When John Riccitiello became CEO of Electronic Arts in 2007, the world of gaming looked incredibly different. Activision was the evil publisher, and CEO Bobby Kotick was the face of that evil. Call of Duty had gone from technological achievement that brought in the new generation of gaming to a milked franchise that most of the gaming community would quickly tire of. There was one company, however, that was about to start taking risks in releasing new, unproven franchises. That company was Electronic Arts.
The early years of John Riccitiello’s reign were incredibly favorable. Or at least that’s how I remember them. He was the anti-Kotick, taking chances with new IPs such as Mirror’s Edge, Dead Space, Dante’s Inferno, and Rock Band. When Activision decided to axe Brutal Legend, it was EA who stepped in and helped publish the game. Best of all? Riccitiello himself was a gamer, leading us to think that he’d be able to empathize with his market more than Kotick could. Sadly, that wouldn’t turn out to be the case.
But we have to remember one thing: EA has to answer to their shareholders and investors; this is the dangers of a publisher being a publically traded company. After the Great Recession, those investors weren’t too happy.
Before I continue, I’d like to leave a quote here:
“I think, generally, our strategy has been to focus… on the products that have those attributes and characteristics, the products that we know [that] if we release them today, we'll be working on them 10 years from now.”
Bobby Kotick said that while on a conference call, talking about passing on certain titles after the Activision/Blizzard merger. While it’s a gigantic punch in the face for gamers, it’s an incredibly sound business strategy. And, as much as I hate to say it, video games are a business and publishers want to make money. (Yes, that means Valve too.) So while the gaming community was tired of seeing the same old every year from Activision, the publisher was at least making money from the dedicated fans of Call of Duty.
Meanwhile, over at EA, they were taking chances with those new IPs I mentioned earlier. In theory, a breath of fresh air can be a fantastic thing for gamers, but it’s generally not a very sound business strategy. If you look at a list of games released by both publishers, it turns out that Electronic Arts was taking more risks with new IPs. In fact, it’s not even that close of a comparison. The Saboteur, Bulletstorm, Kingdoms of Amalur: Reckoning, Warhammer Online, not to mention the games I’ve already listed—all of these were incredibly risky endeavors. And history tells us that not all of these games were profitable.
Herein lies the biggest issue with Riccitiello’s departure. The company isn’t profitable and is hovering over $20 a share. The reasoning for his resignation is that he hasn’t done enough to help improved EA’s bottom line. So what happens when a CEO is put in place that will ensure their bottom line succeeds? Will we get NBA Live games rushed out the door despite their bugs because people will buy them anyway? Will this be the end of EA trying new IPs that didn’t work and instead putting money into things that are guaranteed to sell? Only time will tell.
I’m not saying that Electronic Arts is perfect. But they’re better than a lot of people give them credit for. I’m afraid that when the next EA CEO is announced, we’ll be stuck with yearly releases of the same old low-risk franchises. And that would be absolutely awful for gaming.
Date: March 21, 2013