EA believes digital basis of next-gen will be a boon to revenue
During E3, EA held and investor's meeting during which COO Peter Moore said the firm will be "aggressively getting after the preorder business" and will be also be focusing more on DLC as it provides a better average revenue per user allowing the company to get "$70, $80 or $90 from that customer," in total after spending the initial $60 for a game.
Moore said moving forward, the firm will focus more on the digital side than in the past, as the ability to net more revenue through digital content is proving itself time and again.
"If you go online, you're seeing a $60 price point for a next gen product for us," he said. "I believe that we'll add to that with DLC full game downloads, of course, which Microsoft in particular announced, allowed us -- day-to-day download of our content will allow us to be able to deliver digital aspect of that business very aggressively. But looking at the customer more from an ARPU perspective rather than a packaged goods perspective, we think there's a great opportunity to get $70, $80, $90 from that consumer.
"But upfront from the clients, it's a $60 price point."
Moore said his team are looking at next-gen as a huge opportunity, and for every next-gen title sold, for now there will probably be 4.5 to 5 units of the same title sold on current gen systems.
"As we roll into FY '15, as the installed base of hardware grows, we get our attach rate up, then we're going to see the full benefit of what we're seeing right now with the launch of the Xbox One and PlayStation 4," he said. "But a lot of focus on making sure we deliver Battlefield 4, a lot of focus on FIFA and a lot of focus on making sure that we deliver the downloadable content that's available in both of those games to be able to drive the top line revenue."
This will result in less risk for EA this year with next-gen and more reliance on it in fiscal year 2015. Next-gen will also provide more monetization opportunities above and beyond the $60 price point as mentioned above.
"We had, of course, huge success with Battlefield 3 Premium," Moore explained. "It allowed us to continue to sell the Battlefield 3 client for the best part now of 18 months. The engagement levels started to grow, which is the opposite of what we've seen traditionally in this industry, with more and more people playing the deeper we've got into the cycle of the game itself.
"Battlefield, when it came out, obviously was a $60 client. You add in a $50 Battlefield Premium subscription service that was five map packs over about a 12-month period, and you get attach rates of 20% to 30% over the lifetime of that. You book a FIFA, for example, as well on top of that, and you've got, again, a $60 client and it holds its price incredibly well. It's a tremendous catalog product. FIFA '13 was the number 2 title last week in the U.K.
"It shows the power of what we do with a sport that's 365 days a year almost. The ability for us to be able to do the add-ons - it's a multi-hundred million dollar opportunity each year for us on top of the core client. With our FIFA relationship, even bigger opportunities then to be able to leverage that as we go into emerging markets, where that type of behavior, DLC, microtransactions, subscription services are more prevalent than we see in the Western world. So we tend to look at our consumer as something to be engaged 24 hours a day, 365 days a year. It's a games-as-a-service mode more than it is simply selling plastic nowadays and our ability to deliver fresh content in the console business."
Moore said that with new technologies emerging, especially the cloud, EA is currently testing the various experiences it can bring "using the processing power that is in the cloud and using its servers" to deliver more, faster, and easier the more things evolve.