EA’s New Focus on Virtual Goods Explained, Even as Primary Evangelist Departs

Effective today, John Pleasants is the former COO of Electronic Arts. In a move which came around unexpectedly just this afternoon, Pleasants was named CEO of social game maker Playdom. However, prior to his departure, he was stumping for EA and the company's upcoming plan to rely more heavily on digital direct-to-consumer initiatives including digital game sales and in-game sales of virtual goods. The goal, according to Pleasants: Generate at least $500 million in new revenue for EA this year. This strategy was laid out in a recent interview with paidContent.org. As it happens, that interview would be his last as an employee of Electronic Arts. But most likely, EA's digital goods strategy will live on, even after his exit is complete.

Before his daparture, Pleasants stated that he considered EA to be in "investment mode" for a transition into a more active role as a publisher of online and social games that monetize through both subscriptions and microtransactions. Among EA's current projects are four different social network games and a service that connects console gameplay feeds to a user's stream of social network information.

Pleasants offered some interesting revenue figures to back up the idea that digital services like virtual goods sales were a future source of profits for EA. He revealed that the Korean version of the freemium game FIFA Online generated $1 million per month in revenue from virtual goods sales. The Chinese version of FIFA Online generated $254,000 in revenue from virtual goods sales in its first four days of operation. He also discussed the prepaid virtual currency cards for use with the microtransaction aspect of The Sims 3 that are currently available in major retail outlets.

Given Pleasants's clear admiration for social gaming as a growth business, it's not surprising to see him move into the space directly as the CEO of one of its most rapidly-growing companies. Likewise, EA has been losing a steady stream of executives to the booming social gaming market, including both Playdom and Zynga. Working in the social gaming sphere now means getting to enjoy the start-up environment and being in early enough to benefit from acquisitions and IPOs that may happen down the line.

Perhaps most importantly, the EA brain drain is a clear indicator of which way the wind is starting to blow in the video game industry. With Playdom rumored to be pulling in $10 million per quarter through virtual currency and goods sales, social gaming is clearly a booming business. The console publishing model that EA once represented is beginning to look increasingly old-fashioned.

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