wraggster
July 4th, 2012, 00:53
EA (http://www.edge-online.com/filter/all/tags/69) Labels president Frank Gibeau (http://www.edge-online.com/filter/all/tags/1400) has questioned the relevancy of market research group NPD (http://www.edge-online.com/filter/all/tags/148), which publishes sales data and analysis on the game industry, while proposing a future in which the publisher will see most of its revenue come from digital sales.
NPD's monthly retail reports, much like weekly sales charts, still focus on physical sales data - a leaning Gibeau believes is outdated, especially as the reports tend to depict an ongoing decline in game sales.
“It's an irrelevant measure on the industry," he toldGamesindustry.biz (http://www.gamesindustry.biz/articles/2012-07-02-ea-is-going-to-be-a-100-percent-digital-company-period-says-gibeau). "It's totally irrelevant. We don't even really look at it internally anymore."
With digital distribution now such a large part of the industry, Gibeau's point is pertinent - sales reports and charts would be unrecognisable from their current state if the likes of Fez, Minecraftor even Jetpack Joyride were accounted for.
It's rather more complicated than that, of course, especially given the wildly varying price points of today's games and, of course, the distorting effect of free-to-play. But Gibeau believes that EA will see most of its revenue coming from digital sales in "the near future."
"I think one of the problems with this industry right now is that people tend to look at it like they're looking at an elephant through a straw," Gibeau continues. "They only see a little parts of it and they're not looking at the total picture, right?
"Between Facebook, social, mobile, free-to-play on PC, Asia, consoles... it's a vibrant, growing, huge market. An occasional bad report from NPD, which measures a sliver of what's actually happening in gaming gives people an erroneous impression."
EA's recent push into more digital territory paid off for the company (http://www.edge-online.com/news/eas-digital-push-pays), seeing it return to profit this year after a $276 million loss the year prior. Given that success, Gibeau's comments are hardly surprising, but they're also leant real weight.
Even with the clear seismic shift that's taking place, however, retail remains an important part of any company's overall strategy and damaging relationships with the highstreet is something EA will have to be wary of - a point not lost on Gibeau.
"Retail is a great channel for us," he qualifies. "We have great relationships with our partners there. At the same time, the ultimate relationship is the connection that we have with the gamer. If the gamer wants to get the game through a digital download and that's the best way for them to get it, that's what we're going to do."
NPD president David McQuillan countered Gibeau's criticisms, playing down the relevancy of digital to today's market, citing group research which shows new physical software represented 56 per cent of consumer spending on games in the US during 2011 - that percentage rises to 70 in the fourth quarter of the year as the christmas release schedule hits.
"While digital is a growing part of the industry and something that needs to be addressed for the future, the current games industry is still largely rooted in retail and any industry player involved with triple-A content simply can't take their eye away from the retail environment," he explained.
“Successful companies are looking at how their products are performing within all channels, particularly retail. For that reason, we were surprised to read the comments by Mr. Gibeau that EA does not look at NPD data internally at all.
“While we will not comment on the specifics on our long-standing relationship with EA, we can say with confidence that we have daily dealings with all of our major publisher clients. And we know for a fact they're using the data."
Irrespective of whether EA, or any publisher for that matter, uses NPD's data, the continued absence of digital sales from mainstream reporting is becoming harder to ignore.
http://www.edge-online.com/news/ea-points-digital-future-calls-npd-irrelevant
NPD's monthly retail reports, much like weekly sales charts, still focus on physical sales data - a leaning Gibeau believes is outdated, especially as the reports tend to depict an ongoing decline in game sales.
“It's an irrelevant measure on the industry," he toldGamesindustry.biz (http://www.gamesindustry.biz/articles/2012-07-02-ea-is-going-to-be-a-100-percent-digital-company-period-says-gibeau). "It's totally irrelevant. We don't even really look at it internally anymore."
With digital distribution now such a large part of the industry, Gibeau's point is pertinent - sales reports and charts would be unrecognisable from their current state if the likes of Fez, Minecraftor even Jetpack Joyride were accounted for.
It's rather more complicated than that, of course, especially given the wildly varying price points of today's games and, of course, the distorting effect of free-to-play. But Gibeau believes that EA will see most of its revenue coming from digital sales in "the near future."
"I think one of the problems with this industry right now is that people tend to look at it like they're looking at an elephant through a straw," Gibeau continues. "They only see a little parts of it and they're not looking at the total picture, right?
"Between Facebook, social, mobile, free-to-play on PC, Asia, consoles... it's a vibrant, growing, huge market. An occasional bad report from NPD, which measures a sliver of what's actually happening in gaming gives people an erroneous impression."
EA's recent push into more digital territory paid off for the company (http://www.edge-online.com/news/eas-digital-push-pays), seeing it return to profit this year after a $276 million loss the year prior. Given that success, Gibeau's comments are hardly surprising, but they're also leant real weight.
Even with the clear seismic shift that's taking place, however, retail remains an important part of any company's overall strategy and damaging relationships with the highstreet is something EA will have to be wary of - a point not lost on Gibeau.
"Retail is a great channel for us," he qualifies. "We have great relationships with our partners there. At the same time, the ultimate relationship is the connection that we have with the gamer. If the gamer wants to get the game through a digital download and that's the best way for them to get it, that's what we're going to do."
NPD president David McQuillan countered Gibeau's criticisms, playing down the relevancy of digital to today's market, citing group research which shows new physical software represented 56 per cent of consumer spending on games in the US during 2011 - that percentage rises to 70 in the fourth quarter of the year as the christmas release schedule hits.
"While digital is a growing part of the industry and something that needs to be addressed for the future, the current games industry is still largely rooted in retail and any industry player involved with triple-A content simply can't take their eye away from the retail environment," he explained.
“Successful companies are looking at how their products are performing within all channels, particularly retail. For that reason, we were surprised to read the comments by Mr. Gibeau that EA does not look at NPD data internally at all.
“While we will not comment on the specifics on our long-standing relationship with EA, we can say with confidence that we have daily dealings with all of our major publisher clients. And we know for a fact they're using the data."
Irrespective of whether EA, or any publisher for that matter, uses NPD's data, the continued absence of digital sales from mainstream reporting is becoming harder to ignore.
http://www.edge-online.com/news/ea-points-digital-future-calls-npd-irrelevant