EA to focus on PC games and digital distribution
Video game stalwart EA is looking at PC games and digital distribution for future revenues. Can a console-oriented developer like EA make the switch?
If there is any market more confusing than enterprise software, it's the world of video games. Enterprise vendors are constantly trying to reinvent themselves to support new technologies to maintain their market positions and large game companies like EA are trying to evolve with the way consumers play games. And being the 800-pound gorilla in the space means that the company has a better chance than most in weathering a storm.
Accordingly, it appears that EA has begun to sound the death knell of game consoles, highlighting PC games and digital distribution as recent high-growth areas. Of course, this doesn't negate the fact the majority of revenue comes from console games, but instead attempts to cast EA as a market visionary.
Speaking during the EA's quarterly and annual earnings call, CFO Eric Brown said that the company's digital game distribution revenue has almost doubled year-over-year to $80 million. Digital direct revenue as a whole also grew to $400 million during the year ended March 31.
"This is a big year for us...In terms of distribution, the way we look at a lot what's happening in the future is, we've got probably a billion PCs out there in the world," he said, according to ShackNews. "Very rapidly the PC is becoming the largest gaming platform in the world, just not in a packaged-good product."
"As you look at what that means in terms of distribution of product, we think that's incredibly exciting because it's going to open the market to new demographics, new countries and new types of game play."
A few months back EA partnered with Valve for the distribution and management of select titles--a good strategy, but one that makes me wonder if EA has missed the boat entirely on being the giant of digital distribution. Considering it owns such valuable content, one would expect the company to be more aggressive in the space.
Company CEO John Riccitiello also said that EA plans to introduce two additional "online subscription services" later in the current fiscal year but didn't provide an explanation as to what games or services would be involved.
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