Publisher lauds the silent success of the freemium model
Electronic Arts chief John Riccitiello believes the digital goods market has helped the company recover from recent stumbles.
The CEO, speaking last night at the Goldman Sachs Technology and Internet Conference in San Francisco, said a large part of its turnaround has come via the lucrative free-to-play model.
“On balance, in its current state of rivalry, free-to-play is a better model than pay to play," Riccitiello said.
“Play first pay later – that’s a very compelling model for today’s gamer."
He explained that total revenues from FIFA Ultimate Team – a downloadable add-on to the FIFA games – had quadrupled from $10 million to $40 million when the price of the core game went from $10 to zero.
"As the head of our Playfish division likes to say, 'There's no such thing as free to play... it's play first, pay later,' and that's a very compelling model," he said, as quoted by VG247.
Electronic Arts has been argressive in its push in the social and mobile divisions – a move which it hopes distinguishes it favourably from blockbuster rival Activision.
EA Mobile has released a number of chart-topping iPhone games, and has demonstrated its will to dramatically sink the price of its games to get one over its rivals.
Meanwhile, the social game subsidiary Playfish is returning on EA’s $400 million buyout of the firm with a string of hit Facebook games.
Riccitiello insisted that this push into the digital space isn’t a move away from retail.
That would be demonstrated best with its Old Republic project at Bioware – an expensive attempt to usurp World Of Warcraft.
But he made it clear in his speech - the digital, mobile and social games business are now key pillars in its game plan.
"Our FIFA business is a leader on iPhone, a leader on Android, a leader on social networks, a leader on free to play," he added.
"We did it with Dead Space, we did it with Mass Effect, we did it with Dragon Age, we did it with The Sims."
He said EA is now seeing “significant revenues post-release”, as games “stay in the tray longer”.