EA Looking at a “Free-to-Start” Model for Console Games
Shedding some light on their performance through last-gen consoles, EA CFO Blake Jorgensen revealed on yesterday’s earnings call that “game sales for last-generation consoles were also much stronger than we had anticipated” during Q3 of Fiscal Year ’15. In terms of overall revenue, COO Peter Moore said “we saw about $100 million in incremental revenue in Q3” on current-gen platforms, which he clarified meant PlayStation 3 and Xbox 360.
Later in the call, Jorgensen brought up the fact that, during 2014, “There were roughly 3 million old generation console sold here in the U.S. And half of that came in the last two months of the year. So obviously, Christmas discounting probably drove a lot of that sales.”
Of course, the focus is on PlayStation 4 and Xbox One going forward, with EA contributing much of their digital sales success to the new consoles. To help build their digital revenue, CEO Andrew Wilson says the company has invested over the last couple of years in a platform that will facilitate transactions in numerous ways, be it free-to-play with micro-transactions, premium downloads, subscriptions, or a combination of them all.
One avenue they believe will be big in the future is a free-to-start model, with Wilson explaining:
On free-to-play with consoles, we think about this much to everything about free-to-play overall. And there is a couple of different vectors to this. The first is, as we look to the future, we believe a very big part of that player base will expect a free-to-start experience. When we look at film, television, music, books very often there is this free trial notion that actually on boards new players, new listeners, new readers or new viewers into a service. We’re actively looking at how we could offer that type of experience to our players, console and across other platforms.
From there, it really comes down to, do they make their next step in terms of a premium download, a micro-transaction in a free-to-play type environment or a broader relationship through a subscription. And our expectation is that we will be offering all three of those options to players, both console and across other platforms.
Closer to the end of the call, Jorgensen talked about the upcoming Battlefield Hardline, saying, “We think the selling will be very strong for Hardline, it will be important for the quarter, but I think it’s a strong indicator going forward.” He also noted that Battlefield 4 player levels are some of the highest they’ve seen in the last year, proving people play Battlefield games for a long time.
Do you think free-to-start would be a viable business model?