On Tuesday, Electronic Arts (ERTS) unveiled an annual online subscription program designed to give gamers a three-day jump on new video game sports titles before they hit the stores, driving more game disc sales. But while EA is banking on scoring more revenue with this program, it may backfire in the end.
Under its EA SPORTS Season Ticket program, gamers pay a $24.99 annual subscription to access a digital download of five EA Sports titles before the video games make their way to retail stores. The catch? Gamers can only play each title for three days.
The program aims to not only drive subscription revenues to EA's piggybank, but also spur players to buy full, unlocked retail copies of the game after their trial run expires. But some gamers are already snickering at the notion of downloading a game for only three days of access, ribbing the company that it may take that long just to download the game.
However, EA could face an even bigger potential problem: What if gamers get a taste of the company's latest offering -- and it's a bust?
Thanks for the Freebie, But No Thanks
For very little money, gamers can test-drive Madden NFL 12, or future games in the Madden NFL football, NHL hockey, FIFA soccer, Tiger Woods PGA Tour golf, and NCAA football franchises.
If they find they don't like the game, they'll only be out $5, instead of more than $60 a pop to buy the game sight unseen. GameStop (GME), which is EA's exclusive retail partner for the Season Ticket program, doesn't allow consumers to get a refund once they've opened a new game. Instead, customers can trade in the disc for either in-store credit or a lesser amount of cash.
But Edward Williams, a BMO Capital Markets analyst, says that while EA will likely lose some business with this program, it will more likely gain more incremental sales than it'll lose. He noted that EA's benefit will largely come from exposing die-hard fans of one sport -- say, NFL Football -- to another of its sporting games like FIFA Soccer.
"The average EA sports buyer purchases 1.4 games a year on average," Williams says. "This may get them to buy two or three."
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Motley Fool contributor Dawn Kawamoto does not hold any shares in the companies mentioned. She has been known, however, to pick up a joystick and play a game of video baseball. The Motley Fool owns shares of GameStop.