EA COO Peter Moore has warned publishers that they must prepare for the day when the industry fully transitions to digital distribution, saying: "unless they change their ways and invest in the future, those companies will die off."
Speaking to Industry Gamers, Moore - who was promoted to COO in August - said: "Transitions are hard because revenue slows down and costs speed up. You're getting ready to develop for new platforms, whether they be hardware platforms or software, and it's getting to be even more complex now.
"The companies that have prepared themselves and have diversified their offerings to chase the consumer wherever they want to play games are the companies that will succeed. Companies that continue to rely on the old model as the model changes before our eyes, unless they change and invest in the future those companies eventually will die off. No two ways about it."
Moore believes EA is well-positioned after several smart acquisitions to ensure it is able to release its games on a wide variety of platforms. It bought social studio Playfish in 2009 for $300 million, and recently strengthened its social business with the acquisition of Klicknation, which develops social titles aimed at the core gamer, and subsequently formed a new business unit, BioWare Social.
EA bought Chillingo, one of the biggest publishers of mobile games, in 2010, and in July announced its intent to acquire PopCap in a deal that could be worth $1.3 billion if earnings targets are met in the next two years. There's also the Origin platform, with which EA is gaining a foothold in the PC download market.
"I enjoy the freedom here of being able to provide gamers, no matter what they're playing on, [with] great content," Moore said, comparing his current employer to his time in the hardware business with Sega and Microsoft. "That's the energy we have here at EA - particularly right now with all the investments we've made, which I think differentiates us from just about any other company in the industry right now.
"Eventually, physical media will diminish as the core part of how gamers get their content. We're ready for that, but we're also still ready to be the number one packaged goods publisher in the world, which we are.
"We might be the company that sells the last disc. But by then we'll also be doing several billions of dollars in digital and direct-to-consumer revenues."
Source: Industry Gamers
Comments
4Sorry Pete mate, but when you transition solely to digital only I'm transitioning away from any products you're trying to sell me.
I'm not going to pay £40-50 for something sat on a HDD with ridiculously restrictive licenses all controlled by the publisher.
No issue with cheap downloadable XBLA games (I have 173 of them), but there's no way hell-on-earth I'd own the 226 Xbox360 retail games I do if they were DD only - I'm simply not prepared to spend that sort of money unless I have a physical product..
You'd also need a hard drive that's a fair bit bigger than current offerings.
I doubt EA is going to abandon retail anytime soon (if ever), but they certainly are being smart about capturing important ground in the digital marketplace, unlike many others.
I doubt EA is going to abandon retail anytime soon (if ever), but they certainly are being smart about capturing important ground in the digital marketplace, unlike many others.