Sony, Microsoft and Nintendo all cut the prices on their consoles earlier this year, and while there was a definite increase in sales as a result, some felt the bump should have been more than it was. Still, Electronics Arts CEO John Riccitiello is optimistic that console sales haven’t even begun to peak.
“We actually have seen a pretty substantial pick up in hardware sales, particularly for the PS3,” said Riccitiello in a Reuters interview. “The pick up is pretty much what we expected. The other thing I would point out though is that the lowest price hardware is $199 and in the history of our industry, most hardware typically sells for $149 or below. That’s still in front of us, so that makes us feel better about the longer term, as hardware manufacturers get to that price point when we’ll see, yet again, another big pick up in sales.”
When asked about the digital part of EA’s business Riccitiello said that if you add up all the digital downloads, games on Facebook, MMOs and the like, “it’s almost half the industry now; about 40 to 45 percent. Next year, it’s likely to be the largest share of the total industry, it’ll be bigger than the console games all put together.”
“A couple years ago, EA embarked on a plan to really build itself up in this new frontier and in the last quarter alone, we did $138 million in revenue and if EA’s digital business were a stand alone company, it would be the darling of Wall Street,” he continued. “It’s in a larger company right now, but we’re building it very quickly and our goal in Electronic Arts is to have a very profitable packaged goods business, but to also have a digital goods business of a similar scale over time.”
