EA CFO Expects 51 Million PS4 & Xbox Ones Sold by End of 2015, Wonders What the Next Console Will Be
In EA’s previous estimates this year, they expected the PlayStation 4 and Xbox One to reach a combined 49 million units by the end of calendar 2015. During yesterday’s UBS Global Technology Conference, CFO Blake Jorgensen raised that number by two million:
Clearly, consoles have sold faster than everyone expected. We’re ahead of the previous cycle in terms of the pace. We’re on track to see, industry-wide, about 50-51 million units by calendar year end. And typically, most of the consoles are sold in the last quarter of the year because a lot of it is around gift-giving.
Sony recently announced that PS4 sales had reached 29.3 million worldwide, with the company expecting to move 40 million units by April 2016, so EA’s prediction seems highly likely.
Jorgensen continued to talk about how developers this generation are beginning to truly utilize the new consoles:
The power of the new consoles is fantastic. I think software makers are just now starting to truly harness the power. The first year, you had people testing and pushing, but now I think you’re starting to see, particularly this fall and winter, a lot really exciting pieces of software in the industry that are taking the processing power of the console.
He also says the attach rate of games sold with new systems is roughly the same as the previous generation, full-game downloads made up 20% of PS4 and Xbox One game sales in the most recent quarter (they expect that to rise to 40% in the next few years), and the margin for digital games is nearly twice that of physical games.
Looking into the future, Jorgensen said one of the things that keeps EA up at night is, “What is the next console?”
According to him, EA believes that “deep, immersive gaming is something that consumers are always going to want to do,” and now they have to wonder what the method in which they do that will be. “We don’t believe that everyone is going to go to casual gaming only and leave deep immersive gaming that they have,” he added. “The trend has never shown that.”
Highlighting the fact that consoles are a bit “odd” in the sense that you don’t upgrade them every couple of years, Jorgensen says, “And so the question becomes, ‘Is there something that’s more of a PC-like device that sits in your house that does multiple things?’ It may stream movies, or music, and also allow you to play console games.”
He acknowledges that Microsoft is doing a lot with Windows that “might lead to a path they’re going to do down,” but Apple or Google might end up being the main manufacturers:
Apple and Apple TV is leading to a path that would include gaming. I think the thing to remember is a couple of key components. People understand there is a large market [for console gaming]; it’s a very engaged market; and it’s a market, by the way, that’s kind of accepted the 70/30 revenue split [between publishers and developers] that’s worked in music and books and others. And all of that implies that if it’s not Microsoft and Sony, it might be Apple and Google or someone else that wants to go after gaming. Our strategy is be in a position that we can handle a transition from any platform.
To help with that transition, EA has cut down the amount of different game engines from an all-time high of 26 at one point to just two: Frostbite and Ignite, with the plan for Frostbite to power every game in the future.