EA: Digital distribution to overtake traditional retail this year. Do Train2Game students agree?

Train2Game students are very aware that digital publishing could very well provide them with the all important first step into the games industry.  Game developers and studios would previously need to rely on pitching ideas to studios, but now thanks to digital distribution, they’re able to publish their own content to a potentially huge audience using the internet.

As Train2Game students will know, this digital market is ever growing with both independent studios and big developers increasingly selling their games to the consumer through digital downloads. Now one prominent figure in the games industry – EA CEO John Riccitiello – says that digital will be bigger than retail by the end of the year. Train2Game students may see this as a very bold claim indeed!

The EA executive told Industry Gamers that he believes the digital side of the games industry will create more revenue than the sales of physical goods by the end of this year and that it could change the way even the biggest games are distributed:

“At the end of [2011], 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”

Ricciliello also told Industry Gamers how the games industry needs to be flexible when it comes to distributing content – some advice that Train2Game students will most likely appreciate.

“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 magnetising, 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.”

The EA executive also revealed how free to play games can bring in tremendous amounts of income because of optional in-game purchases. He used FIFA 11’s Ultimate Team mode as an example:

“Our highest 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.”

It’s a big title by a big company, but Train2Game students are surely to be buoyed by the fact people could pay for extra content in any games they make in future! Train2Game students can find out more about how games with in-game purchases can be highly successful in last months Train2Game interview with industry analyst Nicholas Lovell.

Riccilello’s comments come as Swedish game developers Frictional Games announce that their PC exclusive Amnesia: The Dark Descent has sold 200,000 copies, and has digital downloads to thank for the success. (The game was discounted in the recent Steam Sales) The studio say they are now reassessing the PC as a platform:

“The sales that we have had (and are having) are more than enough to motivate developing a game with the PC as the main (and even only) platform.

“Based on what we have seen, the online PC market is just getting bigger and bigger, and we are convinced we are far from the end of this growth. We think that other developers that consider making their game exclusive to a console might want to think again.”

Of course, the biggest example of a independent game finding success through downloads is Train2Game forum user favourite, Minecraft. Independent developer Notch has seen Minecraft downloaded over 750,000 times and the title – which is now in Beta – has brought in over $10 million.  You can see a more in depth look into the history of Minecraft and the games development in this post on the Thoughts of Train2Game blog.

As Train2Game students can surely see, the comments by John Riccitiello, the increasing revenue of free to play games, and the massive success of Minecraft show that the games industry is truly adapting to digital downloads as means of distributing games. This was also confirmed by TIGA CEO Dr. Richard Wilson, who previously told the Train2Game blog that an increasing number of British game studios are turning to digital distribution.

But will digital distribution really overtake physical boxed copies of games in 2011? We’ll have to wait until the end of the year to find out for sure.

So Train2Game, do you agree with John Riccitiello about digital distribution being bigger than traditional retail by the end of the year? Are you surprised by the amount FIFA 11 Ultimate Team is making? Do you still prefer to buy games in a box? And ultimately, would you rather see your games sold as a physical product rather than a download?

As usual, you can leave your thoughts here on the Train2Game blog, or on the Train2Game forum.

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