EA's Riccitiello predicts fewer titles per year, harder push for digital distribution

Having already implemented major layoffs for a second year in a row, EA CEO John Riccitiello needs to start cutting more nitty-gritty costs. Following up on previous statements about cutting the number of releases per year, the executive tells Reuters that the company will have 40 releases in the next fiscal year, but that around 30 releases a year "wouldn't shock [him] at some point in the future." Focusing on fewer, quality titles sounds like the THQ gambit.

Another way EA can reduce costs is by cutting down on its packaged goods manufacturing and distribution. Riccitiello believes packaged games like Madden NFL will always have a following, but that digital distribution will account for half the industry in 2010, up from 40 percent. He states that EA's "goal" for the publisher's digital distribution operation is to become "as important as, and over time maybe more important than, our packaged goods business."

Reader Comments (59)

eh, this only affects console gamers.

pc gamers will always (god i can hope) have steam.

and steam rocks.

because obviously alot of consumers are for it.

and even if you are against it, you support it any ways when you buy DLC.

they see

1) steam sales are making tons of money (not as in special sales, but overall)
2) DLC makes millions
3) they save money from not having to print manuals or make disks or make cases

and they will charge the same for it because they can, even though it is cheaper.

and you will buy it, even if you say you wont, just like mw2 "boycotters" purchased it (i still wont play it! back off).

complain all you want, you know it wont do anything. The only way to protest is with your wallet.

Because the people complaining are usually the people posting. The people who are happy with digital distribution are too busy playing their steam, psn, or xbla games. There are a huge number of people that are happy and fine with digital distribution. It can co-exist with physical media. It doesn't have to take over completely to be successful.

There was an interesting article on the cost breakdown of Gears Of War on Forbes:

http://www.forbes.com/2006/12/19/ps3-xbox360-costs-tech-cx_rr_game06_1219expensivegames_slide_4.html?thisSpeed=20000

You're right, development costs are the largest chunk of a game's price, but there are still a lot of smaller costs that are eradicated by digital distribution. The cost may not be massively different, but it is different.

Making software available worldwide is very different to making hardware available worldwide. Of course, there are all kinds of censorship and legal issues around certain content (for example, different companies owning the rights to different IP in different locations), but there are many, many games without any of these problems.

Usually, it seems the sole concern is wringing as much local currency out of a consumer as possible.

PC services are certainly better for sharing content, but not games consoles. I have to activate my PSP for each of my entirely legitimate PSN accounts if I want to play titles bought with those accounts. To do so requires Wi-Fi access, something you cannot guarantee on the go. Still, lending a friend my PSP is much less of a hassle than lending them my Xbox 360.

Publishers can't have it both ways. If they expect us to subsidise their increasingly high development budgets, that development had better be complete by the time the title ships. I can understand polishing features in response to user feedback, but critical flaws should be identified and resolved before launch.

Not to mention the fact companies are increasingly shipping empty shells that require additional DLC to flesh it out. EA's own FIFA 10 and Dragon Age, two titles I recently purchased, are constantly asking me to microtransact.

Interesting breakdown. I'm really surprised the publisher was only taking 1.5% of the profits, but I guess microsoft was making more of that money back because the game would increase console sales.

You also have to consider that a retail game is printed and shipped only once. A digital game is downloaded initially, and that may be a small cost. But services like XBL and steam allow users to delete and redownload titles again and again and again. They can just print the game and ship it and be done with it, they have to maintain a service for the foreseeable future. The costs are definitely different though.

As for expanding into other markets, it's clear that companies don't want to stop people from buying things just because they are in another country. Valve countered Russian piracy by expanding their services to Russia rather than a silly effort to increase DRM. I'm sure they want to expand into as many markets as possible, but it's not something that can easily happen overnight.

I totally agree about them not having it both ways though. There's something seriously wrong with paying $60 for an unfinished game.

Launch DLC is one of my biggest peeves. Things like Dragon Age DLC effectively change the cost of the full game to $70. Gears of War 2 shipped with the flashback maps as DLC in order to counter the used market. These are really greedy, slimy tactics and I really can't stand them. It won't stop though. When they said MW2 would have DLC people cheered. For some reason people think they are paying to get more out of there game instead of paying more to get what should have been there in the first place. DLC can be fine when the game ships completely and a few months later the devs decide they want to do more with it, but more often than not it's just used as an artificial way to boost the price of a game.

It is because they don't care. They want to control the market, and they want to control the games. Instead of you owning a game, you will now be licensed to play it. That and it kills off used games sales.

are puff cheeks the new face palm??

I thin PSN and XBLA are great for smaller games. Games like Shadow Complex, Lucidity, Pixeljunk Eden, etc would never survive at retail. Most of them would never even make it to retail because publishers wouldn't take the chance on them. But for full games, why would I buy Bioshock on XBLA when I can buy it from a store for less and then lend it to a friend when I'm done?

As for the time to download 50gb, I don't think that's too important. Both the PS3 and 360 let you download in the background while you play other games. The real issue would be if you have a 120gb ps3 and you want to buy 3 games that take up that much space, you can't. Even with a 640gb HDD (The largest you can get at 2.5") you would only be able to have 12 games on your PS3 readily available. I don't know about you, but I have a lot more than 12 games.

And yea, these games need to have demos. Even with new games if you make a scene at your gamestop or target they'll cut the bullshit and do a return for you. If I buy a game digitally I want to be able to play it first before I throw away $15-60

As long as bandwidth caps are in effect or a revolutionary way to compress data is found, digital distribution will never become a standard. ISPs are already bitching at the people who stream everything, imagine if 100 million people were downloading 8-50GB games and movies everyday on top of the usual streamers/downloaders/uploaders. They can't even handle Youtube as it is. Ha, digital distribution my ass.

EA's Riccitiello predicts fewer titles per year, harder push for digital distribution

Reader Comments (59)

Posted: Dec 2nd 2009 4:22PM BrianH said

Posted: Dec 2nd 2009 5:05PM BrianH said

Posted: Dec 2nd 2009 5:12PM CaramelZappa said

Posted: Dec 2nd 2009 5:13PM Dale P said

Posted: Dec 2nd 2009 5:44PM CaramelZappa said

Posted: Dec 2nd 2009 7:13PM (Unverified) said

Posted: Dec 2nd 2009 7:22PM warxroutione said

Posted: Dec 2nd 2009 8:30PM CaramelZappa said

Posted: Dec 2nd 2009 11:08PM (Unverified) said

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