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EA Shelves Distribution Plans

by Matthew Kato on Feb 09, 2010 at 11:50 AM

It's been a tough few months for Electronic Arts. After downsizing its workforce and canceling some unannounced projects, the company now says it's moving away from distributing externally developed games.

Electronic Arts has distributed such high-profile games as MTV's Rock Band and Valve's Left 4 Dead 2, but the publisher/developer says that distribution just doesn't pay out as much as internally developed titles. Or, as COO John Schappert put it, "While we have great relationships with our partners, we are modeling a reduction in our distribution business as we concentrate on higher-margin EA-owned titles and digital initiative." There were no Rock Band games listed in EA's recent outlook for the fiscal year, so perhaps this phasing out is already starting.

Companies turn to big publishers like EA for their retail distribution and marketing needs because it's something they either can't or don't want to do themselves.

While EA should take a short term hit (website Gamasutra estimates a $450 million loss in distribution from last year), if this move means EA concentrates more on its own internally developed product, then it could be the right move in the long term.