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EA’s Finances Signal Rise of Digital Sales

EA has just released their financial results for the quarter and one of the more interesting aspects of the documents released is the shift in consumer demand.

Gamers have grown up in an age of acquiring physical manifestations of video games, but times are changing. TheĀ financial data in EA’s 10-K ReportĀ has highlighted the growing trend in digital sales. Since the year 2015, EA has been steadily increasing digital sales at third-party storefronts such as the PlayStation Store and Xbox Store. In the year 2015 Microsoft’s digital store consisted of 10% of EA’s total net revenue. The following year PlayStation accounted for 16% while Xbox held 14% of EA’s revenue. Now in 2017 EA is gaining monetary gain at a 19% from Sony’s PlayStation Store and 17% for Microsoft’s Xbox platform. To compare that with physical disk sales Gamestop, one of the leading video game retailers in America, were “no greater than 10%” of total net revenue for EA in 2017.

This shift in video game consumption benefits mostly the developers. Before digital storefronts became front and center studios would lose second hand sales from retailers such as Gamestop. Gamestop would be able to buyback used copies and in turn resell those copies to other costumers keeping 100% of those profits. With developers claiming that development costs are far to high to sustain a AAA video game industry, it would seem only natural for these companies to find ways to increase their revenue.

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