Electronic Arts makes expensive games it hopes will sell well so they can make more expensive video games and hopefully return a tidy profit to investors that in part fund the expensive video games. It’s a cycle. It’s a business model that’s proven particularly effective over the last two decades. The problem nowadays is that it’s harder to make money on the expensive video games in the first place. How do you profit when people are buying used copies of Mass Effect 3 and giving all their money to GameStop? Or when they’re playing free MMOs like World of Tanks rather than Star Wars: The Old Republic? Hence EA’s Online Passes and microtransactions as part of their console games. It’s trying, somehow, to keep its revenue streams stable even as distribution models change.
So really, it’s no surprise that EA is discussing making microtransactions a feature in all of its games. Or at least most of them. The publisher isn’t entirely clear on this point yet.
It started on Feb. 27, when Electronic Arts CFO Blake Jorgensen spoke at the Morgan Stanley Technology, Media Telecom Conference. Jorgensen said that Dead Space 3, Real Racing 3, and other games in EA’s 2013 line up that prominently feature microtransactions are representative of all upcoming EA games. “The next and much bigger piece [of our business] is microtransactions within games,” said Jorgensen, “We’re building into all of our games the ability to pay for things along the way, either to get to a higher level to buy a new character, to buy a truck, a gun, whatever it might be, and consumers are enjoying and embracing that way of business.”
Contrary to Jorgensen’s remarks, the week that followed the Morgan Stanley conference was rife with debate over the company’s plans, because not all consumers are embracing that way of business. Many players are actively trying to find ways around microtransactions in EA games. On the other hand, game designers like Cliff Bleszinski (Gears of War, Unreal) rushed to EA’s defense.
EA is now backtracking on Jorgensen’s initial comments. Speaking at the Wedbush 2013 Transformational Technology Conference on Monday, Jorgensen tried to smooth things over. “I made a statement in the conference along the lines of ‘we’ll have microtransactions in our games,” said the CFO, “And the community read that to be ‘all games.’ And that’s really not true. All of our mobile games will have microtransactions in them, because almost all of them are going to a world where they are play for free.”
Jorgensen may mollify console and large PC game players, but the fact remains: EA’s console game business is hurting. Microtransactions may need to be in all games to keep them profitable enough to make more games.
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