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EA: 'We Believe Games Are Healthy, Particularly Where EA Leads'

Despite the much-publicized difficulties facing the retail market for video games, Electronic Arts says it sees the overall market as being strong -- especially in a worldwide context that includes digital revenues.
Despite the much-publicized difficulties facing the retail market for video games, Electronic Arts says it sees the overall market as being strong -- especially in a worldwide context that includes digital revenues. "We believe games are healthy, particularly where EA leads, including on high definition consoles and digital," said EA COO John Schappert in an analyst conference call this week following the company's strong quarterly results. Schappert was making reference to claims that, this year, EA has held a 22 percent share on Xbox 360 and PlayStation 3, the top among game publishers, and that it expects digital revenue to be up 30 percent to $750 million this year. Half of EA's digital revenue comes from PC games -- the other half is split between console-based downloadable content and mobile games -- and EA says it holds 33 percent of the PC market, another industry high. Of course, competitor Activision Blizzard just released its PC blockbuster StarCraft II, meaning EA's market share on PC is likely to drop in the next quarter. And while EA says it's ahead of other "Western third-party publishers" in Wii market share, it is less well represented on that platform. That's where Schappert drew a comparison to the areas of the market where "EA leads" -- its own Wii share might not be the strongest, but the Wii software market is also down 13 percent year over year, in contrast to a 21 percent boost in software for the HD consoles. Still, EA thinks it will take some time before it can take the lead in one game segment that's a major player on HD consoles and PC: the first-person shooter. The company hopes to gain ground this holiday with EALA and DICE's Medal of Honor, but CEO John Riccitiello thinks that's just the first step. "I think we've got a shot on getting back into the leadership position in the next few years...in the FPS space," he said on the call, "and we're looking to make a strong positive share gain this year." "I don't expect to topple either Halo or [Call of Duty] this year," he added.

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