The march towards a digital revolution is gaining steam with EA, as analysts now say that the company is looking at actually surpassing $1 billion in sales on digital revenues alone. With the acquisition of Popcap Games, this might just be a reality.
Coming off of $833 million in digital revenues from last year, analysts from IHS Screen Digest say that EA has the potential to push well beyond that figure with Popcap now joining the fold. The firm believes that Popcap alone will bring in revenues to the tune of $75 million for mobile and free-to-play titles.
"EA should realize its ambition of creating a $1bn digital business this fiscal year with aplomb," the analysts said to MCV.
For EA, the big money makers are inherently in downloadable content and mobile titles. With those divisions making $295 million and $242 million, respectively, there is a strong incentive for EA to cut out the fat of physical sales. In fact, $94 million in revenues has come from full game downloading alone.
Subscription based gaming is also doing nicely, raking in $328 million in 2010. The new thrust of EA’s strategy will be to focus on digital, as stated by EA CEO John Riccitiello.
“There’s no one like us. There isn’t a competitor that’s a leader in console, PC, DLC, microtransaction, iOS and social networks,” said Riccitiello. “Today about a quarter of industry revenue comes from mobile, social, tablet and casual PC. We expect that 25 per cent to rise to 50 per cent or more in the coming five years.
“We’ve been stepping down investment against our core packaged goods business, and stepping up investment against digital opportunity. This year we’re getting close to 50/50. Three years ago, we were closer to 90/10.
“Virtually everything we’re doing now is against the digital opportunity. It’s where we see our growth. It’s where we see our margin expansion. It gets us that less seasonable, more ratable, and more profitable business.”
