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