Pachter Says Boxed Games Will Outshine Digital In 2011

Following news that EA’s CEO John Riccitiello claims digital will overtake boxed games in 2011, analyst Michael Pachter has told IncGamers he believes digital won’t be more than 50 per cent of boxed revenue this year.
Yesterday, EA’s boss Riccitiello said that digital will overtake boxed product in 2011, adding that China is an area he is particularly excited about.
Commenting on this, Michael Pachter told IncGamers: “Even if he’s counting Steam and DLC, we’re talking about another $1 – 2 billion at most in digital revenues, so all of digital is around $11 – 12 billion.  The packaged goods business is still north of $21 billion, so “digital” was around a third of the total in 2010. 
“I don’t know if Mr. Riccitiello is counting something else, but it would take a doubling of the digital revenues I listed to get to over 50% in 2011.  I see all of these revenue streams growing, but not doubling, in 2011.  Digital (as I have defined it) probably grows to $14 – 15 billion, and packaged goods probably hits $23 billion, so still not more than 50%.”
Patchter said he puzzled by Riccitiello’s comments on China, adding: “I presume he’s including all of Asia, which has been a largely closed market to EA, so I’m not sure why he views expansion of digital in China in particular as such a tremendous opportunity.”