Game Marketing Tips, Analysis, and News

Thursday, December 9, 2010

Downloadable Revenue For EA Hits 20% Of Sales

Electronic Arts CFO Eric Brown's been talking about the company's download revenue at conferences lately, and he's released some facts and figures. So far in 2010 EA has raked in $750 million in digital sales, compared to $430 million last year. Brown expects digital sales to account for 20% of revenue this fiscal year, and to be a major factor in future sales growth.

That's not surprising given how regular game sales have been for the past couple of years industrywide. It looks like 2010 will end up being about 8% lower in sales through traditional channels than last year's sales (which were down from the previous year).

EA expects to bring in as much as $100 million this year from full-game downloads. Which no doubt causes a little heartburn for GameStop and other retailers, which is why they're not losing any sleep when publishers complain about used game sales. Really, though, if EA didn't sell full games via download, then Steam would just take more of that audience. Digital sales are inevitable. Blizzard must have done quite well with Cataclysm sales via download, as the lines were down substantially at retail stores over expectations. Which is not great news for the PC market at retail stores, but Blizzard probably doesn't care.

The interesting thing about EA's experience is that much of their sales come from digital add-ons, like the FIFA Ultimate Team mode where players can buy trading cards that let them add players to their team for a few games. Some whales (borrowing the gambling industry's term for big spenders) spend up to an astonishing $700 on these card packs. FIFA 09 brought in $15 million from these trading cards, and FIFA 10 brought in $30, and FIFA 11 looks to bring in $40 million. The cost of developing those cards is a million or two, so this is a very profitable area for EA.

We can see the relentless advance of alternate monetization schemes continues. All of the high-growth areas of the game industry are in non-traditional areas; the classic console game is in the second year of lower sales, and 2011 doesn't look any different. Opportunities are expanding for small developers, but taking advantage of those opportunities will require new ways of doing business.

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