EA Head Says Industry Needs New Business Model >

	2007/10/31 16:41:55: Posted by DM
	According to EO CEO John Riccitiello, the entire gaming industry needs a new business model. Speaking to the Berkeley Haas School of Business, he predicted that the current business model will become obsolete very soon, within the next decade. It is common sense, for sure, but how much can we change, and how fast can we change it? "In the next five years, we're all going to have to deal with this," he said. "In China, they're giving games away for free. >Link
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The ultimate solution is to eventually create a business model where games are downloaded to consoles in the same way that Xbox Live Arcade games are downloaded to the Xbox 360. This would eliminate software piracy This would also reduce the cost of games, since the logistics costs of shipping to retailers would be gone, and wholesalers and retailers would no longer need to receive a markup in price in order to earn money. Those steps could be skipped, which would literally allow the prices of games to be reduced quite a bit.

Obviously, EA is concerned with China because they are the most populated country in the world--a HUGE potential market for videogames. However, China doesn't have the strict economic trade regulations that North America has.

The other major problem at this point in time is that High-Speed Internet access is not available in most of the world. In fact, there are many places in the United States where it is not available.

Hopefully, within the next five to ten years, all of North America, Europe, and most of Asia will receive high-speed Internet access. When that happens the majority of games, if not all, will be downloaded online...perhaps to one console that all software makers use.