EA to stop releasing physical games in german-speaking countries (EA denies allegation)

[Xando]

Quick translation:

One of the largest game manufacturers is in a similar situation: Electronic Arts. EA bestsellers include the FIFA, Battlefield, F1, Madden, Apex Legends and The Sims series. With FIFA Ultimate Team trading card packs alone, the listed US group generated more than 1.6 billion dollars last year.

The European EA locations are now facing profound changes. Electronic Arts GmbH, based in Cologne's Rheinauhafen, employs around 100 people who, in addition to the German market, also look after Austria, Switzerland and Scandinavia.

EA Deutschland's latest annual report states: "The ongoing shift from physical goods to digital downloads continues to have a negative impact on sales development. Revenue from digital downloads is not processed through EA, but through an affiliate."

Therefore, an "economic restructuring" was initiated: Local customer contracts had already been terminated in May 2022 - after the restructuring, Electronic Arts will "no longer generate sales with packaged goods" in German-speaking countries. As a result, EA already expects a "significant decline in sales" in the current 2022/23 financial year.

Provisions in the tens of millions were made on the balance sheet, both for staff and for take-back obligations and discounts. However, the German Electronic Arts headquarters in Cologne should be retained – also because many EA games are localized (i.e. translated and synchronized) there.

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Electronic Arts verkauft weiterhin Games auf Datenträgern (Update) - GamesWirtschaft.de

Auch nach dem Ende des Vertriebs physischer Games durch die Electronic Arts GmbH will EA weiterhin Computerspiele auf Datenträgern anbieten.

www.gameswirtschaft.de

 

[plow]

Cool, will probably never buy an EA game again then.

 

[Linus815]

thats gonna sting, 80 euro games on consoles, at least with physical you can usually find more decent pricing

 

[VegiHam]

Warum?

 

[Raigor]

Not even FIFA or F1 games?

 

[HellofaMouse]

ea continues to be the worst

 

[Pankratous]

So it begins. Expect to see more and more stories like this over the next few years.

 

[Shortiloe]

Guess they lost a "from time to time"-Player.

I also sometimes payed fullprice at launch for BF-Games.

 

[raspberrymousse]

Had to happen at some point, wonder how quickly all the other publishers will follow

 

[Xando]

Not even FIFA or F1 games?

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Doesn't sound like it "After the restructuring there will be no more revenue with packaged goods in the german-speaking area".

 

[jawzpause]

Everyone is slowly going to do this eventually. Peak for people that like to trade games

 

[djplaeskool]

Yeah. Companies are going to look at the physical-digital split and eventually just say, "Fuck it."

 

[Raigor]

Doesn't sound like it "After the restructuring there will be no more revenue with packaged goods in the german-speaking area".

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Yes, ITT Switch and NFS Unbound are going to be the last EA games sold on retail in DACH.

I wonder if they'll do the same for BENELUX, France, Italy, Spain etc...

 

[wrowa]

I think this only means that the EA GmbH will cease the release of physical games in favor of EA proper contracting a cheaper distribution company like Plaion/Kochmedia.

 

[Patitoloco]

That's quite enormous.

 

[Xando]

Yes, ITT Switch and NFS Unbound are going to be the last EA games sold on retail in DACH.

I wonder if they'll do the same for BENELUX, France, Italy, Spain etc...

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Since EA germany also handles scandinavia they're probably next

 

[Raigor]

I think this only means that the EA GmbH will cease the release of physical games in favor of EA proper contracting a cheaper distribution company like Plaion/Kochmedia.

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Oh right, that's what Activision Blizzard is doing for Europe, Koch Media is distribuiting all their games.

https://www.archyworldys.com/koch-media-and-activision-blizzard-announce-distribution-agreement/

 

[St. Elmo's Fire]

What the fuck?
Well this means I won't ever buy a EA game again. Cool I guess...

 

[Ahti]

Welcome to the future. :-/

 

[TanookiTom]

Worth pointing out that the article mentions how the revenue from digital sales usually is processed through affiliates in tax-havens such as Luxemburg, so companies like EA will further be able to reduce the taxes they pay, while players and consumers get nothing but the negatives. Great move.

 

[u_neek]

That huge age rating sticker got too expensive to print.

 

[Raigor]

Worth pointing out that the article mentions how the revenue from digital sales usually is processed through affiliates in tax-havens such as Luxemburg, so companies like EA will further be able to reduce the taxes they pay, while players and consumers get nothing but the negatives. Great move.

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EA Swiss s.a.r.l handles all the digital transactions in EU afaik

 

[cw_sasuke]

Thats one way to force people to go digital.

 

[tiebreaker]

Wild Hearts digital only then?

 

[Lemony1984]

"The ongoing shift from physical goods to digital downloads continues to have a negative impact on sales development."

What does this mean?

 

[Boogolo]

I wonder if the move to a mainly digital future would push one of the console manufacturers or someone like steam to create a second hand digital store? You list your game and the license is transferred with the store and publisher splitting something like a 10% fee? Doubt they would want to but it would be popular with quite a few people

 

[Hans Gruber]

Isn't it still going to be pretty easy to just buy from another EU store? At least for now.

Are there any laws against retailers selling grey imports? Or do they legally have to have that German age rating on the box?

 

[AHA-Lambda]

It starts

 

[Theorry]

Hope they dont think we speak German in the Netherlands. :P
You never know with a US company haha

 

[tandeciarz]

If we ever stop physical releases I guess consoles are over for me.

 

[Stef]

Wild Hearts digital only then?

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Does it even make sense to purchase such kind of game in a physical format?

 

[Pokémon]

Fuck the digital only future with inflated prices.

 

[Ogni-XR21]

"The ongoing shift from physical goods to digital downloads continues to have a negative impact on sales development."

What does this mean?

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I never thought of that, but since the digital sales are usually made by some spinoff company in Luxembourg or by the main company where the publisher is from, it greatly reduces the money the local branches make. So even though many people in Germany play EA games, the German branch does not make any money from the digital sales.

 

[th1nk]

No Dead Space physical? 🧐 That might have been the only EA I bought since FIFA 98.

 

[NekoNeko]

oh no....

anyway

 

[tiebreaker]

Does it even make sense to purchase such kind of game in a physical format?

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Yes.

 

[Fady]

EA can really set some poor practices at times.

 

[Yeona]

I mean, CAPCOM's latest fiscal year report shows that 91,5% of all of their game sales were digital (page 10).

That's just the way everything is going. So long as ownership is protected under some description with caveats to DRM, I don't see a problem of moving away from physical, even if that's how I prefer to collect my games.

 

[Ferrs]

I mean, CAPCOM's latest fiscal year report shows that 91,5% of all of their game sales were digital (page 10).

That's just the way everything is going. So long as ownership is protected under some description with caveats to DRM, I don't see a problem of moving away from physical, even if that's how I prefer to collect my games.

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Well it's a problem for my pocket. Digital only means mandatory day one 80€ games (probably 90€ next gen) instead of getting them cheaper physical.

 

[Lemony1984]

I never thought of that, but since the digital sales are usually made by some spinoff company in Luxembourg or by the main company where the publisher is from, it greatly reduces the money the local branches make. So even though many people in Germany play EA games, the German branch does not make any money from the digital sales.

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So if they aren't making money off digital sales, why are they killing physical?

If they aren't making money off either that seems worse?

 

[Yesterzine]

So it begins. Expect to see more and more stories like this over the next few years.

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Oh yeah, this is absolutely the start of the avalanche. Much like, random example, 1 company removing a headphone socket from phones was.

The companies want physical gone, this makes it easier.

 

[Sidewinder]

So if they aren't making money off digital sales, why are they killing physical?

If they aren't making money off either that seems worse?

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Local branches lose sales/money but EA as a whole earns more this way, at least that's probably what they think.

 

[Dizzy Ukulele]

Maybe we'll end up with Limited Run Games getting the rights to physical releases for the sports titles and those games becoming collectible. What a timeline that would be.

 

[Ogni-XR21]

So if they aren't making money off digital sales, why are they killing physical?

If they aren't making money off either that seems worse?

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I guess it's simply not cost effective when you sell most games digitally anyway. As the article states, they started re-structuring and this will probably end with many jobs being cut at those local branches. The article brings up the example of Activision Bilzzard that simply ended up closing the German branch completely.

 

[TheBlackSwordsman]

Just like that?

I find this quite scary, tbh. I don't want a digital-only future! I like owning my things!

Seriously, this is terrible for game preservation and I can't see how consumers are going to benefit from this in any way. I really hope they don't intend to do the same with the rest of Europe.

 

[Cali32]

No Dead Space physical? 🧐 That might have been the only EA I bought since FIFA 98.

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There is a physical release for the Dead Space remake,. It's up for preoder at amazon and at most gaming retailers, etc. (at least that's the case in my region - I live in EU)

 

[hydrophilic attack]

if they actually stop releasing physical games entirely, sales will drop quite a lot for mainstream games like fifa

 

[Cali32]

I mean, CAPCOM's latest fiscal year report shows that 91,5% of all of their game sales were digital (page 10).

That's just the way everything is going. So long as ownership is protected under some description with caveats to DRM, I don't see a problem of moving away from physical, even if that's how I prefer to collect my games.

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They do mention that this high digital ratio is due to the Sunbreak DLC being available through digital stores only.

 

[StraySheep]

From the translation I really don't understand what they are getting at.

I mean, CAPCOM's latest fiscal year report shows that 91,5% of all of their game sales were digital (page 10).

That's just the way everything is going. So long as ownership is protected under some description with caveats to DRM, I don't see a problem of moving away from physical, even if that's how I prefer to collect my games.

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Everyone always misreads these numbers. When companies report on this stuff they always including DLC and microtransactions (in this case probably just DLC because of units sold). There is no way the split is 90% digital for copies of games sold that are available physically.

 

[Xando]

"The ongoing shift from physical goods to digital downloads continues to have a negative impact on sales development."

What does this mean?

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Physical games count as revenue to EA Germany. Digital games are counted as revenue for EA Luxembourg so they have to pay less taxes.

If there are no physical games EA germany doesn't get any revenue