EA CEO: we're switching from discs to digital

By on May 5, 2011, 12:57 PM

Electronic Arts is aware that the future of gaming lies in digital content and wants to eventually move away from physical discs. In fact, EA CEO John Riccitiello is planning to completely convert the gaming giant.

"Over the coming years, we will transform EA from a packaged goods company, to a fully integrated Digital entertainment company," Riccitiello said in an earnings call yesterday, according to a transcript posted on investment news site Seeking Alpha. "We're transforming EA to a games as a service model by focusing on three new strategies." He then outlined what those are:

#1, intellectual property. We believe we are driving the strongest portfolio of IP in the industry with EA Sports, FIFA, Hasbro, Madden, Pogo, Battlefield, Need for Speed, The Sims, Tetris, Dragon Age, Mass Effect and more. We fully intend to make these properties into year-round businesses that lead their sectors across a range of platforms.
#2, platform. Increasingly, we see ourselves as a software platform every bit as much as we see ourselves as a content maker for other companies platforms. We had a great start with 112 million consumers in our nucleus registration system, up from 61 million a year ago. And while we will continue to be a great partner to our best retail customers and our first-party partners, you will see the beginnings of a consumer game platform emerge at EA that complements and extends the console ecosystem and addresses the wider opportunity on other devices.
#3, talent. To deliver on the 2 strategies above, IP and platform, we will expand on a model that is already working at EA, and only at EA. We are the only company with world-class teams working across platforms on social, mobile, and console development. We are integrating these teams and augmenting them with product monetization and marketing. It's a big change. As an investor, you can see this as a way to better manage our IP and drive up the ARPU for our core properties. As a developer, you can see this as the reason EA will be the most interesting and satisfying place to work in the game industry.

The shift, when it occurs, will be a massive one. EA is one of the largest video game publishers in the world. Its revenue relies heavily upon packaged goods selling at various retail outlets.

In recent years, EA has already increased its digital distribution efforts, offering everything from downloadable extras to complete games. We would argue that EA began to acknowledge the importance of distributing games digitally back in December 2008, when the company officially joined Steam. EA's digital revenue grew by 46 percent year over year to more than $800 million in its last fiscal year. For this fiscal year, the company is expecting that figure to exceed $1 billion.

Just two months ago, the company dropped paper game manuals. The decision will extend to all EA titles worldwide and games will ship with on-disc manuals that are easily accessible from the main menu and pause screen. Gamers can also download digital pamphlets in multiple languages through a dedicated section on EA's support site, though only for certain titles.

The company is still distributing discs, but the transformation won't happen overnight. Joining Steam and killing off game manuals are just stepping stones to help gamers adjust to getting less or no physical content when buying a game.




User Comments: 38

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yRaz yRaz said:

I have a feeling that this is going to come with a more powerful, less effective, and EXTREMELY intrusive DRM.

CamaroMullet said:

You maybe right yRaz. I also wonder if the games will be cheaper??! Probably not....

hitech0101 said:

Also hope to see some new games instead of boring sequels.

BrianUMR said:

For EA this is a win win. Should be cheaper and no more gamers ripping off EA with second hand sales.

veLa veLa said:

BrianUMR said:

For EA this is a win win. Should be cheaper and no more gamers ripping off EA with second hand sales.

How is selling a game you paid for a rip off? Terrible consumer attitude.

Guest said:

BrianUMR said:

For EA this is a win win. Should be cheaper and no more gamers ripping off EA with second hand sales.

veLa: How is selling a game you paid for a rip off? Terrible consumer attitude.

Okay what veLa just said now makes her the dumbest person on the planet. Its called riping the game onto the computer and putting them on multiple dics for them to give away to friends or to sell.

Guest said:

Son of a.... Bet nobody from EA has had to live in South Africa with our "mainstream" internet connections. 90% of people in SA can only afford 384 lines (max download speed of 30-40kbs). Have you ever tried downloading a 8-12GB file at that speed?! Gimme my discs!

gwailo247, TechSpot Chancellor, said:

Guest said:

BrianUMR said:

For EA this is a win win. Should be cheaper and no more gamers ripping off EA with second hand sales.

veLa: How is selling a game you paid for a rip off? Terrible consumer attitude.

Okay what veLa just said now makes her the dumbest person on the planet. Its called riping the game onto the computer and putting them on multiple dics for them to give away to friends or to sell.

Really? Oh man, and here I was buying all these games when I could have just copied my friend's version. Then I could play online for free.

BrianUMR said:

veLa said:

BrianUMR said:

For EA this is a win win. Should be cheaper and no more gamers ripping off EA with second hand sales.

How is selling a game you paid for a rip off? Terrible consumer attitude.

It is sarcasm. It is suppose to be from the mindset of EA. That's why I said for EA in the first sentence.

I have very mixed feelings about the all digital content for games. On the one hand it makes it much easier to buy the game. Don't have to pre-order(don't have to already), don't have to wait in line, don't have to drive to the store, etc. However if you buy a game and it sucks you are flat out stuck with it. If you bought a game at brick and mortar store and it was bad enough you could get your money back.

Guest said:

I can live with the digital format, as long as the prices drop. I can buy a boxed version of a game for 30 euro, while the digital version on steam costs 50-60 euro. Doesn't make any sense. You pay double money for nothing extra.

And I still want physical CE's. I'm a collector. I've still got every box of every game I've bought the last 20 years. And I treasure my boxes like I treasure my bookcase. It's the same for me. Most of my books I also only read once, but they stand beautifully on the shelves.

My "library" of 150 games in steam is not something I'm proud of, or look at once in a while. It feels like lost money after I finished one of those games (luckely most of them bought on x-mas/weekend deals), wishing I'd put my money in the boxed version.

CamaroMullet said:

Not to mention ( at least in the US of A ) we are getting some brand new data caps forced on to us. I'd hate to get towards the end of the month and having to decide between watching porn all night or downloading the latest awesome game.

Darkshadoe Darkshadoe said:

CamaroMullet said:

Not to mention ( at least in the US of A ) we are getting some brand new data caps forced on to us. I'd hate to get towards the end of the month and having to decide between watching porn all night or downloading the latest awesome game.

Also quite a bit of the country is still on dial-up. Enjoy that game a month or two from now when its finished downloading.

ikesmasher said:

this is a stupid idea.

Can i ask who justifies 60 dollars for a 50 cent disc and a game on it? 20 bucks should be plenty for them. but noooo...

Zecias said:

Guest said:

BrianUMR said:

For EA this is a win win. Should be cheaper and no more gamers ripping off EA with second hand sales.

veLa: How is selling a game you paid for a rip off? Terrible consumer attitude.

Okay what veLa just said now makes her the dumbest person on the planet. Its called riping the game onto the computer and putting them on multiple dics for them to give away to friends or to sell.

why would you buy an illegal disc instead of torrenting it? and even if people did why wouldn't they just move on to torrents? in the end, people will still torrent games and EA wont save any money from piracy by distributing only digital copies.

9Nails, TechSpot Paladin, said:

Oh please talk to Valve and use Steam's store for this. Last thing I need is every distributor's DRM infected client clogging up my disk space each with their own unique set of restrictions. All of this with a subtle belief that I'm some sort of criminal.

colinf said:

have only bought 1 boxed game in the past 3 years (DA2 cos steam didnt do the collectors), Steam and GOG get my hard earned now

probably wont buy direct from EA tho, not due to EA hate or anything, just not keen on there download manager thingy

superty12 superty12 said:

The new DRM will be something like this: "Select the system specific DRM EXE now. Wait until we check your hardware. Type your 45 key product code now. You got it at purchase. Now type your EA login details. Now wait while the DRM analyzizes each file closely. Congrats, you passed the DRM checks", or if you torrented the game, "Your game has not passed the DRM checks. Wait until we destroy the copy of the game with junk that cannot be erased exept by reformatting." Effective, but exhaustive.

HaMsTeYr HaMsTeYr said:

The point BrianUMR Was trying to bring through, and I think is true regarding second hand sales is that even in the event that piracy DOES NOT occur, a single copy of the game can be played, then uninstalled or sold off to someone else. What this means is of course for people who don't care for tihngs like the multiplayer components, they get to play the game and get portions of their money back.

How this affects EA is that obviously instead of having lets say 5 people buy their game, 1 person buys it and it moves around.

Easy peasy terms, 1 sale vs 5 sales. >.>

captaincranky captaincranky, TechSpot Addict, said:

Or, perhaps you all could stop whining and simply stop buying their product.

This nonsense sounds like some bizarre love-hate relationship. It's like people always, (deep inside), hate the guy that sells them their drug fix, and brown nose him to his face.

Anything to which you're addicted .has a great deal of power over you. And anything you're not, just goes away.

BrianUMR said:

hamsteyr said:

The point BrianUMR Was trying to bring through, and I think is true regarding second hand sales is that even in the event that piracy DOES NOT occur, a single copy of the game can be played, then uninstalled or sold off to someone else. What this means is of course for people who don't care for tihngs like the multiplayer components, they get to play the game and get portions of their money back.

How this affects EA is that obviously instead of having lets say 5 people buy their game, 1 person buys it and it moves around.

Easy peasy terms, 1 sale vs 5 sales. >.>

I think some people are unaware of how to read.

"Should be cheaper and no more gamers ripping off EA with second hand sales.

Just becuase the word ripping is in the sentence does not mean the sentence is about piracy.

Game companies like EA feel like they are getting ripped off by Gamestop becuase Gamestop buys and sells used games. They feel if there where no used games everyone would just buy new games(This is not how I feel). The second hand market is the market for used stuff.

spydercanopus spydercanopus said:

yRaz said:

I have a feeling that this is going to come with a more powerful, less effective, and EXTREMELY intrusive DRM.

Yea... type your username and password is soooo intrusive.

Gallifrey2 said:

BrianUMR said:

Game companies like EA feel like they are getting ripped off by Gamestop becuase Gamestop buys and sells used games. They feel if there where no used games everyone would just buy new games(This is not how I feel). The second hand market is the market for used stuff.

I think EA and other companies are a bit misguided in the belief that people would just buy a new version of the game if there was no used game market. I think they are in for a rude awakening when their sales of newly released games drops to all time lows. How many of those new sales were done only because kids or parents traded in other games for a discount on a newly released one.....far far more then they will admit.

I for one would have very few games in my library as for me rarely do I find a game that I feel is worth paying more then 30 bucks for.

Guest said:

I welcome change in gaming but to have a pysical copy for those that may not have there system online or what not is a lil gay what if someone has a console and don't sue internet they can't get new games in the new system. i know that ppl w/o internet isn't very common anymore but still i hope EA considered that and doesn't do this shift TOO soon and if they are smart they have limited disc production for said situation.

Guest said:

agreed i'm personally one that buys not only new but used games. how would that work with digital only downloads unless they can transfer of the title w/o making 100% sure a game wasn't going to bomb.

yRaz yRaz said:

spydercanopus said:

yRaz said:

I have a feeling that this is going to come with a more powerful, less effective, and EXTREMELY intrusive DRM.

Yea... type your username and password is soooo intrusive.

Yup, because we sooooo need to be connected to the internet to play single player end of games and have hard to remove software installed to your computer. I just want to play, I don't want to have to log in 500 different places to play a stupid game. Treating the paying customers like criminals is BS, that's part of the reason I'm against DRM. The pirates will always find a way around it and the good natured, paying customers are going to get boned at every corner. TBH, unless there is some serious online play I buy the hard copy and torrent the game, crack and all.

If you want to be bent over and have your butt pounded, be my guest. Otherwise, sdfu.

Guest said:

What the hell is wrong with you lot... cant any one you see the big picture. After spending £35 for a game, most of which theses days only last a few hours(portal 2), you cant sell on. Would you pay £15-20 for a blue ray movie that your stuck with.. This is just a stepping stone to EA charging what they like.

If publishers continue to go the digital route, they cant possibly still think of getting away with charging full retail as they currently are. Its like they want their cake and eat it, so on that line of reasoning if they want to go digital they will have lower the price of the game to something akin to rental. I don't mind begrudgingly paying £10 for a digital copy that I can keep/delete as I see fit, but £35.... - they can fcuc right off.

Fyi, what happened to the fact that without customers EA and other sycophant publishers would not exist, we should be telling them what we the gamers want not the other way around. And to all those stupid enough to think they way the games industry is going, I say baaaaaa, wake up and smell the coffee little sheep.

Guest said:

I am collector. I want physical boxes and discs. If you decide to go all-digital that's your choice, EA... but i won't be buying any of your games from that moment on.

i like to spend my money on physical things, sorry but that's how i like my stuff.

i have never spent a single dime on a digital-only good, and i don't plan to do it now or in the foreseeable future. i prefer to be able to touch the things i own.

Guest said:

I have both disks and digital (only because of the digital only sale that IMO was unfair to Mac users), but lets say I can't pay my internet bill for whatever reason.. lets say my computer bombs out during that time. Then I get no access to a game I paid for? Am I going to be reimbursed for every day I can not access my game?

What about Mac users? EADM is not made for Mac, How will these users access their games?

Will digital be cheaper then box purchases since it will not longer require the plastics, papers, and shipping costs?

Honestly this is a bad plan, and EA will lose many customers who have little to know internet access who enjoy these games.

mailpup mailpup said:

...lets say my computer bombs out during that time.
I'm not sure I understand this point. If your computer bombs out, you can't play your game anyway, correct?

Guest said:

So they're going to skyrocket their piracy rate and lose a bunch of customers because not everyone has a credit card. Good job EA, you just lost many loyal disk-loving customers! ******...

Guest said:

well i wont be switching over if i cant have a hard copy of game i dont want it plus digital games have securom which totally messed up my last pc.

Guest said:

What about Mac users? Is EA games going to make their products still available for those users? What about people without the internet at home? Seriously do you expect a wifi hot spot to be able to stand someone downloading a file as large as Sims 3?

What about the glitches? For a Sims 3 user a huge chunk of problems come from their digital files. Many people have yet to get their copy of Barnacle Bay they paid for to download and install in-game.

Personally, I'd rather have a hard copy. If I had an iso file I downloaded the first thing I'd do is burn a hard copy of the game!

Guest said:

I'm not crazy about this for several reasons and most of you have already touched on them. Having said that... EA, will you be offering us a discount for all this? After all, giving up all that packaging.. our games should now cost no more than $30 per... what do you think?

Guest said:

I guess in the CEO's statement where he said the change over would be swift is TRUE.... I just lost all my sims 3 games and content with the latest update and had to reinstall everything only after manually deleting the games and registry. Because get this; my base game sims 3 was a store bought disc and my expansions were digital downloads and after the update my games no longer worked. The EA support tech told me that people can no longer have both physical disc and digitals...Thanks for NO proper warning EA..... YOU just LOST another customer....

captaincranky captaincranky, TechSpot Addict, said:

I guess in the CEO's statement where he said the change over would be swift is TRU.Thanks for NO proper warning EA..... YOU just LOST another customer....
You say that, but do you mean it?

SNGX1275 SNGX1275, TS Forces Special, said:

What about Mac users? Is EA games going to make their products still available for those users? What about people without the internet at home? Seriously do you expect a wifi hot spot to be able to stand someone downloading a file as large as Sims 3?

Going disk-less fits in well with Apple, you'll just purchase through the App Store.

Guest said:

this is the worst idea ever!

here in our country, i can buy new game discs at $30 each.

while at steam they sell like $60 and in digital copy, the heck, i still have to waste electricity to download the file. T_T

Guest said:

The only Reasons I EVER buy digital.

1. want to play it on day 1 and am un-able to pick it up @ at store because I work night shift.

2. It's cheaper than the hard copy + it doesn't make me have the disc in the drive.

it takes me about a 8+ hours to download a game. Unless EA is going to do anything about the caps on speed and download limits on ISP (att and comcast are my only options at this point sady...) this is a BAD move.

also, as it has been said before how are people going to get it if they DON'T have a form of online curancy. Im pretty sure "little Timmy" isnt going to have access to a credit card to buy that new game when his parents are un-able to get a credit card.

I don't know about you, but thouse "pay by check" options aren't really time effective in most cases.

Last time I did pay by check it was for a online game back in the 90's for $10-$15 for a lifetime membership on AQ when I was little....

And yes, I have the orgin client. some of us were blind sided when we bought battlefield 3 from the EA store. (like me) and now we are forced to use orgin to get it. Orgin was fine until recently. Not sure if its my hard drive or the program, but everytime I try to load it, it freezes for a few minutes. and it doesn't "like" mutiple installs... I have BC2 on Steam and BC2 on Origin and it "somehow" removed it. there are bugs to work out. but the fact that people who dont have access to online currancy are being shoved aside is a dumb move..

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