Analyst: EA To Release Paid DLC Prior To Packaged Game Launches
After an investor visit with Electronic Arts, analyst Michael Pachter said that the publisher is planning a strategy that will involve selling "premium downloadable content" before a packaged game's release.
According to a Monday investor note from Wedbush Morgan's Pachter, Nick Earl, general manager of EA-owned Dead Space studio Visceral Games, revealed the new strategy.
Pachter wrote, "The PDLC would be sold for $10 or $15 through Xbox Live and PlayStation Network, and would essentially be a very long game demo, along the lines of 2009’s Battlefield 1943."
He added, "A full-blown packaged game would follow shortly after the release of the PDLC, bearing a full retail price. Mr. Earl believes that the release of the PDLC first limits the risk of completing and marketing the full packaged version, and serves as a low-cost marketing tool."
Pachter separately told Gamasutra in an email, "I think that the plan is to release PDLC at $15 that has 3-4 hours of gameplay, so [it has] a very high perceived value, then [EA will] take the feedback from the community (press and players) to tweak the follow-on full game that will be released at a normal packaged price point."
"If DICE were able to follow Battlefield 1943 with a full-blown European WWII campaign game a few months later, it would have been a wild success," Pachter said.
He continued, "EA’s view is that the PDLC costs a lot less to develop (essentially, it’s the first few levels of the full-blown game), and they have the opportunity to fix whatever needs to be fixed in the packaged product that is released a few months later, whether that entails doing more of what people like or doing less of what they don’t like. It sounds like a brilliant strategy to me." Gamasutra has contacted EA for further clarification about the new strategy.
EA is becoming increasingly active in digital distribution and other online-focused revenue streams. Aside from a $300 million acquisition of social gaming company Playfish last year, COO John Schappert recently said at both the DICE Summit and Game Developers Conference this year that the publisher would be using physical discs as the basis for digital strategies.
Pachter stated in his investor note that EA CEO John Riccitiello "said that the line between packaged product sales and digital revenues would soon begin to blur, as EA intends to exploit all of its packaged games with ancillary digital revenue streams."
CFO Eric Brown also reportedly said that Visceral Games' formally unannounced Jack the Ripper game will be a "new PSN, Xbox Live game." Last year, word emerged that EA trademarked "The Ripper," leading to speculation about Visceral's next project. The studio just released Dante's Inferno earlier this year, and is also working on Dead Space 2.
Pachter said that EA has "missed expectations badly for two years running." But he also said he was "impressed" by Riccitiello's candidness about the company's current state and future prospects.
"We’ve been wrong about this stock for almost five years. Either we’re stupid, stubborn, or unlucky, but we’ve been wrong. The definition of insanity is doing the same thing over and over again, each time hoping for a different result," Pachter wrote.
"This time, while we are again hoping for a different result, we see evidence that the company is not doing the same things over and over again: lower headcount, fewer facilities, fewer games, a greater use of outsourcing, innovative combinations of digital and packaged goods content, a better greenlight process and a growing digital business," the analyst said. "This time, we think that EA is on the right path."
[UPDATE: EA VP of corporate communications Jeff Brown told Gamasutra in an email that the publisher will continue to offer an array of pricing strategies to consumers. He wrote in full:
"- EA is working on a number of projects for delivering premium content to consumers before, during, and after the launch of a packaged-goods version of the game.
- EA SPORTS, EA Games and EA Play are each experimenting with download strategies that deliver fresh game content in formats players want to experience.
- To date, there is no set pricing strategy for the entire EA portfolio. And many of the proposals include free-to-play content on models similar to Madden Ultimate Team, Battlefield Heroes and Battlefield 1943.
- None of the proposals call for charging consumers for traditionally free game demos."]