 2011. That's quite a bit of money from a market that Gibeau describes as "totally irrelevant".

While McQuillan's comments could be a knee-jerk reaction to justify NPD's relevance in a digital age, those numbers do suggest that retail still has quite a bit of life left in it. In fact, it's entirely possible that Gibeau's comments are part of a larger strategy to promote and market digital initiatives which EA coincidentally started doing shortly after the Origin platform released last year. While an all-digital future is a very real possibility, ignoring retail data (not to mention offending your partners in the process) would be a very poor thing for EA to do this early in the game. Or as NPD's David Riley put it: "you do a disservice to our industry when you dismiss the value of retail sales research."

Source: Joystiq

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Anyone who takes EA at their word is a fool.
A FOOLISH fool!

I wonder what retail expenditure is like. Shipping, boxing, etc. etc.

I'd imagine the picture would be a little different if we knew that.

Wow! So EA not only screws its customers, they also take a piss at their business partners? Way to go!

... Nope I'm done. Every time EA opens their mouth, I cry 'STOP!'. Nothing happens.

Keep shooting your feet EA, I'm going off for a sandwich.

EA: Maybe if you shut up for an entire year, fire your PR department, and come back with a new game plan and some fresh ideas, someones pet dog might just take you seriously again.

If I were to personify EA as one person...I'd actually imagine them as an incredibly crazy stupid person

It's rather dangerous to assume everything EA says is wrong. Most of it is, but even the metaphoric broken clock is right twice a day.

So. If Valve had said this though, we'd all be praising them.

"OH GOD YES, ALL DIGITAL IS THE FUTURE."

Frostbite3789:
So. If Valve had said this though, we'd all be praising them.

"OH GOD YES, ALL DIGITAL IS THE FUTURE."

We can't get Valve's numbers. Valve made a lot more money from Steam than EA has from Origin.

€A will never change. who ever believes them, is really stupid.

Frostbite3789:
So. If Valve had said this though, we'd all be praising them.

"OH GOD YES, ALL DIGITAL IS THE FUTURE."

Well I mean I might be wrong, but doesn't valve sell anything it puts out pretty much exclusively digitally. All I can think that wasn't/won't be put out digitally (and granted its been a while since I walked around a video game store), is portal 2 and the orange box (which was a pretty long time ago), oh and left for dead (I'm pretty sure that came to the 360 right?), and even then if we look at there most recent game (portal 2), they included a free voucher for a digital copy on pc. I think they are actually making a conscious effort to remove as much physical distribution as possible.

I personally think that with few exceptions, all digital will likely be the future for pc games (especially if we get some really fast stable internet connections, like that new one they just figured out), but I don't see it happening for consoles anytime soon, least not until they get their shit sorted out. It might just be me, but I hate buying digital on my ps3 cause shit is so damn slow. To download a game off steam (smaller one maybe a 1-5gb) it takes me a couple hours tops, while on psn, some downloads that are less than half a gig take almost an hour.

That and lets be frank here, consoles are slowly turning into low end computers, and the push towards all digital is basically just going to accelerate this transition as the consoles will need to be bigger and more powerful, and also have some sort of upgrade potential. I would bet money now, that within 20 years (and probably within 10) of games going all digital the console market will die.

I still hope Origin crashes and burns.

Someone from EA being an idiot? What a surprise
/sarcasm

As someone who stands firmly against digital distribution I really don't care if EA does go full digital, I don't buy their crap now, I wouldn't buy it in the future regardless. EA is nothing short of a complete fucking joke in the eyes of their previous fanbase and in the eyes of anyone who has a sense of dignity and honor. Fuck those guys.

ScruffyMcBalls:
As someone who stands firmly against digital distribution I really don't care if EA does go full digital, I don't buy their crap now, I wouldn't buy it in the future regardless. EA is nothing short of a complete fucking joke in the eyes of their previous fanbase and in the eyes of anyone who has a sense of dignity and honor. Fuck those guys.

dont worry. you are not alone. there are many who will not buy any games from them or from other companies who have the €A logo on it.

Metalrocks:

ScruffyMcBalls:
As someone who stands firmly against digital distribution I really don't care if EA does go full digital, I don't buy their crap now, I wouldn't buy it in the future regardless. EA is nothing short of a complete fucking joke in the eyes of their previous fanbase and in the eyes of anyone who has a sense of dignity and honor. Fuck those guys.

dont worry. you are not alone. there are many who will not buy any games from them or from other companies who have the €A logo on it.

Glad to hear it, those fuckers don't deserve the hard earned cash of gamers anymore.

Uh...so, I read the statement by the EA guy and all he said was that it's going to be 100% digital at some point.

AT SOME POINT.

Quite honestly, this "rebuttal" sounds like a kneejerk reaction to me. I didn't see the EA guy dismiss retail as it stands right now, only that digital is the growing market and that's where things are headed.

But you gotta love the usual, equally kneejerk, reactions of the anti-EA brigade. Because you know, hating everything EA does and says is cool.

WHile it could be argued that dismissing retail completely would be stupid, I highly doubt they do that. As I understand it, they look at digital only to determine WHERE to go, not where they are.

DVS BSTrD:
Anyone who takes EA at their word is a fool.
A FOOLISH fool!

^ this

"While an all-digital future is a very real possibility, ignoring retail data (not to mention offending your partners in the process) would be a very poor thing for EA to do"

so ea follows their renegade options through to the bitter end.
just proves bioware right, you can insult the ever loving crap out of the world and still make headway

i'm used to the idea of ea doing things that directly hurt ea
with a motto of 'Challenge Everything'
how they succeed at all is beyond me, it must be drug money or something
i've got it, http://www.youtube.com/watch?v=DcQXsbrAdIw&feature=player_detailpage#t=86s

it's arms dealing.

The Lugz:

DVS BSTrD:
Anyone who takes EA at their word is a fool.
A FOOLISH fool!

^ this

"While an all-digital future is a very real possibility, ignoring retail data (not to mention offending your partners in the process) would be a very poor thing for EA to do"

so ea follows their renegade options through to the bitter end.
just proves bioware right, you can insult the ever loving crap out of the world and still make headway

i'm used to the idea of ea doing things that directly hurt ea
with a motto of 'Challenge Everything'
how they succeed at all is beyond me, it must be drug money or something
i've got it, http://www.youtube.com/watch?v=DcQXsbrAdIw&feature=player_detailpage#t=86s

it's arms dealing.

i hope its not arms dealing. EA cant afford to shoot itself in the foot anymore

Remember all that good will EA got in 2007-2009 sort of period where they started promoting more new IPs (Mirror's Edge being a major name) and generally letting Activision take the head of the "Hated Gaming Supercompany"?

I wonder what happened to that.

NKRevan:
Uh...so, I read the statement by the EA guy and all he said was that it's going to be 100% digital at some point.

AT SOME POINT.

Quite honestly, this "rebuttal" sounds like a kneejerk reaction to me. I didn't see the EA guy dismiss retail as it stands right now, only that digital is the growing market and that's where things are headed.

But you gotta love the usual, equally kneejerk, reactions of the anti-EA brigade. Because you know, hating everything EA does and says is cool.

WHile it could be argued that dismissing retail completely would be stupid, I highly doubt they do that. As I understand it, they look at digital only to determine WHERE to go, not where they are.

The at some point is the key right here. It is cheaper cutting out middlemen and currently the retail industry is the middlemen. A cheaper product has an edge. When the internet infrastructure allows us the level service a retail store provides they will cease to be useful and disappear.

It would be amusing to see what would happen if Walmart saw this and said "looking to cut us out and go all digital? Okay, let us help you. We're not going to carry your product this year. Let us know how that works out for you."

Draech:

The at some point is the key right here. It is cheaper cutting out middlemen and currently the retail industry is the middlemen. A cheaper product has an edge. When the internet infrastructure allows us the level service a retail store provides they will cease to be useful and disappear.

I agree with you, except that EA is selling their shit on Origin for full retail prices...
For example, they still have the nerve to charge the full price for ME3 and it's collector-editions as if it was just released, while it's already down by twenty bucks in stores......

The cheaper product has the edge, in fact EA is actually working against the "all-digital future" which they are trying to promote. Can anyone explain to me how that's supposed to make sense?
Besides, this ain't a kneejerk reaction to the claim that the future will be all digital, everyone agrees that this is quite possible, but trying to prove this by blatantly lying to your customers and pissing on your partners, is just a new form of stupidity... we're all used to being lied to by big companies, but that they're being so goddamn stupid about is new...

As of late, EA seems to only be good at two things, contradicting themselves, and talking crap.

Sesambrot:

Draech:

The at some point is the key right here. It is cheaper cutting out middlemen and currently the retail industry is the middlemen. A cheaper product has an edge. When the internet infrastructure allows us the level service a retail store provides they will cease to be useful and disappear.

I agree with you, except that EA is selling their shit on Origin for full retail prices...
For example, they still have the nerve to charge the full price for ME3 and it's collector-editions as if it was just released, while it's already down by twenty bucks in stores......

The cheaper product has the edge, in fact EA is actually working against the "all-digital future" which they are trying to promote. Can anyone explain to me how that's supposed to make sense?
Besides, this ain't a kneejerk reaction to the claim that the future will be all digital, everyone agrees that this is quite possible, but trying to prove this by blatantly lying to your customers and pissing on your partners, is just a new form of stupidity... we're all used to being lied to by big companies, but that they're being so goddamn stupid about is new...

As of late, EA seems to only be good at two things, contradicting themselves, and talking crap.

there is a reason for that.

The retail market still sits on a major part of their customers. The retailers more or less said "if you dont sell the game at the same price on digital as on physical for X amount of time we wont sell your game". So rather than competing they made an untimatum because they still owned that large market share. EA or Valve for that matter cannot afford losing the retail sector.

Id like nothing more than for EA to lose more than half of their sales due to it's own idiocy

Draech:

there is a reason for that.

The retail market still sits on a major part of their customers. The retailers more or less said "if you dont sell the game at the same price on digital as on physical for X amount of time we wont sell your game". So rather than competing they made an untimatum because they still owned that large market share. EA or Valve for that matter cannot afford losing the retail sector.

Maybe I'm confusing something, but usually the stuff on steam costs just as much as a retail-copy, sometimes even less, and that isn't even accounting for their "midweek madness"...

EA made an announcement?

EVERYBODY QUICK LETS IMMEDIATELY CLAIM THAT EA IS WRONG!

sure EA doesnt have the best track record with the rest of the gaming culture.
But that doesnt mean they cant be even slightly right sometimes

but for my 2 cents. EA is indeed partially wrong
the much sort after FPS market is 90% douche bro-dudes and annoying little kids who wont buy it digitally and for that reason alone physical media with prevail for quite a few years to come.

Sesambrot:

Draech:

there is a reason for that.

The retail market still sits on a major part of their customers. The retailers more or less said "if you dont sell the game at the same price on digital as on physical for X amount of time we wont sell your game". So rather than competing they made an untimatum because they still owned that large market share. EA or Valve for that matter cannot afford losing the retail sector.

Maybe I'm confusing something, but usually the stuff on steam costs just as much as a retail-copy, sometimes even less, and that isn't even accounting for their "midweek madness"...

yeah that is the point. the retailers forces the prices of the digital version up in order to be competitive. It doesn't take a math doctorate to figure out that a game that doesn't need physical production will cost less to produce and distribute.

Draech:

Sesambrot:

Draech:

there is a reason for that.

The retail market still sits on a major part of their customers. The retailers more or less said "if you dont sell the game at the same price on digital as on physical for X amount of time we wont sell your game". So rather than competing they made an untimatum because they still owned that large market share. EA or Valve for that matter cannot afford losing the retail sector.

Maybe I'm confusing something, but usually the stuff on steam costs just as much as a retail-copy, sometimes even less, and that isn't even accounting for their "midweek madness"...

yeah that is the point. the retailers forces the prices of the digital version up in order to be competitive. It doesn't take a math doctorate to figure out that a game that doesn't need physical production will cost less to produce and distribute.

Uhm, I was actually pointing out that steam-prices are NOT more expensive than retail.
I fail to see the "retailer-conspiracy" with that... Sure, you could argue that they might "prevernt" them from lowering the price below retail, but that doesn't really explain the extremely high prices on Origin when compared to retailprices of the same game.

It only leaves me with two possible conclusions:
EA is just a big, faceless, moneyhungry company, or they are even more stupid than I had thought agreeing to a deal where they could be forced to keep the "launch-price" of a game while the retailvalue drops by about 50%.

Actually, make that three possible conclusions, it seems likely that both scenarios are true.

Sesambrot:

Draech:

Sesambrot:

Maybe I'm confusing something, but usually the stuff on steam costs just as much as a retail-copy, sometimes even less, and that isn't even accounting for their "midweek madness"...

yeah that is the point. the retailers forces the prices of the digital version up in order to be competitive. It doesn't take a math doctorate to figure out that a game that doesn't need physical production will cost less to produce and distribute.

Uhm, I was actually pointing out that steam-prices are NOT more expensive than retail.
I fail to see the "retailer-conspiracy" with that... Sure, you could argue that they might "prevernt" them from lowering the price below retail, but that doesn't really explain the extremely high prices on Origin when compared to retailprices of the same game.

It only leaves me with two possible conclusions:
EA is just a big, faceless, moneyhungry company, or they are even more stupid than I had thought agreeing to a deal where they could be forced to keep the "launch-price" of a game while the retailvalue drops by about 50%.

Actually, make that three possible conclusions, it seems likely that both scenarios are true.

Well they could have gone the blizzard route and just have their digital copies purposely more expensive. I am not quite sure why Blizz does this.

On a not of clairification.

I didn't say the retailers wanted a higher price on digital. I said the same price in order to stay competitive. The retailer will often have a higher price thou since they can adjust the price on an individual store depending on demand in set area.

Sesambrot:

Draech:

there is a reason for that.

The retail market still sits on a major part of their customers. The retailers more or less said "if you dont sell the game at the same price on digital as on physical for X amount of time we wont sell your game". So rather than competing they made an untimatum because they still owned that large market share. EA or Valve for that matter cannot afford losing the retail sector.

Maybe I'm confusing something, but usually the stuff on steam costs just as much as a retail-copy, sometimes even less, and that isn't even accounting for their "midweek madness"...

Steam is still locked into the retail price as set by the publisher/owner. Steam works well with publishers and has a ton of data about how big sales move more games you move more games you get people cluing their friends into those games and you see a bump in sales long after the end of the big sale just via word of mouth generated among gamers. they been doing this stuff a long time and have mined tons of data about how sales work and how well they work.

But they still have to follow the msrp of the publisher they cant take dragon age 4 on steam sell it for 30 bucks release day when its 60 on origin and in retail stores, even smaller games they have to go with what the owner wants, but a few cases where vales actively urging a game to undersell itself in the indy side has made some games more massive hits than they would have been because they were such good value they sold 10x more units than they expected, and made more profit as a result.

Every publisher is dreaming of full digital how could you blame them? it will crush the middleman, outside of the pirates that manage to hack this stuff they probably will make a mint, but your retailiers the smaller chunk they get and its moved into EA's hands or activisions or whoevers that is 100% pure profit, no packaging no dvds or blu rays to burn, the biggest costs are tech support.

in EAs case that would be a major cost because their customer support is quite possibly the only one where the customer is always wrong until you can come up for detailed documentation proving you in fact own the game in question and even if you get assurances to one thing or another out of them there is 0 guarantee anything will come of it.

Really hope origin dies a flaming death however there is no way i want EA data mining my personal information, my gaming habits via their service, i know value/steam does the same stuff but i trust value a million times more than i trust EA to use any of that information for good.

long live steam, and direct2drive

OF course EA wants a 100% digital distribution model; it's easier to get away with DRM and other bullshit because you had to be online to get the game in the first place, and they could get away with charging retail distribution price.

It's the model that lets them bring us frogs up to a slow boil without jumping out of the pot.

nikki191:

The Lugz:

i've got it, http://www.youtube.com/watch?v=DcQXsbrAdIw&feature=player_detailpage#t=86s

it's arms dealing.

i hope its not arms dealing. EA cant afford to shoot itself in the foot anymore

i doubt they have any feet left from their previous mistakes, but a wheelchair isn't slowing them down any if anything they took it to a skate park!

In Q4 2012, EA reported that it earned a whopping $949 million, as in nearly a billion dollars, through retail sales alone, which was also an increase from 2011.

Wow, so EA has released figures for time periods that have yet to happen, count me impressed.
Can I borrow your time machine this weekend? I want to go play Half-Life 3 for a bit. Don't worry, I'll return it yesterday.

 

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