EA Executive: Retail Will Be Dead in a Decade

August 21, 2012 -

EA Games executive vice president Patrick Soderlund said during a recent interview with Computer & Videogames that brick-and-mortar retail distribution will probably be dead in the next decade. He also thinks that the new generation does not care all that much for owning physical copies of games. He also noted that the acceleration of the digital distribution space is not slowing down, even as packaged goods sales are.

"We know that packaged goods work today, and the majority of our current revenue comes from that," he said. "That's still a viable business model. But in the long term we'll see more and more people gravitate to downloaded content."

He also thinks that traditional retail distribution will lose its viability "sooner than people think," adding, "I think it's going to be sooner than ten years."

Soderlund emphasized strongly that all of this is just his personal opinion.

You can read the whole thing here.

Source: Gamespot

 


Comments

Re: EA Executive: Retail Will Be Dead in a Decade

So does going all digital mean that EA will finally admit that each new years Madden is simply a DLC expansion pack and not an all new $60 purchase?

EA needs to be careful with their assumptions, they sort of have a history of being somewhat wrong because while they often look at customers stated desires, they typically fail to take into account the customers unstated expectations.

EA should also be completely and utterly horrified at the thought of retail distribution of games going the way of the dinosaur. Retail is the chain by which EA keeps the development houses in thrall. It's what makes them a "publisher", the specific ability to publish and distribute the game. In digital distribution they have no where near the clout. Do you think Steam is taking anywhere near the cut of a game sold through them that EA takes out of a Bioware game? (or was taking out before they bought them outright?). In the retail world EA is the big dog. But in digital? They are a poor also ran. They will be unable to sell games that aren't from studios they outright own. (what third party studio would sign a deal for digital distribution with EA?) And forces of attrition will slowly and steadily dissolve those in house properties. EA has never shown an ability to nurture properties over time. Without their retail distribution clout they lose their ability to acquire new to replace the studios they have strip mined and burned with new.

In short EA is prohesizing their own doom. They are just too stupid to realize it.

Re: EA Executive: Retail Will Be Dead in a Decade

I have not bought a physical copy of a game in years, everything has been through Steam or more directly as a digital download from the company. The retail options for pc games are terrible, good luck finding more than a handful of recent games on the shelf anywhere convenient. 

The concern that a company might go under and the game will no longer be available through them is a legitimate concern but I think it is tempered by the fact that the internet is a great repository of pretty much every game (and everything else) ever published. If company A goes down then torrent site B or abandonware site C will still have it on hand. When I want to replay a game I bought years ago I don't go digging in the garage for my old cds/dvds, I just find it online and download it. 

Re: EA Executive: Retail Will Be Dead in a Decade

So, retail is slowing down but digital is not. However, there is an overall slowdown in the industry. That means something: The losses in retail aren't all going digital. They're just not buying. EA better hope they're wrong in that case.

Part of the same thing, I think, is why used sales are such a big thing and why console games generally outsell PC games. $60 is a hard sell for a lot of games, but many people factor the trade-in value with the purchase decision. Buy the game for $60, but you can get up to half of it back if you catch the right deals. The actual net payment for a console game to somebody who regularly trades them back in might be more in the $30-40 range, not $60.

And that whole system has become part of the process of ownership. When you take that system away (it's not there in digital sales), the actual price people pay per game goes up, while their value goes down, and rather than turning all used sales into new sales, you actually risk reducing new sales.

 

And that's assuming people never have to worry about losing the ability to reclaim their games. Even if they don't, most people don't want their games forever - or at least not all of them, we all have a favorite or two that we just never part with - but they do want something back for them when they don't have them anymore.

Re: EA Executive: Retail Will Be Dead in a Decade

Maybe but I bet EA will be dead before then. ^^


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Re: EA Executive: Retail Will Be Dead in a Decade

One can only hope...

Re: EA Executive: Retail Will Be Dead in a Decade

Naa, mix two things: DRM and dependency on DRM servers. This alreadyy cost a friend of mine at least one movie - since Blockbuster no longer maintains their DRM servers apparently...

No physical media means I have to trust the people I buy the media/game from - so ummm, Physical media please.

Don't get me wrong, I like Origin and have the Sims3 among others, along with almost all their expansions - and while I install from Origin, I still like having the physical media.

So first, lol - the content industry bitches about digital media - give them a bit longer, and they'll bitch about having to provide physical media.

Re: EA Executive: Retail Will Be Dead in a Decade

"... the new generation does not care all that much for owning physical copies of games."

Provided they don't lose access to the games they've purchased.

Re: EA Executive: Retail Will Be Dead in a Decade

I envisioned over a decade ago that games would go entirely digital one day. This is not a surprise and just a likely progression. I don't have a problem with this and we're all going to have to deal with this future, like it or not. My problem lies with infrastructure and security.

Infrastructure - Even much of the industrialised world doesn't have reasonable broadband coverage. In my town I'd have to pay out my ADSL2 contract if I had to move south of the railway line because my ISP can't provide there. This isn't a publisher's fault or problem, but they need to understand that physical copies will still be required for these markets unless they see them as insignificant enough to abandon them.

Security - Valve or EA aren't likely to go bust in the near future, but shit does happen. So some safeguard needs to be in place so that we can still play or backup our purchases in such an event. Unfortunately some games are 'always-online' or require online activation, regardless of you having a physical copy. All these become junk if the company goes under, so there needs to be a safeguard for this. I'm not sure what safeguards, if any, currently exist.

Re: EA Executive: Retail Will Be Dead in a Decade

Infrastructure is the key here, and it's something that is lacking in many parts of the US. Without that infrastructure, unless those potential customers simply give up on gaming altogether, brick & mortar retail will not be dying at all, much less in a decade.

Re: EA Executive: Retail Will Be Dead in a Decade

Actually sir I do care about having a physical box I can purchase. I pre ordered a physical copy of the next World of Warcraft expansion for that very reason. Plus it helps cement to me that I bought it and own it.

Re: EA Executive: Retail Will Be Dead in a Decade

"He also thinks that the new generation does not care all that much for owning physical copies of games."

Maybe, but I think plenty do care whether or not they own digital copies of games.

 

Andrew Eisen

Re: EA Executive: Retail Will Be Dead in a Decade

EA is actually in a pretty good position when it comes to examining the numbers for this sort of thing. Despite the faults that people often find with Origin, mandatory integration on multiple high-profile titles means that they can compare "copies purchased via Origin" to "retail keys activated" directly and with as few confounding variables as possible.

 
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