Mitch Lasky, a former senior exec at EA, has pulled up EA boss John Riccitiello on what he says is a "bankrupt strategy".
Lasky starts off saying recent EA financial shortfalls "could hardly have come as a surprise". He goes on: "While Activision was setting sales records with Call of Duty: Modern Warfare 2, EA had no major hits.
"EA's sports business has been hamstrung by vastly increased licensing costs and failure to transition to a subscription/variable pricing model. This has substantially reduced the profitability of a business that EA used to rely on to fund other, riskier bets," added Lasky.
"But by far the greatest failure of Riccitiello's strategy has been the EA Games division. JR bet his tenure on EA's ability to 'grow their way through the transition' to digital/online with hit packaged goods titles," he went on to say.
"It's been a very ugly scene, indeed. From Spore, to Dead Space, to Mirror's Edge, to Need for Speed: Undercover, it's been one expensive commercial disappointment for EA Games after another. Not to mention the shut-down of Pandemic, half of the justification for EA's $850MM acquisition of Bioware-Pandemic. And don't think that Dante's Inferno, or Knights of the Old Republic, is going to make it all better. It's a bankrupt strategy."
Pulling no punches, Lasky went on to say: "With EA's enterprise value down below $4 billion, it's remarkable that nobody has stepped in to put them out of their misery with an acquisition," citing Disney and Chinese companies like TenCent that could "swallow EA whole".
"It's equally amazing that the board continues to support the existing management team through this debacle. Since JR took over, the company has destroyed over $11 billion in market value." Ouch.
This is especially interesting reading, given the amount of good will (and good games) EA has created for itself since employing the so-called 'bankrupt strategy'.
It's as if wanting to make good games = failure, while wanting to rip people off = success & profit!
You can't blame EA for not moving to a subscription/variable based model on their sports games. I don't know many people who will actually use that service, or even how it would work.
Secondly, Riccitiello has said numerous times recently that EA want to reduce the number of releases, but still maintain quality. Quality over quantity is the old adage, right? Activision on the other hand publishes anything and is facing somewhat of a backlash in recent months.
And as for Pandemic being half of the justification for the $850 million acquisition of Bioware and Pandemic, is he having a laugh? Bioware were probably 75% of the justification of that.
Me thinks someone covets another persons job. I agree with BattleMoose87 that most of the money went to purcase Bioware.
And how would a subscribtion fifa work 10c a play? I presume it would be something like updating the teams after the transfer windows. How muc would that really bring in and who would pay. I know where I would tell them to go.
Dead Space was good and as a new IP how bad did it do?
Ricitello has done a great job with EA and I hope he continues his current strategy. The only thing I judge harshly is the closure of Pandemic, which was a great studio.
This guy seems like an older Bobby Kotick. Which means that he seems like an older version of Satan.
I think EA have handled FIFA amazingly well in recent years. They took onboard criticism and changed the product to meet, and arguably exceed, customer's expectations.
And to boot, the gameplay has improved by a large enough margin to justify rebuying the game for the last 2 years. What more do they expect? They've also added extra DLC such as the Live Season updates as an extra revenue stream.
Dead Space and Mirror's Edge were both critical successes which hopefully means more people will take notice of the sequels, as the general public prefer to buy products they have heard about rather than new IPs. At least EA aren't resting on their laurels and rehashing old games and franchises.
Come to think of it, EA are probably my favourite major publisher at the moment. EA, I salute you!
Quality over quantity is the key here, something EA has admitted to. Aside from EA's sports games, there's nothing else they produce I'm remotely interested in. And this is simply due to the fact of the poor production value on their other titles. EA has a simple choice to survive. Specialise on selected quality games, or continue creating a broad market of mediocre generic games that do not sell. When I see an EA logo on a game box, I think twice. I do not associate EA with quality... however, they do spit out a rare gem now and then, Dead Space for example. I'm a fan of Fifa also. The problem with EA is.. EA. It's too big and too corporate.
So basically, by turning the company from a money grabbing, yearly update machine into a genuinely brilliant publisher with a huge portfolio of this generations top games (FIFA, Dead Space, Burnout, Battlefield, Skate to name a few) Ricitello should be on borrowed time?
Utter crap. EA are my favourite publisher and have been for the last 18 months. Consistently good, and creating new IP's that are critically acclaimed, they should be applauded for dragging themselves out of the gutter that Activision now inhabit. Yes, Activision are making huge profits, but that gravy train is going to reach it's last stop soon, you can't keep flogging a dead horse with impunity. Eventually those series, CoD, GH etc will become so tainted the whole brand will be a bust.
Sadly shareholders don't give a flying **** for quality over quantity. All they want to see is healthy returns on the money they invested. If that can be done Ricitello's way then fine. If not they will demand a change. A change that will closely follow the Activision template, which it's self seems like EAs way of working from a few years back.
I think EA have a fair few games coming in the next few Quarters that should sell very well. While it be enough to change the shareholders opinion of the current strategy?
Haven't EA already tried this subscription based system, with the FIFA Live Season for updates?
Activision wants everyone to pay a subscription for Call of Duty. If they have their way you'll be paying a monthly fee for online play on all their games.
Haven't EA already tried this subscription based system, with the FIFA Live Season for updates?
Activision wants everyone to pay a subscription for Call of Duty. If they have their way you'll be paying a monthly fee for online play on all their games.
But who would?
Call of Duty, as good as it is isn't worth the price of the game plus an additional fee, no matter how regular or not. To me Activision can go rot in a hole. Others have deserved less but got much worse.
Gauging from the quoted fellow, he does not appear to have much of an understanding, if any whatsoever, of the actual games side of the business he has invested in. First of all, comparing any current game to the recent sales success (note: just the financial success; as a game "MW2" is hardly setting the games world on fire) of "MW2" is bound to disappoint. Secondly, this attitude of his only goes to underscore my initial claim that he doesn't understand the actual human side of the market he is in. He may understand the financial figures, but he may find that EA will suffer far more over a longer period of time if it simply churns out garbage, incomplete and under supported titles. If EA does a 180 and returns to how it operated a few years ago my support for them will probably do a 180 as well.
Yes, given the market they are in his views appear to be based purely on monetary gain. I doubt SCE or MGS exec's would hold the same views, if they did games like Ico or Viva Pinata for instance wouldn't exist. Making a profit is a base need for any business of course, but when you are working in video games you are working in a creative medium which, in the right hands, cares more for innovation and expression, for creating unparralled experiences, than any financial reward. Perhaps there is a reason why he is a former employee as opposed to a current one.
A discussion between a veteran designer-now-big earner and a businessman. Always makes for messy conflicts, because they never understand each other one bit.
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