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Digital sales to surpass packaged goods in 2011 - EA CEO

John Riccitiello predicts online offerings will generate more sales than boxed products this year; free-to-play games have highest average revenue per user.

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At UBS's 38th Annual Media and Communications Conference in December, Electronic Arts CFO Eric Brown was upbeat on the publisher's presence in the digital goods market. Speaking to analysts and investors, the EA exec said that the publisher is expecting to draw 20 percent of its revenue--about $750 million--from digital business, the vast majority of that coming from downloadable content and full-game downloads.

John Riccitiello
John Riccitiello

As for the greater industry, however, that figure could be more than half, according to EA CEO John Riccitiello. As part of an interview with Industry Gamers this week, Riccitiello said that digital goods market will, in his opinion, surpass the packaged goods business by the end of this year.

"At the end of [2011], the digital business is bigger than the packaged goods business, full stop," he said. "No questions in my mind. Then, you know, I think that we'll find ways to even sell our packaged goods content in chunks and in pieces and subscriptions and microtransactions."

"Look at what Warner and Turbine did with Lord of the Rings Online," he continued. "While I still think the majority of their revenue is from people giving them the premium subscription for $15 a month, there are a lot of people coming in and they upgrade. I'm not sure that $15 deal is that great a deal, but that's a separate issue…I think these business models are going to find their own feet. We're very careful about making sure we price appropriately for platform and also for the intellectual property."

Riccitiello went on to note that EA sees its highest average revenue per user (ARPU) from those who play its free-to-play offerings, such as FIFA Ultimate Team and Tiger Woods PGA Online. "You think about that and say, 'How can a free game be the game they pay the most for?'" he said. "We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it's free. Dirty little secret."

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trdrstv

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@Ladiesman17 Digital games have their place (as does digital music and video), but for the most part I enjoy being able to borrow/ loan games to friends and resell them when I get bored of them. Personally I would LOVE if they started adding a 'digital copy feature' for games like they do with most blurays now, then we could have the best of both worlds. :-)

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Jedilink109

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@tehepicpwnzor Oh whoopty frickin doo. Force Unleashed for PC is 26 gigs. It doesn't matter. The fact remains that if you're going to put a full install of a game on a COMPUTER then you probably have significantly MORE space than you would on a 360 or PS3. And either way, if you're getting these games from download sites such as Steam or GOG, you can delete the games and reinstall them any time you want, as many times as you want. If you're using a 360 or PS3 you have to use their HDD's which fill up pretty quickly. Not to mention the fact that unlike console systems you can easily buy a second HDD for your computer and also put games on that too, while the consoles only have space for one. I know what I'm talking about dude.

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Psikosis

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This is more wishful thinking than reality, at least for North American sales. It might be true in very specific genres like MMOs or casual games but not in mainstream, AAA titles like Call of Duty, Halo, or Need for Speed (which is where most of the money is at).

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Muteki_X

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John Riccitiello is the new Bobby Kotick

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oneligas

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the reason all CEO's and "Experts" claim that digital sales will surpass packaged good is that they want it to happen and it would cut down if not eliminate the costs of producing physical copies which would be a massive boom for their profits

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dipsetboy17

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is this dude high lol.

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Ladiesman17

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Why folks like having a BOX? You can't carry all of your collection box to your grave .... lol :D it's just mundane. what would happen if I go overseas, or something happens to my home, earthquake. etc. I can't take all my collection with me... I prefer a single box containing all of my collection on my HDD External .. or futuristic services like Steam. Nice Digital interface containing virtual cover, etc. we need more portable technology contains every information on single hardware!! that's classy ;) carrying 50 box is just too much for me :? changing my disc whenever I want to play somethin' is just lame. capiche...!!!

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FallenOneX

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"Then, you know, I think that we'll find ways to even sell our packaged goods content in chunks and in pieces and subscriptions and microtransactions." " You already do that, but you think we're stupid just because you call it DLC.

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godzillavskong

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I hope not. They are cutting out too many people by doing this and while I know it may be a smart business decision,I'd hate to see more people lose their jobs in certain departments, such as packing, shipping, or even the places that carry the games. It may be a long time before that actually becomes the norm anyways. I prefer a hard copy, but I'm not opposed to downloading a few things here, or there, but I'd rather have something that I can physically touch, knowing that it won't be unavailable like some downloadable titles. Like the Battlefield 1942 game on the 360. Once that game dies down, and a lot of people aren't playing it anymore, they'll shut the servers down, then the game will be useless.

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OJ_the_LION

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Every time I try to like EA, something like this comes out. Call me old fashioned, but I like actually owning the game I pay too much for, not getting "chunks and in pieces and subscriptions and microtransactions." Partly because of ownership, partly because games tend to be overall higher quality and have better flow when they're part of a coherent whole. I've very rarely run into DLC that actually meshed well with the main game, it's usually annoyingly separated from the main game in every way.

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ZoTrAcK

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I don't like the face of that guy!

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RapidFirE53211

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"I think that we'll find ways to even sell our packaged goods content in chunks and in pieces and subscriptions and microtransactions." Wow, it's guys like this that remind me that Activision and Kotick aren't the only bad guys out there.

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campbell153

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Oi people from EA... i dont know if you lot read these but.. stop charging me for DLC for a game i have just payed 40pound for then 2 weeks later your ad ons come out! it aint fair!.. also.. your "EA servers" suck!

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Crush_Project

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well normally id agree that digital sales are going to surpass, but since the ea guys are saying it, it must be a lie.

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SolidSizzle

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Just look at that guy! It's enough to give you nightmares :-S I'm not really up for this. It would make it difficult or impossible to share/trade in games which I do quite a bit...

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GoingPostal13

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"We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it's free. Dirty little secret." That says more about the morality of games publishers than I've read in a very long time ...

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LondonGamer986

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All I can say is (For consoles.)... NOOO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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tehepicpwnzor

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@Jedilink109 Crysis Warhead is 15GB. Not true. As a general rule for life, don't tell people they're stupid when you don't know what you're talking about yourself.

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Doug-358

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Does anybody read the article because it says that EA revenues mostly come from retail. He has some logic I just don`t get and he pretty stupid for saying that when most of your revenues come from retail. EA has lost it allure to me except a few titles like Mass Effect 3 and Bulletstorm it not much. This idiot needs to stop putting his foot in his mouth.

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ecw1983

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But PC gaming is dead !? (sarcasm)

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Heshertonfist

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Didn't he say this last year? Or a few months ago, maybe?

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fester420

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@swamptick If someone is stupid enough to forget their password then that's on them.

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cajunstrike

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Agreed. One would hope the digital versions of Electronic Arts' future offerings would ultimately have a significantly lower MSRP than their respective packaged versions. One would hope...

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Jedilink109

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@tehepicpwnzor That's not what he's frickin talking about. You don't sell those kinds of games for a console system, you do that for COMPUTERS.

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NColdhardt

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Call me old fashioned, but I'll never buy games digitally. There's something about the box-art, design and little booklet inside that whispers to me, "Buy me! We're worth it!"

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tehepicpwnzor

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Also, as a PS3 owner, I have to say this ain't gonna happen. Uncharted 2 was 24.9GB. I'm not downloading that kind of file. It would take about 16 hours to download that much info, and then after all is said and done, I've just lost 25GB out of the 160GB on my console. The answer is no, I will continue to buy disc-based games.

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tehepicpwnzor

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Guys, the $5000 is from advertisers. People aren't actually paying EA $5000. It's possible that you could get $5000 of advertisements thrown in your face if you play obsessively for long periods of time, but no, people are not paying $5000 a month.

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kvan33

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O_o $5000 in a month to play FIFA Ultimate Team???? Who is this stupid?

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smithboy1177

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Sure, I'll believe it when I see it. Chief concern: I can trade game with friends in the "real" and "physical" world.

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kwanzudood

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They're turning sales of physical media into a vehicle to drive DLC. I'll rue the day when a game has more content released via DLC than was released on the original disc. Basically the disc will turn into the game's intro, with the real meat of the game in DLC format.

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Oldboy08

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@trdrstv huh, didn't know that, I never ever download DLC and only check the store for demos. I mean, if I want a game, I get in my car, drive to Best Buy or EB Games and go buy my game, My HDD is full, so DLing a full game, like the giant 8GB GT5 is just ridiculous. I like to look at the instruction booklet as well. But anyways, thanks for relaying this news about the PSN and XBOX LIVE as I truly had no idea. Not gonna change my ways though :P

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Xplode_77

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Not very surprising.

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Doug-358

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Is this guy speaking out of the side of his mouth because to me he is. When 80% of your revenue comes from retail still I wondered what is his logic. Wasn`t a survey done that says only 4% of gamers download. This is the same idiot that was talking smack about Nintendo which may hurt EA in the long run.

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2chase

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@gbyd agreed... or maybe a G-man from Half-life resemblance.

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gbyd

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Does anyone else think this John Riccitiello guy looks WAY too suspicious? Like if this were a video game, he'd be the guy to reveal himself as the REAL villain after you beat the guy you thought was the last boss.

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Mattius04

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@ Marcusraitor I feel you. DLC is the reason I dont pay full retail price on video games anymore. You drop 59.99 on a game and a month later DLC is released for $10 to $15. It makes me furious!

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Jedilink109

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@M-S-M-S Check out GOG.com. That site has TONS of wonderful games and they're ALL NO DRM. There's goodies and extra content and it's just a great service. check it out.

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GabrielOnuris

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@fester420 "It would be nice if you could just rip the game to your HDD after putting in a license key or something and always have the ability to redownload it if the disc does become damaged." I would love if I could do that indeed, with all my games. Then I could build a little memorial to stock all my physical games, lol! I think there are some games you can do it actually; I have the Guild Wars disk with a serial, and I think I can download it from the site if I lose the CD. Starcraft 2 can be downloaded from its site too, if you lose your disk, since you still keep you serial key.

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Jedilink109

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@swamptick If you buy games from Steam, you can install them on ANY computer if you put Steam on it. There's no install keys and no limits for installing. As long as you are logged in to your account you can download and play ANY of the games you buy from them. They also offer HUGE discounts and sales on games all the time. And if you buy games from GOG, they're often times older games that won't work on current systems but GOG makes them work. They also have a STRICT NO DRM policy on ALL of their games, you can download your games as often as you want, you can even put em on a flash drive and pass the game out to your friends. GOG ALSO offers tons of extras and goodies on every game they have. The only difference in GOG games and a disc copy is that is you don't get a physical copy.

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wiouds

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I do not want to go through a middle man to play the games like Steam. It is like asking a company to drive my car.

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M-S-M-S

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@Jedilink109 Same here. I've being buying digital copies on Steam in the past 2 years. Didn't buy a boxed game since I discovered this amazing service. There is no surprise with this article. Digital distribution is cheaper, more convenient, and Steam and other services have huge game list to offer.

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Marcusraitor

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I prefer Physical Copies, no physical games and i Quit Gaming.I Hate DLC and i never going to buy DLC unless its free thats what the videogames should be you buy a physical copy for 59.99 and thats it you have the full experience not to buy something physical at half and the other half of the game you have to pay it thats why i dont buy DLC this is killing gaming.

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MattieIce

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@swamptick ...that's not correct man. Lots of games require digital registration now. Having the disc is not enough. You need online verification to play the game. For example: Starcraft II. You can't play that game unless you're connected to battle.net. I'm assuming it's the same for MMOs.

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Jedilink109

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The majority of games I bought last year were from Steam and GOG.

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swamptick

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I would MUCH rather own the hard copy and have it for life as opposed to risking losing a password or key code. If your HDD gets messed up, you are OUT. Lose your account? You are OUT. Have the disc and don't ruin it like a freaking idiot? You have your game for life.

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FlashCharge

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Cell phones and ipads are doing well and most digital games are marketed for this group. There are really two markets are there. One hand helded and the other hardware. Nothing is totally free but the nickel and dime me really shines there.

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swamptick

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Wrong.

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japanesegoth

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and EA shouldn't let this guy do interviews...everything he says just seems to be confirming what people have thought about EA all this time. it's all about the money and how they can take advantage of us (or just dumb people, i.e. whoever spend $5000 on FIFA)

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nurnberg

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The gaming industry is going in the wrong direction. These greedy rich executives will destroy the gaming industry. They are slowly turning gaming into a hobby for rich people. This is so wrong.

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fester420

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I would much rather purchase a game and own it for life as opposed to buying a disc and it going bad after a while. It would be nice if you could just rip the game to your HDD after putting in a license key or something and always have the ability to redownload it if the disc does become damaged. I would also rather not have to get up to change games and be able to do it right from the XMB. For those of you who feel the need to have something physical in your hands, just take out the HDD and hold it for a minute.

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