It should come as no surprise that the digital market space and micro-transactions are quickly becoming where the big bucks lie and where the video game industry in headed. EA Games CEO John Riccitiello agrees, thinking the digital marketplace will overtake physical, boxed media in 2011.
"At the end of , the digital business is bigger than the packaged goods business, full stop. No questions in my mind. 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," Riccitiello told Industry Gamers in a recent interview.
Riccitiello continued the interview by talking about how successful games like Lord of the Rings Online are when the titles themselves become free and players can choose to pay for premium content, be it weapons, armor, gold, etc. In fact, revenue has tripled for Lord of the Rings Online since the game went free-to-play. Even stranger, EA has seen the free FIFA Ultimate Team make upwards of $5,000 from a single user through its micro-transaction system. Talk about irony.
"Our highest ARPU (average revenue per user) are free-to-play games among paying users. You think about that and say, ‘how can a free game be the game they pay the most for?’ We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it’s free. Dirty little secret."
Riccitiello concluded his interview by expressing what he believes to be the key to success in this changing business model for the gaming market: options. His conclusion is also incredibly obvious.
"I actually don’t think that there’s a lot of mileage in trying to decide exactly how consumers want to buy their entertainment content. They may want to buy it on an iPad; they may want to get it through the social network, they may want to pay for it through micro-transactions and monetizing, or they may want to pay for it all at once. They may rather pay a subscription price in order to count on what their costs are going to be, but they may want to pay for it all at once and never have to pay for it again. We’re in all of those businesses and I think the way this is going to work is that the models that the consumers like the most are going to grow the most.”