Despite Rise In Game Quality, EA Boss Faces Fierce Doubts

If gamers most care about whether games are any good - not whether stock prices are rising - then what to make of calls for EA chief's ouster?

FIFA was better last year. Left 4 Dead was good. Dragon Age was an acclaimed role playing game standout. Even little-selling Dead Space Extraction on the Wii was a critical star on a platform that has so few.

Yet just months after those EA games wrapped up the company's 2009 and just weeks before promising releases of Mass Effect 2 and Battlefield Bad Company 2, Electronic Arts, a former factory of mediocrity, is facing public calls for regime change.

On Monday EA announced that it was lowering its forecast for annual revenue, from $US3.9 billion to $US3.675billion, blaming a tough gaming market and gaming costs.

On Tuesday, financial analysts were sounding the call for change in a news story that reported that EA's stock price has dropped 70 per cent during Riccitiello's tenure, from $US52 in 2007 to $US16.25 on Tuesday. (It's at $US17.11 right now.) Oft-quoted Wedbush Securities analyst Michael Pachter told Reuters that EA's current management had "zero credibility" with investors and predicted that the top execs at EA wouldn't last another year if the company's financial well being wasn't turned around. Analyst Arvin Bhatia of Sterne, Agee & Leach said "some drastic action" is needed.

The irony for gamers, however, is that, in these tumultuous years, EA's games have gotten better. Not settling for anecdotal evidence or EA's own claims about that, we crunched some numbers on game quality last year, and, well, those who believe game quality can be judged by review scores would have to concede that, yes, EA's right and greatly outperforming the likes of Activision and Take-Two in game quality.

What is at stake in all this is the job of John Riccitiello, EA's CEO for the last three years, and a man who has preached the value of game quality as the essential ingredient not just for keeping games happy but for making money.

Riccitiello has espoused such values directly to Kotaku. In December he maintained his pride in EA's transformation under his leadership into a publisher that was putting out lots of quality games: "I think a pattern EA went on [in the past]and I think other companies are following right now is the trend of while you're milking your cash cows and nothing else, it's a very profitable business. While you're doing that it feels really good and [Wall]Street loves you. I think EA got into that position in the last cycle. I think other companies are in that position now. I've lived through both ends of that. And one of those reasons I spend so much time talking about quality and innovation is I don't think it's an end goal. I think it's a pursuit that doesn't stop."

With broad and a not completely fairly applied brush, Riccitiello's EA has been portrayed as the anti-Activision and, less controversially, the anti-old-EA. In other words, it has been cheered as a gaming behemoth that might not be noble enough to help little old ladies across the street or refrain from shutting down studios from EA Chicago to Pandemic (the latter was just too expensive, Riccitiello had told us), but is one that that has embraced the creation of new games and has pushed harder for innovation in its sequels, while expanding aggressively to the iPhone, Facebook and other new platforms. Riccitiello himself has been an unusual character, not just because he so feverishly promotes the idea of game quality but because he can talk the talk of game design better than most gaming executives. (See his Mirror's Edge chat with us.)

EA bristles at the doubts the analysts have about the Riccitiello regime, of course. "The industry is in the middle of what is arguably the biggest transition of its 35 year history," Jeff Brown, EA's director of corporate communications told Kotaku. "We feel that we've got precisely the right strategy. It's just not one that translates to immediate results in every quarter." Brown called the analysts' critiques "very short-sighted" and maintains that the company will continue to emphasise game quality and invest heavily in a transition to an increasingly digital-based gaming industry (read: less of a business reliant on the sale of discs).

The heat on EA's top brass puts gamers in an odd position. Ignore the goings on of executives and eager stockholders? Or focus on a conundrum that, as game quality has gone up, a major publisher's stock has fallen and maybe, just maybe the CEO in charge when both happened could be in jeopardy.


    One of the problems here is that shareholders are more or less short sighted by nature. They buy and sell. They are there when they feel they should be and they get out when they feel it will be profitable. What they want to see are dividends every quarter. This requires the kind of game development that pushes unfinished or underwhelming products out the door in order to meet the quarterly release dates and prop up short term profits.

    The people working in the upper echelons of the company are in it for the long haul. They have made a career out of being a part of the company and by the looks of it, the people in charge now really do care about making great games, not just making great sales.

    Companies like Blizzard and Valve follow the same philosophy, but they are comparitively small (not so much Blizzard anymore. They are now massive), making it much easier.

    Regardless of size, it has been shown by guys like Blizzard and Valve that taking the time, money and energy required to find motivated people who love what they do and to make something not only worth making, but worth playing and ultimately worth buying will pay off in the long run.

    EA are on the right track and I want to shake Riccitiello for having the balls to make the tough decision and pushing the company on the track that leads to long term success and a healthier industry as a whole.

    So nice that the didn't describe what the stock price was in during the middle of those three years, just the 2007 games boom stock price and the 2009 recession stock price. Anyone got the real figures here? On whether improving game quality really does hamper profitability?

      There we go: Heh, inline with the recession. So when did EA start making better games? Funnilly enough EA's stock soared 8 months after Ricci started. More evidence that financial analysts should never be listened to...

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