EA and the Future

Mitch Lasky:

A lot of the buzz around the EA interregnum has focused on EA’s relevance in digital distribution, mobile gaming and free-to-play. Can EA win in these new markets? What should a 21st century EA look like? It is interesting to think about EA’s assets and the current state of the digital game economy in light of the challenges a new leader at EA might face…

In my experience, the incumbent packaged goods companies clearly see mobile, digital distribution and free-to-play models as inevitable. They know what’s coming and have known for some time. But within the senior management ranks of these companies there is still a lingering perception that digital doesn’t, in their words, “move the needle” sufficiently – meaning that the revenue generated from existing console franchises still far exceeds the revenue that can be generated, even in aggregate, on new platforms and through new business models. There is an appreciation that the higher-margin revenue from digital can enhance profits but not really produce top-line revenue growth for a company like EA or Activision, doing in excess of $4 billion in annual sales.

This is one of the best things I’ve read in a while; a textbook-like overview of the challenges faced by a company in the process of being disrupted.