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Riccitiello: Digital downloads won't kill physical media just yet
EA CEO John Riccitiello said recently that 2011 would see digital sales overtaking retail sales, but before you start trashing all of those $60 discs and plastic cases you bought, not so fast. Riccitiello also says that game discs aren't going away "any time soon." Sometimes it's just easier to plug in a disc or buy a box than receive a huge download over a relatively slow connection, he says, and what the industry will end up doing is choosing certain cases out of all of the options for various uses. "I think it'd pretty silly for us to stream Scrabble to you," he says. "Why would you want to pay for bandwidth for us to redraw a Scrabble board sixty times a second? That's just sort of bad math, if nothing else." Not to mention that "the disc can actually be a great starting point for a digital business, like an MMO, World of Warcraft, for instance." While digital and streaming services will almost certainly see growth this year, it's far too early for game makers and retailers alike to completely abandon physical media. The consumer, says Riccitiello, "doesn't care what the technology is, what lives behind the veiled curtain; they just want it to work." Amen.
"Full stop": John Riccitiello predicts digital sales dominance in 2011
Out with the old, in with the new -- these words are often used every January, but for John Riccitiello they also signify the balance tipping between digital and physical sales. As Electronic Arts' CEO put it bluntly to Industry Gamers: "At the end of [2011], the digital business is bigger than the packaged goods business, full stop." Riccitiello drew this conclusion after looking at the recent market trends of titles like Lord of the Rings Online and EA's own free-to-play games. In fact, he admits that the "dirty little secret" of EA is that some of its F2P titles end up being the games players drop the most money on per month, such as those who pay upwards of $5,000 a month for FIFA Ultimate Team. With EA on the cusp of launching Star Wars: The Old Republic this spring (fingers crossed), the question of EA's MMO pricing structure is still up in the air. However, Riccitiello thinks that we're in for a year of transition to mostly digital purchases: "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."
