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Will Digital Video Game Sales Grow This Year

May 18, 2017 by   | Category: Gaming

The growth of full game downloads in the console space has surprised EA, the firm says.

The company told investors during its Q&A – as transcribed by Seeking Alpha – that full game downloads accounted for 33% of unit sales. That’s considerably ahead of the firm’s previous estimate of 29%, and 9% higher than the figure it posted last year.

The firm says the chief driver was “the continuing evolution of consumer behavior. but some of the out-performance was driven by the shift from Star Wars Battlefront to Battlefield 1, as well as the digital performance of our catalog.”

It expects full game downloads will account for 38% of its console unit sales during 2017.

However, EA’s CFO Blake Jorgensen anticipates that for the whole industry the figure will be even higher – around 40%. This is because EA’s big titles, such as FIFA, often perform strongly in markets with slower digital uptake.

“In terms of full-game downloads, the number surprised us because we had thought that it’d be around the 5% year-over-year growth,” he said. “Some of that may simply be the consumer is shifting faster than we know or we expected. The trends can sometimes jump in dramatic ways and maybe we’re starting to see that overall shift. And some of it could be product-related. We do think the industry will end calendar year 2017 probably above 40%. We will most likely lag that as we have historically because FIFA is such a large product and it is so global that we are operating in markets where either the ability to purchase digitally, or the ability to download based on bandwidth speeds, are compromised and thus we tend to skew a little lower on FIFA than we do on the rest of our portfolio. So we’ve always lagged the industry slightly, but we are excited about the potential that you’re seeing the consumer possibly shift quicker to digital than we’d originally anticipated.”

EA remains optimistic about the console space. It says that at the end of last year the install base for both PS4 and Xbox One was 79m, and that it would grow to 105m by the end of 2017. This figure does not include Nintendo Switch, although EA is bullish about Nintendo, too.

“We have a tremendous relationship with Nintendo and have done for many, many years and are excited by the fact that they have come out very strong and are bringing in a whole new player base into the ecosystem,” said EA CEO Andrew Wilson. “We continue to be bullish on it and are looking at other titles that we might bring to the Switch. Our console number that we quoted does not include the Switch at this point, so anything that Nintendo does is additive to that number.”

There were a few additional takeaway points from EA’s financials. The publisher said that the traditional DLC mode is becoming “less important” as it moves further into live services. We’ve already seen EA evolve its DLC model with Titanfall 2, which is giving away all of its DLC for free.

EA also revealed that its new EA Motive studio in Montreal has 100 staff, and the publisher expects that number will grow to 150.

Courtesy-GI-biz

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