[This post originally appeared on Adrian Crook’s Freetoplay.biz site.]
From a Fortune article, EA CEO John Riccitiello had this to say about the free to play business model and how it will affect traditional retail games.
Riccitiello says the $31 billion gaming industry will suffer if it doesn’t start to reevaluate its business model. Game executives at Sony (SNE), Microsoft (MSFT) and Activision (ATVI) must answer some tough questions in the coming years, like how long they can expect consumers to pay $59 for a video game. Riccitiello predicts the model will be obsolete in the next decade. [Ed: emphasis mine]
“In the next five years, we’re all going to have to deal with this. In China, they’re giving games away for free,” he says. “People who benefit from the current model will need to embrace a new revenue model, or wait for others to disrupt.” As more publishers transition to making games for online distribution, Riccitiello says he expects EA will experiment with different pricing models.
As a colleague just said to me in an email, “It’s encouraging to see they (EA and big publishers as a whole) recognize the issue”.