As the industry increasingly moves toward digital distribution and online-enabled games, developers are relying less and less on packaged goods, but EA COO Peter Moore says that retail will always play an important role in a studio's overall business.
As the industry increasingly moves toward digital distribution and online-enabled games, developers are relying less and less on packaged goods, but EA COO Peter Moore says that retail will always play an important role in a studio's overall business. At the Bank of America Merrill Lynch 2012 Global Technology Conference on Wednesday, Moore outlined EA's continued growth in digital markets, but pointed out that much of the studio's overall revenue still comes from disk-based games like Madden and Mass Effect. Considering these games all offer some form of digital content after launch, Moore said retail goes a long way toward encouraging DLC purchases or microtransactions after that initial sale. "Once we get that disk installed in the tray of an Xbox or a PS3, we then look at our consumer on an ARPU basis," Moore said. "We love what retail does for us. We love its ability to create massive launches and create excitement. GameStop probably sees three million hardcore gamers walk through their doors every day, and that's a marketing opportunity for us." In addition to serving as a prime marketing vehicle, retail stores also allow digitally-inclined publishers to interact with users who don't want to pay for digital goods online. "A lot of our consumers don't own credit cards. A lot of our consumers are still afraid of what happened to the PlayStation Network when 77 million accounts were accessed by Anonymous in 2011," Moore said. "A lot of our consumers prefer to go into retail buy those Xbox Live or PlayStation Network cards, and retail gets a very strong margin on that. For retail, if they can evolve to be not just a physical media purveyor, but a digital media purveyor, it'll play a very strong role in our business going forward." In addition, Moore said that retail cards for downloadable content perform extremely well, particularly when they're available alongside the launch of a game. If publishers can provide optional digital content right alongside a new physical product, Moore said it provides a perfect opportunity to boost a game's initial launch revenue. "The other key thing is selling digital content on the day of launch...When we sold Mass Effect 3 back in March, we saw a 40 percent attach rate that first week to DLC at GameStop in the United States. Not only are you selling a $60 game...you're selling $20 DLC, so the sale becomes $80," Moore said.
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