Electronic Arts plans to grow its digital game business to become one-third of their total revenue over the next few years and that includes starting to charge for what one analyst described as very long game demos.
The comments came during an analyst visit to Electronic Arts' Redwood City headquarters and meetings with the company's executives.
One of Electronic Arts strategies will be to release what they call "premium downloadable content" on the Playstation Network and Xbox Live for $US10 to $US15 and then later release the full game for a full price, EA Group General Manager Nick Earl told Wedbush analyst Michael Pachter during the recent meeting.
Pachter writes in his report of the meeting that this premium downloadable content would "essentially be a very long game demo, along the lines of 2009's Battlefield 1943". The "full-blown packaged game" would released shortly after the download version, he writes.
Earl told Pachter that the strategy would allow the company to limit the risk of marketing the full game and would "serve as a low-cost marketing tool".
A marketing tool that it sounds like you'll be paying $US10 to $US15 for. We've contacted Electronic Arts for comment and clarification, but have not yet heard back. We'll update this story when and if we do.
During the same meeting at EA, John Riccitiello, the company's CEO, told Pachter that the "company had performed poorly over the first years of his tenure, and admitted that the turnaround of the company was taking longer than he originally expected."
Riccitiello estimated that Electronic Arts was about two-thirds of the way through its turnaround, and one-third of the way through its "transformation to the distribution of intellectual property through multiple channels."
He added that he expects the company to grow its digital business to one-third of EA's revenues within the next few years.
Another major way that EA plans to achieve that goal, Riccitiello told Pachter, is for EA to "exploit all of its
packaged games with ancillary digital revenue streams."