EA lowers suggested retail price for selected titles in the US
Publishing giant Electronic Arts has officially lowered the SRP on a range of its current releases and forthcoming Q4 titles in the US, in an effort to promote sales and remain competitive in the industry's busiest period of the year.
Publishing giant Electronic Arts has officially lowered the SRP on a range of its current releases and forthcoming Q4 titles in the US, in an effort to promote sales and remain competitive in the industry's busiest period of the year.
Numerous titles have seen a drop from USD 49.99 to USD 39.99, whilst some titles are now being sold for USD 29.99 as the pre-Christmas consumer rush kicks in and publishers release their most valuable titles in time for the festive period, accounting for a substantial part of the annual fiscal results.
Games including NBA Live 06, Tiger Woods PGA Tour 06, Marvel Nemesis: Rise of the Imperfects, SSX on Tour and Madden 06 have all seen a cut of approximately ten dollars on the SRP, which analysts at Banc of America Securities attribute to a combination of market conditions, competition and poor sales for selected titles.
Firstly, sales of SSX on Tour and Marvel Nemesis: Rise of the Imperfects have been less significant than EA had anticipated, resulting in the new lower SRP in a bid to stimulate sales in the final quarter.
The company's sports titles continue to see strong competition from rival publishers, and this, combined with a generally slow uptake on the annual iterations of long standing brands such as Tiger Woods and Madden may have contributed to the new SRP. Top selling FIFA 06, which saw three consecutive weeks at the top of the sales chart in the UK alone, remains a full price USD 49.99 title.
The sweeping retail reductions may certainly encourage sales in the final quarter, though the loss per unit could have a significant impact on EA's gross margins. However, analysts predict that the increased retail traffic could aid the firm in reducing its substantial marketing and advertising budget, going some way to counteracting the marginal loss in revenue.
Further titles may be reduced in the coming weeks as publishers strive to capitalise on the holiday spending, though no confirmation on this has been released. In addition, no confirmation on a reduction in retail prices outside of US territories has been announced so far.
The company has recently announced a new digital distribution system, which is similar to Valve Entertainment's popular Steam service and should offer a profitable alternative revenue stream, particularly in light of the imminent next generation console launches that hope to capitalise on the growth of online play and digital download services.