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We toss around a lot of fancy words when talking about the future of the game industry. But now one of the biggest publishers around, Electronic Arts, is proving that when it comes to digital, it’s more than just buzz.
SuperData Research predicts that EA, the publisher of franchises like Dead Space and Mass Effect, will earn most of its revenue from digital games by the end of 2013. That means focusing more on streaming and downloadable content. Revenue from physical products has dropped below $500 million.
This trend isn’t just happening with EA. A January report indicated that the overall digital market improved 39 percent from the same time one year prior.
This quarter is the second-to-last period that physical content drives sales for EA, according to the online-games market research firm. A lot of revenue will come in from Battlefield 4, which is expected to release later this year and increase retail sales to an estimated $539 million. Then mobile revenue across consoles, PC, and mobile devices will overtake the physical side by Q3 2013, reaching roughly $2.1 billion.
Companies like EA, Sony, and Valve are now focusing on making digital more accessible through hardware — like with Nvidia’s Project Shield, the PlayStation 4, and Steam’s Big Picture. It’s all about enabling digital content to overtake the traditional console-based environment of the living room by introducing new technology, new platforms, and more ways to play.
“We do think there’s going to be more digital business and digital download business,” EA’s chief financial officer Blake Jorgensen told SuperData in a financial earnings call last week. “But a lot of it will depend on when we release titles, when Sony and Microsoft choose to release titles. And in no way do we want to see the retail channel disappear. We think that’s an important part of the overall industry, and we want to keep that a vibrant channel for us long term as well.”
It’s about balance, and with more digital business will come a wider availability and ease of digital gameplay components due to better storage capacity, Jorgensen added.
Joost van Dreunen, the chief executive officer of SuperData, told GamesBeat that Electronic Arts is coming into the “digital revolution” well prepared. So what does this mean for gaming?
“I think it’s positive when large incumbents adapt to a new environment,” he said. “Sure, there are critics, but the leaders in the game industry have moved a lot faster to accept new distribution and revenue models than, say, the music or film industry. Perhaps most importantly, this benefits gamers, who now have access to quality games on a platform of their choosing.”
EA hasn’t responded to our request for comment.