Electronic Arts is trying to adapt to the new digital landscape — that's the message CEO John Riccitiello sent loud and clear at the company's E3 presentation from the Orpheum theater in downtown Los Angeles.
Riccitiello says the industry has become a round-the-clock service rather than a punctuation of products occasionally shipping. Part of EA's big challenge is the consumer's shift to omnipresent social and mobile games. So EA is going to where the consumers are, launching Madden Social, which works across Facebook and smartphones. Start the game on Facebook and finish it on your iPhone — it's cross platform. And the game is free.
COO Peter Moore explained that one goal is to convert some of the massive fans of NFL to go out and buy a $60 game. But thanks to the sale of virtual goods to advance your game play, EA will make money even if people don't go out and buy the software.
Moore also re-cast EA Sports Football Club as "football's social network." The idea is that FIFA is already a social network for fans of the sport, now EA will enable fans to connect to their FIFA experiences on any device, at any time, and to connect to each other. The goal is to get fans to play more and longer.
With the whole video game industry suffering, EA is making a big push to go after the hard core gamers who are still purchasing games, to ensure that if consumers are buying one or two fewer games this year, that their games don't suffer. The core for hard-core gamers are first-person shooter games, and EA presented four of them in its press conference.
And in a move to revive its online game "Star Wars: The Old Republic" it will offer part of the game for free, to lure new players. After the game lost 400,000 subscribers in the fourth quarter this is a bold move to show Wall Street that the massive investment can yield long-term subscription revenue.
EA is also going after subscription revenue with the launch of "Battlefield 3 Premium" a $50-a-year subscription program for the game's 13 million fans. Though the upgrades and game packs are available individually, they're discounted if purchased as part of this subscription —and if the deal works, EA gets a consistent revenue stream. EA's COO Peter Moore says the plan is to turn individual software sales, into the ongoing sale of services.
-By CNBC's Julia Boorstin
Follow Julia Boorstin on Twitter: @JBoorstin
Julia Boorstin will be reporting on all the E3 announcements starting with Microsoft’s press conference Monday morning. Check back here for the latest.