Electronic Arts have let go 1,500 staff and dropped a dozen unannounced titles recently in a major cost-cutting and restructuring plan, but it has many pondering on what this means for the games industry in general.
The cost-reduction plan has come shortly after EA's acquisition of game developer, Playfish, for a total of $400 million (US). It has signified to many about EA's shift from disc-based retail store games to social and online games and their new direction in that space. Their press release contained the following statement confirming their new aim from the acquisition:
"The acquisition accelerates EA's growth in social entertainment and strengthens its focus on the transition to digital and social gaming."
Additionally, John Schappert (EA's COO) has reiterated on EA's new focus...
"The digital business is very complementary to our packaged goods business. Digital downloads allow us to sell additional content to players and keep our titles fresh at retail."
Shacknews has quoted EA CEO John Riccitiello on some interesting numbers concerning declining software sales and the rapid growth of online games. From Shacknews...
"Industry packaged goods software sales [e.g., the usual $60 retail game] are down approximately 12% year-to-date." This comes despite their enjoying a slight 4% increase in share for the same in North America and Europe. At the same time EA sees the digital market, in which they include mobile, micro-transactions, subscriptions, and advertising, growing at a rate of 20% or better for the next several years.
It's hard to deny the popularity and the numbers boasted for online social gaming. The stats behind Playfish games include "150 million installations and over 60 million active players with over a billion play sessions per month between its ten games". Their titles include Restaurant City, Quiztastic! and Bowling Buddies on popular social network sites and apps on Facebook, MySpace, iGoogle, and iPhone. Read more at Shacknews.com