EA CEO John Riccitiello Steps Down [Updated]

John Riccitiello, CEO of game publisher Electronic Arts, is stepping down from his position. Former EA CEO and board chairman Larry Probst will take over while the board searches for a new replacement, EA said.

Riccitiello, who was first hired as CEO of the massive publisher in 2007, has faced criticism from investors and fans over the past few years as Electronic Arts has gone through all sorts of financial difficulties. In December, Riccitiello was listed as one of "eight CEOS to fire in 2013" by the blog 24/7 Wall Street.

Riccitiello always portrayed the image of an exec who actually plays games. The bosses at Activision or Microsoft wouldn't talk about the games they played, but Riccitiello would happily chat not just about his experiences with EA's own but about the competition's. And if you got him talking about, say, EA's Mirror's Edge, he'd express design ideas about how to make it better.

Here's what EA's stock has looked like since Riccitiello took over in April 2007:

EA's financials took a dive during the recession in 2008 and have not come close to recovering since. The past six months have been particularly rocky for the publisher behind games like Battlefield and Madden.

In 2007, when Riccitiello first took over the company, he divided Electronic Arts into four labels: EA Games, EA Sports, EA Casual and The Sims. Later that year, he oversaw one of EA's biggest acquisitions in the past decade, the purchase of VG Holding Corp, the company that then owned Pandemic Studios and BioWare, the well-respected developers behind role-playing games like Star Wars: Knights of the Old Republic and Mass Effect.

In early 2008, news came out that EA had attempted to purchase Take-Two, the publisher behind Grand Theft Auto. Take-Two rejected EA's bid.

Although EA's sports label has found a great deal of success with the can't-fail Madden NFL series, the publisher has struggled to compete in the realm of basketball over the past few years, failing a few times to relaunch NBA Live, which has not been published since 2009.

Over the course of Riccitiello's tenure, EA took a number of risks on creative games that went outside the company's comfort zone, including Mirror's Edge, Brutal Legend and Spore. They succeeded with some projects — The Simpsons: Tapped Out has been one of the most popular games on iOS — and struggled with others, like Star Wars: The Old Republic, which eventually had to go free-to-play after an unsuccessful launch in late 2011.

EA's most recent misstep was the SimCity debacle.

Here's the full press release announcing Riccitiello's departure, via EA:

REDWOOD CITY, Calif. — (BUSINESS WIRE) — Electronic Arts Inc. (NASDAQ: EA) today announced that John Riccitiello will step down as Chief Executive Officer and as a member of the Board of Directors, effective March 30. The Board has appointed Larry Probst as Executive Chairman to ensure a smooth transition and to lead EA's executive team while the Board conducts a search for a permanent CEO. The Board will consider internal and external candidates with the assistance of a leading executive search firm.

Mr. Probst has played a leadership role at EA since 1991. In addition to serving as Chairman of the Board since 1994, he previously served as the Company's CEO from 1991 to 2007. As CEO, Probst successfully grew the Company's annual revenues from $US175 million to approximately $US3 billion, led EA into new platforms such as mobile, online and other emerging markets and expanded its international presence to more than 75 countries.

"We thank John for his contributions to EA since he was appointed CEO in 2007, especially the passion, dedication and energy he brought to the Company every single day," said Mr. Probst. "John has worked hard to lead the Company through challenging transitions in our industry, and was instrumental in driving our very significant growth in digital revenues. We appreciate John's leadership and the many important strategic initiatives he has driven for the Company. We have mutually agreed that this is the right time for a leadership transition."

On behalf of the Board, Lead Director Richard A. Simonson stated, "As we begin the CEO search, we are fortunate that Larry, who has a proven track record with our employees, partners and customers, has agreed to assume a day-to-day leadership role as Executive Chairman. He has 16 years of experience as CEO of EA and a deep understanding of the Company's strategy, management team, business potential and industry trends."

Mr. Riccitiello stated, "EA is an outstanding company with creative and talented employees, and it has been an honour to serve as the Company's CEO. I am proud of what we have accomplished together, and after six years I feel it is the right time for me pass the baton and let new leadership take the Company into its next phase of innovation and growth. I remain very optimistic about EA's future - there is a world class team driving the Company's transition to the next generation of game consoles."

And here's the letter John Riccitiello sent to EA:

To Everyone at EA –-

I am writing with some tough news. I have resigned my position as EA's CEO. I will be around for a couple of weeks, and I hope to have the chance to say goodbye to many of you. Larry Probst will be stepping in as Executive Chairman to help smooth the transition. Larry first hired me at EA in 1997 and he was an incredible leader for the company during the 16 years he served as CEO. While he will continue to be the Chairman of the US Olympic Committee, he will also provide leadership for EA until a permanent CEO is appointed.

My decision to leave EA is really all about my accountability for the shortcomings in our financial results this year. It currently looks like we will come in at the low end of, or slightly below, the financial guidance we issued to the Street, and we have fallen short of the internal operating plan we set one year ago. And for that, I am 100 percent accountable.

Personally, I think we've never been in a better position as a company. You have made enormous progress in improving product quality. You are now generating more revenue on fewer titles by making EA's games better and bigger. You've navigated a rapidly transforming industry to create a digital business that is now approximately $1.5 billion and growing fast. The big investments you've made in creating EA's own platform are now showing solid returns. I believe EA is alone in mastering the challenges of building a platform for our games and services – a platform that will provide a more direct relationship with our consumers. You are number one in the fastest growing segment, mobile, with incredible games like The Simpsons: Tapped Out, Real Racing 3, Bejeweled, SCRABBLE and Plants v. Zombies. You have worked to put EA in a position to capture industry leadership on the next generation of consoles; and I believe two of our titles – Battlefield and FIFA – will be among the top few franchises in the entire industry. And the industry's most talented management team – Frank, Rajat, Peter, Gaby, Andrew, Patrick, Blake, Joel and Jeff — are certain to lead the company to a successful future.

I remain an incredible fan of EA and everyone who works in our world – from Stockholm to Seoul, Orlando to Edmonton, Guildford, Geneva, Cologne, Lyon, Bucharest, Montreal, Austin, Salt Lake, LA and, of course, EARS. My hope is that my travels and yours allow us the opportunity to talk more in the months and years to come.

In a few weeks, I will be leaving EA physically. But I will never leave emotionally. I am so incredibly proud of all the great things you have done, and it has been my honor to lead this team these past six years. After March, I will be cheering wildly for EA from the sidelines.

John


Comments

    There was no way he was going to be safe after The Old Republic...

    The huge investment in PopCap and the ongoing PR issues (MoH, SimCity, Most evil company in America) probably melted the ice.

    The share price hasn't really rebounded since, what, 2009?

    Last edited 19/03/13 8:21 am

      That's true, but also the same of many games companies.

      Check out the video about it - http://www.youtube.com/watch?v=XZxXEidtxHk

    ALL-NEW CEO DLC AVAILABLE 21/03 FOR SEASON PASS HOLDERS!

    Wow that share price dropped like a skrillex dubstep remix

    They need to bring back the Borg Queen. If you're going to assimilate studios, do it right and get a professional.

    Anyways, he's not quitting, he's just going free-to-work.

      *slow clap*

      Bravo, well played sir.

    Sadly I know people are happy he's wrong, but when one dictator leaves another one is sure to follow. More likely be worse than the last one. Because the new guy has to make up the money EA "lost" out on. Only thing that Riccitiello did that I liked was Mirror's Edge and Dead Space. Publishers refused to take risks at the time and even though Mirror's Edge wasn't the best game, at least it was something new. Same for Dead Space. It was like what RE5 should have been. Oh well, let's see what the next 6 years brings with EA.

      Sadly, I know people are happy he's *gone*, but when one dictator leaves another one is sure to follow.

      Sorry for typo.

    maybe now they will begin putting games back on steam? unlikely...
    The share price has tanked for a number of reasons and I reckon one of them was not putting games on steam due to steam very tiny tiny rule that all dlc needs to be on steam which would mean more sales.

    also it would be nice to see more OLDER games on steam on gog. e.g. NFS series that would be one way to make some additional mullah.

    Oh and of course more games where players can host the servers whereby EA can't kill off a game just because it kill the servers. (ill exclude any sports sims e.g. NFL, Soccer, etc due it changing every year however the servers should be up for at least 3 years).

      The major problem with releasing games like NFS on GOG is the licensed vehicles, rereleasing a game with a licensed property would require a new license contract and would be prohibitively expensive

      kp!?!?!

    While Riccitiello seemed like good news for the industry when he was first appointed, I think this can only be good. Lets just hope the next guy is a little bit wiser, and is able to think about the long term future and not just the immediate share price.

    We could see somebody just as bad, or worse, or maybe, just maybe, we might see EA restore their relationship with Valve and Steam, and we might see them rethinking their strategy of buying out successful companies and then burning them to the ground in the pursuit of a quick buck. We can only hope.

      as much as I like this thought, it is really unlikely to happen. The best to hope for is a new CEO who negotiates contract goals on improving the companies standing in the industry to the end consumer.

      Otherwise, I can not see anything improving. He's leaving a really healthy company except for its perception in the dedicated gamer market.

        While I agree that it is really unlikely to happen, I wouldn't call EA a healthy company. Its share price tanked in 2008 and it has never been able to recover since then, resorting to shutting down a huge list of the studios it acquired and laying off thousands of employees. Its CEO just fell on his sword due to their share price, which has risen slightly in the last few months but is still a shadow of its former self, and there are no signs that it will recover if EA continues on its current trajectory - due in no small part to its perception in the dedicated gamer market.

        From an outside observer, it seems incredibly sensible for EA to make an effort to make its customers happy again and protect long term profits. But, as you say, this probably won't happen since the executives at the top aren't on the outside and are driven only by short term profit. At least for now, there is one less executive.

    The new CEO really needs to work on restoring their image and relationship with the core gaming market. I loved the way EA started off this generation, putting out some great new IP (Mirror's Edge, Dead Space) as well as some great new versions of old ones (Burnout Paradise). And along the way they've still done some great games like NFS Hot Pursuit, the Battlefields, etc.

    But more and more they've just started to blatantly treat their customers as cash cows, and their recent comments about microtransations were a classic case of a company telling their customers what they want, not listening to what they want (or, in this case, don't want).

    You can't have a successful business if the market hates you. That'll be especially true in the next 1-2 years as we transition to the new consoles, since it's generally the core gamers who get into that at launch, and right now the core gamers hate them. Being the number 1 company on iOS or Facebook or whatever won't do them much good when it comes to selling AAA games on PS4 or XBox-whatever.

      Reminds me of this Riccitiello quote: "When you are six hours into playing Battlefield and you run out of ammo in your clip, and we ask you for a dollar to reload, you're really not very price sensitive at that point in time.... We're not gouging, but we're charging..."

      Totally agree, I think company's like EA have failed to recognise that the mobile market and the console / PC 'full-price' market are two completely different demographics and they are just not going to function as one solitary 'one size fits all' business model (micro-transactions, online-only etc across the board).

      All that stuff has done is destroy the fan base that was willing to buy and be a part of those now tainted products and ip’s. If you have a hit and a large customer-base willing to put up the cash for a product, the last thing you want to do is reward that customer loyalty by serving up something that they hate and is not on par with quality or expectations.

    I don't think they'll be getting a new CEO any time soon. The EA brand is absolutely toxic. Riccitiello has left it a smoldering ruin with the constant controversies and ridiculous sales forecasts during his time there. I honestly don't think anyone would want to touch it with a 10 foot pole, seeing the shit he pulled over the past few years.

    Does this mean Crysis 3 for Wii U could be a reality now?

    Interesting when he talks about bigger better games and people are upset about some of the big releases like Mass Effect 3, Dead Space 3, SW:KotoR MMO, SimCity.

    I have a friend who told me EA are trying to charge the Subscribers for content despite the fact they promised Subscribers wouldn't have to pay for it.

      Well that's the reason I boycott EA now. I bought Battlefield 3 then they stopped running their own servers for online matches and started running their Premium servers.

        I forgot BF3, It seems like every EA game released lately is under done. Like a month or two more and it would have been so sweet.

          Isn't that their philosophy towards games these days? 5 years ago, they'd make a game, sell it, we'd play, fun was had. Now, they make a game, strip much of the regular features and make them accessible only though microtransactions or via overpriced dlc. If you buy a game now, it's merely a shell. Look at Battlefield FTP. It's an updated BF2, minus most of the weapons/equipment options which you now have to pay for, most of which have time limits. So ultimately, rent stuff. Even though BF-FTP was a free download, it was testing the waters to see what they could get away with for BF3.

          ...and if they're now charging to play on their servers as @Bangers is saying, wehehehell... they can politely go fornicate themselves with an iron rod, IMHO. That's a nasty, greedy, unwelcome (from a consumer's p.o.v.) precedent to set.

          Last edited 20/03/13 9:43 am

    I wonder if this is going to change anything. In the end, it's about business and things like their stance on online DRM isn't going to stop if their board believes that it's a good deterrant for piracy. No one wants to invest in EA at the moment because they know it's a business that they will most likely lose money on. They're gonna have to pull some fancy moves if they want their stocks to grow again. They need to get back to the basics - improve their image. Who knows, maybe we'll go back to hating activision first and ea second again.

    IT'S HAPPENING

    WE WILL MISS YOU JOHN PIZZARONI

      If I could upvote this, I would.

    Came across this. http://i.imgur.com/bRkUGb0.jpg

    This is what happens when you have brilliant ideas like the "Your mother hates Dead Space 2" commercial. You treat your customers as basement kids, you mock them with silly sexual motifs, you try to milk them like cash cows, and you even change distribution platforms mid-series (ME1 and ME2 are on Steam, ME3 is not? Good riddance, EA!).

    Day 1 content DLCs are another thing that EA pushed too far, and we, the gamers, DO remember.

    Absolutely no sympathy whatsoever.

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