According to Jason Schreier’ blog, after financial performance failed to meet yearly expectations, EA’s CEO John Riccitiello stepped down on 18th March 2013. EA should put more efforts to adjust to a changing world where consumers are turning to mobile devices and cheap or free games instead of buying expensive packaged titles.

From my point of view, EA Mobile’s pricing strategy is very brilliant.

Electronic Arts uses the freemium pricing model for many of their casual mobile games in order to increase trial before purchase. With this model, consumers can download and play games for free but spends money to buy game props if they want to have a better gaming experience. Since the casual mobile gaming market is highly competitive with a low barrier to entry, this greatly improves the chances of download and trial.  Many games are released on the mobile market every day, with multiple free knock-offs, which creates a challenging environment for developers. Consumers are unlikely to pay for a full version of a product before trying it first, when they can easily download a similar game for free. Although there is a concern that price wars will undermine industry, according to Harvey Elliott, VP and GM of Electronic Arts, unlike its competitors, the company creates quality games that offer a definite value for its consumers. What gamers are seeking is high quality entertainment and recognisable brands such as the franchises that EA offers. While there may not be initial charges associated with EA’s “free” games, microtransactions have proven to be an effective method of gaining revenue, especially in the growing tablet market for females. According to a study of online gamer behavior by PlaySpan, females are almost three times more likely than males to purchase virtual items or content and they outspend males in virtual goods purchases. With casual games, the differences are even greater, with women 40 percent more likely to make purchases from 1st party publishers.

http://kotaku.com/5991181/ea-ceo-john-riccitiello-steps-down

After reading Darren’s blog “Are Boxing Day Deals Really as Special as they are Advertised???”, I have a same feeling that more and more companies are becoming dishonest now. They just play with consumers, give them a fake deal and pretend consumers get a lot of benefits from purchasing.

Compared to this Boxing Day case, what I have met in China is much more tricky. In Shanghai, some shopping mall have similiar events like BOXING DAY at the end of each year. Before the event, companies will secretly raise the price of their products and during the event, give consumers a big discount which they can’t reject. For example, companies raise the price of their products by 20% and give consumers 30% discount. The actual price consumers will pay equals P*1.2*0.7, which is 0.84P. Obviously, consumers will only get 16% actual discount, not what companies promise, 30% discount. However, most of consumers will never pay attention this detail. Companies earn both reputations and sales through this method.

There is another interesting example in China. Some stores are claiming CLOSING SALE all year. Once I passed by a store, the store was announcing by a big speaker “Closing in one month, everything must be gone. Great sales!” Two month later, I passed by this store by accident again, the store was still announcing there “Closing in one month, everything must be gone. Great sales!” I was suddenly lost, how could you play consumers like this? You totally lost your credits. You were cheating.