When people think of game developer and publisher Electronic Arts, they associate it as one of the largest and most profitable game companies worldwide. Now, after four consecutive quarters in the red, EA is increasingly turning to social games as part of its efforts to strengthen the company’s digital efforts.
Before he left for hot social gaming startup Playdom a couple of weeks ago, former COO John Pleasants told paidContent.org that digital downloads through OnLive, microtransactions, and even social games are all in the works. EA hopes to generate $500 million in digital revenues this year.
In addition, EA is adding more online and social capabilities to some of its most popular titles. EA Sports has been leading the way: Tiger Woods PGA Tour and NCAA Football 2010 both allow for online competitive play.
However, this is only the tip of the iceberg. Before he left, Pleasants said microtransactions from social games will create the most revenue. To meet these future revenue goals, he says EA has gone into “investment mode.” EA will be “announcing deals with companies that will be of note some time in the near future.” J2Play could be high up on the list, as we’ve heard the company was recently acquired.
In addition to possibly buying more social gaming companies, Pleasants says that EA will be building out four new social network games from scratch.
But as Daniel Nations points out, Electronic Arts’ track record in isn’t always the strongest, but EA has had strong related releases too. One of the primary examples is the FIFA franchise. The latest online version just launched in China. In four days, it reached a million registered users and generated $254,000. Furthermore, with the FIFA 09 expansion, Ultimate Team, players can build up their teams with digital cards. EA sold $10 million worth of them in the first four weeks.
Many industry analysts think EA should focus on the type of games it does best, but the success of the social games and virtual goods revenues cannot be ignored. EA seems confident in the potential of these younger business models. Time will tell if the behemoth developer can build healthy, long term revenue streams around them.