Originally Published on Techdirt.
This is a strange one. A few months back, we highlighted some comments from EA in which it postulated that deeply discounted games were bad for business. This comment from the head of EA’s Origin digital distribution service was in response to Steam’s sales that it holds regularly. In this comment, DeMartini claimed that such sales devalue the games and trains people to only buy cheap games. Perhaps this comment was a prophetic statement of sorts, because EA is now recognizing the reality of cheap games.
In a recent interview with the folks at MCV, another EA exec, Nick Earl, stated that people are making the switch to free games and there is no stopping it.
The future is not about one-time payments, the future is about freemium. A decent number of people convert to paying and they may not pay a lot but most of them actually pay more than you’d think.
I don’t know if freemium gets to console but I do know that humans like free stuff. I also know humans who will pay for something if they’ve tried it out and they like it.
I’ve wondered if freemium expands beyond the tablet, Facebook and smartphones, and out into consoles? I don’t think it’s impossible for that to happen.
It is actually quite refreshing to see someone in a large game studio willing to accept this fact, something that his counter parts in publishing are incapable of doing. But this is the reality. We have seen it happen in rapid fashion, particularly in the mobile space. Because of the nature of the market, game prices quickly dropped to $1 and then to freemium or free to play. These options allow for potential customers to limit the risk of acquiring a new game. This is also forcing the games industry as a whole to reconsider how it prices its software, which some still seem unwilling to do.
Another interesting thing about this comment is that Nick realizes that it is only a matter of time before free games come to consoles. This is something else we have observed with the recent announcement of the Ouya console. One of the Ouya’s biggest selling points is that all games available for it must offer some form of free option, something not currently available on any current console. This idea and the low cost of the console itself led to a huge positive reaction from the gaming community, shooting the Ouya into record breaking pledges on the first day. So yes, people are shifting to free games.
As the market for games shift toward cheap and free options, it will be interesting to see what the current console leaders do in response. Will they all follow Nintendo’s lead and continue on the course of “premium” prices for console games, or will they recognize that there are more ways to make money from gaming than retail sales? If they do continue down the premium path, they are quite liable to be left far behind when the market shifts. Something that EA seems to be preparing itself for.
