EA's Peter Moore: Digital revenue will overtake retail in two years
EA COO Peter Moore is betting on a dominating role for digital revenue in video games. Speaking at the Digital Entertainment World conference, Moore said (via GI.biz) he expects digital sales to fully eclipse retail numbers in two years.
He likened the rising prominence of downloads as a type of "creative destruction," in which an industry is unable to regulate the evolving purchasing habits of its consumers. Moore compared the scenario to the music industry, which he says is still recovering from its shift away from relying primarily on physical disc sales for revenue to a more download-centric model.
Moore relates that EA's "customers" used to be retailers but, in the global always-online environment of the modern era, those "customers" are now the players. This has caused EA to triple its customer service operations over the last five years and even affected the company's marketing efforts – TV advertising spend is down and online and social advertising is up. Social media is more important than ever to EA.
EA just reported third-quarter earnings for its fiscal 2014. While the massive games publisher suffered an overall net loss of $308 million during the period, digital sales accounted for over half of all earnings. EA attributed this big upswing to a 60 percent increase in transactions in EA's lineup of collectible card-based simulations, FIFA Ultimate Team, Madden NFL Ultimate Team and NHL Ultimate Team.
http://www.joystiq.com/2014/02/24/ea...ail-in-two-ye/
