Games retail will be gone in ten years, says EA exec
21st Aug 2012 | 11:07
The executive vice president of EA Games predicts that the brick-and-mortar games retail business will not survive another ten years.
In an interview with CVG, Patrick Soderlund said the momentum of digital distribution will not cease and packaged goods will become a thing of the past.
"We know that packaged goods work today, and the majority of our current revenue comes from that," he said. "That's still a viable business model. But in the long term we'll see more and more people gravitate to downloaded content."
In the interview, Soderlund was asked to estimate when he thought physical games retail would be abandoned as a viable distribution model.
"I think it's going to be sooner than people think," he replied. "I think it's going to be sooner than ten years."
Soderlund emphasised that these were his opinions and "might not be what EA thinks". It appears that, from a personal perspective, he sees a value in collecting physical copies of games.
"I happen to think that there's something about physical content, like books, that's collectable and satisfying to own," he said.
"I still want physical content but I'm not part of the new generation of gamers. I remember a time when I bought a cartridge and excitedly read the manual on my way home, imagining what the game was going to be like. Maybe kids don't have that anymore."
Soderlund went on to say he was not convinced that moving to a digital-only model would freeze out the casual audience.
"The distribution method won't change how games are advertised or marketed, just how they are delivered to customers. My 96 year-old grandmother plays Cut the Rope and World of Warcraft. Honestly I don't think there's a digital barrier for the causal audience any more," he said.
EA has made more than $1.3 billion in digital game revenues over the past twelve months, chief executive John Riccitiello recently claimed. The publisher's first quarter earnings report showed that it made about $592 million in packaged goods sales, but digital is creeping up on that figure and in the same period provided $342 million in sales.
The company's second-in-command, Peter Moore, recently claimed that ">digital revenues would surpass discs within 36 months.
"There will come a point, whether it is two or three years from now, when we say we are doing more in digital media now than we are in physical media," said Moore.