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Traditional videogame business model is sinking ship, says EA Sports boss

Written by Andre Yoskowitz (Google+) @ 19 Oct 2009 13:40 User comments (16)

Traditional videogame business model is sinking ship, says EA Sports boss Electronic Arts Sports president Peter Moore, speaking at the PLAY Digital Media Conference this week, made some interesting comments as to the future of disc-based games, going as far as to call the current business model a sinking ship.
"Look at the platform we're on, it's a burning platform," Moore stated, via IGN. "As a concept, do you stay on the platform and face certain death, or do you jump into the water and face probable death? Most of you would choose probable death, so you start moving towards a hybrid model of digital distribution."

He continued: "I'd say the core business model of video games is a burning platform. Absolutely. We all recognize that, and we'll recognize it 10 years from now when we tell our grand kids .We'll tell them we used to drive to the store to get shiny discs that have bits and bites on them and we'd place them in this thing called a 'disc tray,' and it'd whirl around…and they'll go 'What?' So, the concept of physical packaged discs and the core business model that is video games as it currently stands is a burning platform."

Moore did note however that EA's distribution channels still heavily rely on discs, and that the company ships about 130 million per year.

"As digital distribution becomes more and more, we'll continue as an industry to work with retail and to ship discs, but more and more of the content will be in the 'cloud.'" he concluded. "More content will be delivered daily, weekly, or monthly, and less will be of the old model of cartridges and discs."

When asked about how far into the future he sees the all-digital revolution beginning, Moore said it could be up to 10 years away, with Microsoft likely leading the next generation of consoles into all-digital territory.

"As an industry, I still think we may be as many as a decade away from saying goodbye to physical discs," Moore added. "The important question is, what does the next console look like? Does it actually have a disc drive?"

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16 user comments

119.10.2009 13:54

sorry but personally, when i buy a game, i like knowing when i beat it or do not like it i can sell it or trade it in at EB/Game stop, or loan it to a friend. I belive the only reason why they are saying this is because they are losing millions a year on resales. Solution is, Gamestop needs to pay a royalty to the publisher when a used game is sold.

219.10.2009 14:10

You can file that philosophy along with the one about "finding a way to rid dependence on foreign oil".

319.10.2009 14:44

I think digital distribution is a really good idea but the prices would have to come down 5-10 bucks a game. The video game companies are saving money with this method, so shouldn't that saved money be handed down to the consumer also, at least a fraction of it should.

419.10.2009 15:19

I want the physical disk. As long as I have a choice, it will be physical.

519.10.2009 15:31

IMO, regardless of what you want, optical disks will go the way of the cassette tape, phonograph record and VHS tape.
In other words, it is only a matter of time before they are as obsolete as the floppy disk.
Already there is a huge upswing on PC's being sold without an optical disk drive. Vehicles are now being equiped with Digatal only tuners. There is a huge upswing in Digital only video players for High Def TV. The writing is on the wall.

Whether they stick to only on-line content or distribute on some form of memory chip is a very good question, but I think the optical disk is on it's last leg.

619.10.2009 15:42

I dont care if it is a disk, flash card or whatever. I want something physical. If my gaming device craps out, i dont want to loose everything. If one of my nephews want to borrow a game or whatever, i want it to be easily transportable. Physical/transportable memory will be around for a long time.

719.10.2009 17:57

Originally posted by glassd:
I dont care if it is a disk, flash card or whatever. I want something physical. If my gaming device craps out, i dont want to loose everything. If one of my nephews want to borrow a game or whatever, i want it to be easily transportable. Physical/transportable memory will be around for a long time.
Also people instinctively want to be able to hold something they purchase. Think about CD's. When was the last time you saw someone with a portable cd player? Damn near everyone has an mp3 player now. CD sales are reflecting that, but I don't think those will go away.

There is only one way that I see digital distribution working well for the masses. That would be to have your own digital account, and you can use that account on any machine you want to be able to access your purchased digital items for lifetime.

819.10.2009 20:05

Originally posted by Paladore:
sorry but personally, when i buy a game, i like knowing when i beat it or do not like it i can sell it or trade it in at EB/Game stop, or loan it to a friend. I belive the only reason why they are saying this is because they are losing millions a year on resales. Solution is, Gamestop needs to pay a royalty to the publisher when a used game is sold.

I agree that whatever product I purchase, I should have the right to resell it. It can be a pair of jeans or a video game. Why should
Gamestop be singled out though? Used car dealerships don't pay car manufacturers squat when they sell a car. Why should Gamestop?

919.10.2009 20:37

When you purchase a game you are not granted "ownership" but rather, are granted a "license to use".

The big question is whether this license is transferable or not. And that's an argument that has been going on since the first game was put on a floppy disk.

1019.10.2009 20:51

Quote:
Originally posted by glassd:


There is only one way that I see digital distribution working well for the masses. That would be to have your own digital account, and you can use that account on any machine you want to be able to access your purchased digital items for lifetime.
That is one of the biggest complaints I have with console tied accounts now. These should be tied to some other form of ID in the worst case scenario of your console frying itself and you loose all of your DLC.

1119.10.2009 22:18

The second games go completely digital, I stop buying games. Period.

1219.10.2009 23:52

I think Blu-Ray can keep disc games alive... There are discs that are 100GB and have no issues, no? I'm sure it's a cheaper alternative to flash memory of the same capacity (sorry if this is all wrong lol)...

1320.10.2009 13:13

I wonder when SD/flash either read only or kiosks will take over. It seems to be the next logical step for the next period until everyone has cheap fast wireless net connections in 20+ years.

1422.10.2009 8:16
alexeemo
Inactive

I buy new games and used one at Gamestop. I take extremely good care of my games as well. I have PS1 games that still work just fine. I love being able to trade, share, sell, and buy used games. Before they go all digital, they better fix some of these issues. The PSP Go was a great idea until they made it all digital. Now I can't buy used games or sell mine? I will not be buying it. What if your HD crashes? I have to download the game or buy another copy? Forget it! What if I pay $60 for the game and it sucks? I can't sell it as used? No way! I would NEVER buy a game again until I knew for certain I wanted to own it forever! Greed can cause the end of these companies. I hope they listen to what WE want as consumers. If they don't, I guarantee that some company will invent a new game system that gives us what we want and you can kiss all the others goodbye. Just look at the music industry. They are still trying to salvage an archaic business model. They encourage piracy by placing retarded restrictions on their music. Some bands are now offering free downloads. The bands get jack squat from the record labels. They make their money from tours. 5-10 more years and there may not even be record labels anymore. Same thing will happen to gaming if they don't adjust to digital with an extremely friendly end user agreement.

1522.10.2009 11:34

Originally posted by nintenut:
The second games go completely digital, I stop buying games. Period.
I don't think you need to worry about that. When that happens, i don't think you can buy anything, period.

1622.10.2009 13:38

Quote:
Originally posted by nintenut:
The second games go completely digital, I stop buying games. Period.
I don't think you need to worry about that. When that happens, i don't think you can buy anything, period.

Well said.

"The second games go completely digital, I stop spending monetary units on games. Period."

Better.

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