EA has decided to restructure its local German contracts and phase out the sale of physical copies of games in Germany, Austria and Switzerland.
FIFA 23 and Need For Speed Unbound will be among the last games to box in German-speaking countries. Starting in May 2022, EA will "no longer generate sales of packaged products" in Germany, Austria and Switzerland, it explained in a statement shared by Games Wirtschaft (opens in a new tab). This decision was made shortly after EA decided to stop selling physical copies of the games from their internal Origins store.
This decision did not fall from heaven. EA said in its annual report (opens in a new tab) that "the continued shift from physical goods to digital downloads continues to negatively impact revenue development." The drop in physical copies sold is visible at all levels. In the United States, the sale of physical copies fell from 80% of total copies sold in 2009 to 17% in 2018.
Looking ahead, EA says it needed to get out of physical sales to avoid the financial loss caused by selling physical products in a market that didn't want them. "The company's ability to develop and support digital products and services" is top of mind for EA, according to its annual financial report.
not the first
EA isn't the only publisher wanting to downgrade its distribution of physical games. Activision Blizzard dissolved its German subsidiary in May, with business operations ending in March 2021. While all Germany-based staff have been made redundant, publishing operations are controlled from Activision Blizzard's European headquarters in London.
As digital sales steadily increased, Activision Blizzard's local physical sales in Germany increased from €55 million ($55,1 million / GBP 47,7 million / A$85,5 million) in 2018. to €35 million ($35,1 million / GBP 30,4 million / A$54,5 million) by 2020. With digital sales replacing physical sales, a localized approach to sales and marketing becomes it has become increasingly redundant. As a result, regional headquarters like the one in Germany have become less advantageous for selling products.
Auf Wiedersehen
This may be the beginning of the end for the sale of physical video games; Over the past decade, across the gaming industry, we've seen publishers report a shift from primarily physical to digital sales. Decisions by EA and Activision Blizzard to pull out of Germany and reduce their focus on physical copies may be the first major examples of a move away from boxed games, with other publishers following suit in other regions.
However, we may also see a rise in physical collector's editions and limited editions, such as The Force Unleashed Special Edition produced by Limited Run Games.
As fewer people buy physical copies, publishers will have less incentive to sell them and thus be able to follow in EA's footsteps. While it may annoy fans of physical video games or dedicated collectors, I have a feeling this ball won't stop rolling.