EA thinks next-gen consoles won’t be backwards compatible

EA CFO says next-gen Xbox and PlayStation will "most likely" not allow for backwards compatibility, and that preowned games have been good for games retail.


EA chief financial officer Blake Jorgensen doesn't think the next generation of consoles are likely to be backwards compatible.

Speaking in San Francisco during a Q&A session for the Goldman Sachs Technology and Internet Conference, Jorgensen said, "An important thing to remember is that next-gen consoles will most likely not be backwards compatible." He added that anyone looking to play multiplayer will "most likely not be able to play with someone on a different generation."

"So if you're a FIFA player, and the soccer season's starting in August, and all your friends are playing FIFA, you're going to want to be on the same box that they're on. So if they all go out and buy a gen-four box if it comes out at Christmas, then you'll most likely do it. If they all hold on and continue to play on third-generation, you'll probably not see that box purchase until after the soccer season is over."

Jorgensen said that he thinks some customers will hold off on upgrading to next gen right away, but that EA is in a decent position regardless. "I think that works for us positively in both ways. It helps us continue to sell gen-three products, and it will help us sell gen-four product as that cycle finally gets into place."

Elsewhere in the call, Jorgensen turned to the current talking point of preowned software--one rumour for the next-gen Xbox says it will require a constant Internet connection and block used software--and calls the used-game market a "double-edged sword" before admitting it creates a beneficial "liquid market" for EA.

"Would we like to sell everything at full price and not have a used game market? Sure," said Jorgensen. "But I think the used game market's a little like any other kind of market where it creates liquidity. The fact is, that liquidity benefits us in some fashion. So if someone goes in and trades in a game, there's a good chance they're going to buy another one of our games. And so if there's a liquid market, I think that that's not a bad thing at all.

"I can't really comment on where the next generation boxes are going to be relative to used games. I will say that the trend in the business is to have that always-on connectivity and connect with a customer, and to the extent that the software identifies a certain customer is going to create some issues going down the road in the used game market. But I do believe that the consumer likes it, and it's been good for the retail channel."

Sony is holding an event on February 20, where it is expected to announce the PlayStation 4.

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"EA thinks next-gen consoles won't be backwards compatible" was posted by Martin Gaston on Wed, 13 Feb 2013 10:13:45 -0800
Filed under: Video Games


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