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 EA chief executive: 'Free-to-play is anything but free'

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PostSubject: EA chief executive: 'Free-to-play is anything but free'   Thu Jul 19, 2012 3:42 pm

The CEO of Electronic Arts has sent a message to investors that its free-to-play business is becoming increasingly lucrative.

EA chief executive John Riccitiello John Riccitiello, who is facing questions over his company's share price falling to a ten-year low, insisted that the move into free-to-play is boosting revenues.

"There's a lot of power in free-to-play," he said.

"And by the way, for what it's worth, free-to-play is anything but free. We have lots of games that are 'free-to-play', where paying users are giving us ten, twenty, thirty dollars a month.

"What happens is the first game play is free, but then when you get into the game you have to pay for things."

Riccitiello framed the issue of free-to-play when answering questions on the flagging sales of Star Wars The Old Republic.

"We indicated in our last earnings call that there was some softness in Star Wars," Riccitiello told CNBC.

"Our conclusion was we had a great product, but the subscription model in a world of free-to-play is challenging. Which is why we announced in July that the first fifteen levels of SWTOR are free-to-play. What's really great about the Star Wars content is that when we expose it to people they really want it."

Electronic Arts has embraced new games industry business models across both social and mobile. It owns two giants in the space, having acquired both PopCap and PlayFish for more than a billion dollars combined.

Elsewhere in the interview, Riccitiello discusses how EA has shifted from a packaged-goods product business to a digital service business.

He also insisted his company's shares have been undervalued due to a misunderstanding of the new complexities of the games business.

"A key factor for us going forward was visibility on next-generation consoles," he added.

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