Electronic Arts is one of the few major video game companies involved in digital distribution of games. Its distribution service Origin, though not so popular, has certainly helped the company get its foot in the door against Valve’s Steam. However, it seems EA might go all out to establish its presence in this new distribution platform. GamesIndustry International recently reported Frank Gibeau, President of EA Labels, as saying that EA would be a 100 percent digital company in the future. According to the report, The company recently had its first year of digital revenues over $1 billion, and EA is expecting that number to grow closer to $2 billion.
“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 of what 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,” the report quoted Gibeau as saying.
He added, “But if customers want to buy a game at retail, they can do that too. We'll continue to deliver games in whatever media formats make sense and as one ebbs and one starts to flow, we'll go in that direction. For us, the fastest growing segment of our business is clearly digital and 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.”
EA may go 100% digital…
The fact that PC gaming is dominated by games sold via digital distribution channels such as Valve's Steam or Paradox’s GamersGate, or EA’s own Origin, opens up new avenues for EA. “For us, we're focused on the fact that the gaming market overall is broad. You have more people playing games now than ever before in the history of the industry. There are more markets available to us – Asia, Brazil, Russia – a bunch of emerging markets that are legitimate and growing fast. We have more devices that we can publish across now. We used to publish across three platforms; now we're publishing across 14 or 15,” Gibeau said.
Th report stated that EA would be prepared for the advent of IP televisions and streaming. “That'll be a way we'll generate content and deliver it to customers in a high quality way. The next generation of hardware is going to come out. It's difficult to speculate what generation next would be after that, but there are opportunities in cloud and streaming that are very interesting to us and we have relationships with Gaikai and other companies where we've investigated a lot of that stuff. We clearly see our IP and our capabilities on the digital services front translating over very easily there.”
EA debuted its Origin service as the only way to play the much-anticipated Battlefield 3 late last year, and though it’s not quite there yet, EA hopes to catch up to Valve’s Steam service.