Electronic Arts Selects Live Gamer For Online Microtransactions

Today game publishing giant Electronic Arts is announcing that they’ve selected microtransaction/virtual economy service provider Live Gamer to help monetize its online gaming products. This is major news for the game industry, as America’s largest game publisher continues moving away from the old school retail model and towards social network-driven, free-to-play gaming, with revenue driven more by virtual item sales than sales of cardboard boxes on shelves. Last year, EA made a huge move into social gaming with the purchase of Playfish; this partnership with Live Gamer strongly hints that the company will put more of its existing “core gamer” franchises online, with Live Gamer handling sales.

After all, EA has already been experimenting with a free-to-play, microtransaction model for its core games, most notably Battlefield: Heroes, a multiplayer shooter in the comic vein of Team Fortress 2 (and in my opinion, a damn fun game), which launched last year to impressive results. While today’s announcement doesn’t name any of the EA franchises that’ll use Live Gamer, it’s likely we’ll see versions of their most popular titles get the free-to-play treatment soon. (If EA doesn’t launch a free, Facebook-embedded version of The Sims soon, they’re crazy.) And where Electronic Arts goes, expect the rest of the industry to follow.
For Live Gamer, this news is the third major partnership announcement just this month, following right after RealNetworks’ casual game network GameHouse and major publisher THQ, making the New York-based company a plausible contender for the title King of Virtual Currency Monetization. For company President and Co-Founder Andrew Schneider, who I spoke with recently, the industry’s move to free-to-play games is an inevitable one for Western game developers, who are only imitating a model that’s worked extremely well in Asia for years. In the US, the ARPPU for consumers spending on Live Gamer, he told me, is an impressive $24, but an amazing $60 in Japan; at the same time, 50% of core gamers are already spending on microtransactions. With this EA deal, expect that percentage and that ARPPU rate to go up soon.