2011 is the last year of disc-based gaming's dominance, says Electronic Arts' chief executive.
By 2012, sales of digitally distributed games will surpass those of packaged goods, John Riccitiello said in an interview with IndustryGamers.
"At the end of [2011], the digital business is bigger than the packaged goods business, full stop," Riccitiello said. "Then, you know, I think that we’ll find ways to even sell our packaged goods content in chunks and in pieces and subscriptions and micro-transactions."
Wedbush Morgan Securities analyst Michael Pachter estimated that digital distribution – which includes Facebook games, MMOs and mobile games as well as services like Steam and Xbox Live Arcade – generated around $11-12 billion last year. But he said that traditional packaged games accounted for over $21 billion in 2010.
"I don’t know if Mr. Riccitiello is counting something else, but it would take a doubling of the digital revenues I listed" for downloads to overtake discs, Pachter said in an e-mail to Wired.com.
"I see all of these revenue streams growing, but not doubling, in 2011," he said.
In the interview, Riccitiello intimated that EA is raking in cash through direct downloads – even with "free" games.
"Our highest ARPU (average revenue per user) are free-to-play games among paying users," Riccitiello said. "We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it’s free. Dirty little secret."
"I think that free-to-play works pretty well, but [I] question whether the ARPU is higher than packaged goods," said Pachter. "It’s possible that the ARPU of paying customers is a tad higher, but it’s not likely that the average paying customer pays anywhere near $5 per month, so I think he may have overstated things a bit."
Electronic Arts recently revamped its overall publishing strategy, slashing its upcoming release schedule and publicly denouncing single-player games.
Riccitello said that the company would pursue any and all methods of selling games – iPad, Facebook, free-to-play, discs.
"We're in all of those businesses," he said.
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