Electronic Arts saw crazy profits in South Korea over the past two years from distributing its FIFA soccer title online for free, then charging an average of $1.60 per transaction for character clothing and accessories. Now EA has announced it will release a free online version of Battlefield Heroes in the U.S. and Europe this summer. If it proves successful, more titles will follow. Unfortunately, in addition to micro-transactions EA will also include in-game advertising to support the business model. Suddenly we’re picturing a surreal NASCAR battlefield… hey, that sounds like a new game idea! Pay up, EA!
EA resorted to online distribution in South Korea in part to combat rampant piracy, which BusinessWeek claims drove sales down from 250,000 in 2002 to only 10,000 in 2006. The new online version of FIFA soccer has been raking in an average of $1 million per month, “almost twice what it earned in its peak year of retail sales in 2002,” and is harder to pirate.
One analyst has this choice description of the business model:
It is like giving every little girl a Barbie doll that is naked and hoping she will accessorize. While you can still play with a naked Barbie, it is not as much fun as dressing her up.
“EA Leaps into Free Video Games” [BusinessWeek]