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EA: Live and Subscription-Based Services Sustain Company’s Long-Term Future

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In these times, Electronic Arts is in a lot of talks, despite its controversy surrounding the microtransactions of Star Wars: Battlefront II, which forced it to speed up the time for rebalancing some statistics and of some mechanics.

The issue is still very tedious, and in the midst of all this, CFO Blake Jorgensen spoke at the UBS Global Technology Conference, saying that through live services within the games, the publisher can achieve revenues that do not have a maximum limit. To help them, in this, there are also subscription services of EA Access and Origin Access.

Jorgensen explained that EA has spent most of its earnings over the year on successful online activities such as FIFA Ultimate Team and Madden Ultimate Team. Thanks to these, the company monetizes for a much longer time than the simple exit of the game.

That’s not all because EA Access (Xbox One) and Origin Access (on PC) subscription services also help EA considerably to keep its audience active (and willing to spend).

“If you have a live service component to [games on EA Access and Origins Access], you can have a subscription that’s uncapped,” Jorgensen said. “Give people a way to spend money on things they want to do and that they enjoy doing vs simply capping them at $9 or $10 per month and that’s all they can ever spend. We find people play twice as many games, they spend twice as long on them, and they spend twice as much money, because you’ve reduced the cost of trial to close to zero.”

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Jorgensen made a practical example: “Maybe they went into the subscription to play Star Wars, they try Madden, they find out they like the game, like playing Madden Ultimate Team, and then may spend money on Ultimate Team. It’s a great consumer offering, but it’s also for us a much more stable business, an easier business for us to run long-term and doesn’t have the same limited cap that most subscriptions would have.”

What EA has learned is that, in short, its business is increasingly dependent on new games and the ability to keep players glued to those that exit: “Less and less of our business is dependent on brand new titles. But we’ve been able to bring out some great new titles that have turned into franchises, like the Star Wars activity, like Battlefront, for example, that layer in more franchises over time. We’re trying to do that with BioWare’s Anthem game – I was up in Edmonton with the team a few weeks ago, looking at the game and playing it. It’s looking very exciting, the team’s done an amazing job and we’re really excited about that for next year.”

EA, in short, fully supports the philosophy of Take-Two, who a few days ago announced that it will include microtransactions for persistent monetization in all its future releases. The future of the video game industry is all about this: “For us, trying to move the business to more live services, grow our subscription part of the business, is trying to build a much more steady business. I’m very comfortable with a steady growth rate, and with digital that continues to become a bigger part of our business and continues to expand the profitability of the business,” Jorgensen concluded.

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