Electronic Arts COO John Schappert says that some form of “online component” will feature in every game the publisher releases in its 2011 fiscal year.
EA is leaning heavily on digital content these days, in both core releases and casual games released through sites like Pogo and Playfish, and it’s strategy the company plans to stick with. “In fiscal 2011, every one of EA’s releases will have an online component, both downloadable content and online play, and don’t forget that we have a full roster of titles coming from our online subscription site, www.pogo.com, from our mobile and iPhone group, and of course, our social gaming team, Playfish,” Schappert said during a conference call to analysts following the release of EA’s third quarter fiscal results. “That’s a lot of exciting content and revenue opportunities coming through all three of our businesses, package goods, digital and distribution.”
EA’s packaged goods business is “performing,” added CEO John Riccitiello, but the digital market is where the company sees serious growth potential. “We have a profitable scaled digital business that recently hit the $0.5 billion threshold. Our digital business is growing at 30 percent and is projected to break through three quarters of $1 billion in fiscal 2011,” he said. “We have programs in place that should take this to well beyond $1 billion in the coming two fiscal years.”
As Schappert suggested, “online component” can mean many different things: Multiplayer combat in Medal of Honor, a social network for The Sims and regular DLC updates for Dragon Age are all valid examples. Across the board, it’s also a way for the company to continue its efforts against pre-owned sales by including free DLC with new purchases, as it did with Dragon Age: Origins and Mass Effect 2. On the other hand, making an internet connection mandatory is bound to alienate a significant portion of gamers, a potentially serious downside.
EA lost $82 million in the third quarter of the 2010 fiscal year, a substantial improvement over the $641 million it lost over the same period the previous year but still hardly what anyone would call a great success story. Something clearly needs to be done to turn things around, but is this really it?
Source: Seeking Alpha