EA Management's Credibility Is "Nonexistant Right Now"

[rditto48801]

EA Management's Credibility Is "Nonexistant Right Now"
News
by Matthew Kato on February 11, 2010 at 11:54 AM



Electronic Arts' management is being slammed after the company recently announced holiday sales which didn't meet expectations. "Management's credibility is nonexistent right now," says Patrick Becker Jr., whose Becker Capital Management holds about a million EA shares.

A Businessweek.com article charts current CEO John Riccitiello's failures and future challenges as the company tries to navigate out of 11 straight quarters of reported losses and a stock price that has declined 68 percent in the same time frame under Riccitiello's watch. According to the article, EA is having trouble as it moves into digital games distribution and other markets such as the free-to-play and social networking spaces. Riccitiello, of course, is more upbeat about the company and his future with it, noting that EA has already made progress on these fronts. "You see a six-foot hole we're in. I'm telling you that we were in a 20-foot hole and we've climbed 14 feet out of it."

According to the article, EA currently generates around 80 percent of its revenue from selling traditional boxed copies of its games at brick-and-mortar retail stores, but that the company faces a challenge in both combating secondhand sales and transitioning to the new frontier of digital gaming without abandoning what is already propping them up. To start the transition, EA purchased social networking games creator Playfish late last year, and it launched the browser-based, free-to-play Tiger Woods online game which makes its money on micro-transactions. A similar FIFA soccer title is also in the works.

EA's current situation isn't just about some of its games not doing as well as it hoped. How companies deal with digital distribution and people's ever-changing tastes in games (and how they experience them) is something that all publishers must figure out for themselves. It will be interesting to see if EA can navigate its way clear of this crisis and how others do or don't follow its lead.

Source
GameInformer.com



I ran across mention of this new after reading "The good, the bad, the ugly" section in issue 204 of Game Informer magazine, I saw mention under "the ugly" that 'EA CEO John Riccitiello is under fire', and a small bit stating that Becker Capital Management had said EA management credibility was "nonexistent right now"
A quick check online turned up the above article on the Game Informer website, which gave more detail into the matter.
It is a very interesting read, and I felt it should be posted here.

(did I do things right for posting news?)

[BlindNero]

Whoa, for a moment i thought it said "Ubisoft's Management's Credibility Is "Nonexistant Right Now".... but we'll have to wait and see.

As for EA, i really don't understand where they're failing, they have some of my favorites (Crysis, Need for Speed, and now Mass Effect 2) but's a billion dollar business, and for stockholders always easy to complain.
Second hand games... i didn't realise it had grown to a serious business too, untill recently i saw a second (new) secondhand games store in my town. So what, secondhand bookstores exist for ages, why is it for games industry such a big problem? I guess it is because there's much much more capital and greed there, hence more risk-taking hence more stockholders with a saying.

[rditto48801]

Yes, EA does have a few good games, but they also have some not so good games, not to mention their tech/customer support seems to be lacking at times, and they seem to not always make good choices.

As the article stated, EA has 80% of their income from boxed games sold in retail stores, and many companies offer stuff via Steam, Impulse, Direct 2 Drive and other services for buying and downloading full games online.
Perhaps that right there has put a little bit of a dent in EA's customer base as many people probably prefer buying and downloading games online rather than buying them in stores. (Personally, I like having an actual case/package, manual and disk).

As for possible problems EA probably has or has caused...

EA sports games.
They apparently have exclusive rights to many things (NBA, NFL, etc). That means no competition. That right there is probably not a good thing. An effective monopoly on sports games for the NFL, NBA, etc. They could have (and probably have) released utter crap, and hard core fans will buy it simply because they have no other options other than a few non-EA college sports games.

Pandemic Studios.
EA bought them out.
Destroy All Humans seems to have been driven into the ground since EA became the publisher.
Mercenaries 2 had all sorts of issues that needed to be fixed. (biggest problem I found, X-Box 360 version, with X-Box Live Gold account, the game WILL lock up and not work unless you have some other EA published X-Box 360 game/demo with online play that can be used to 'register' the gamer tag/X-Box Live account with EA, so Mercenaries 2 will even work with an X-Box Live Gold account, due to, of all things, the game trying to connect to EA servers on startup...)
And then news that EA shut down Pandemic.
I will not be surprised if Mercenaries 3 (or whatever it is called) fails, is crap, gets canceled in general, or otherwise has little in common with what made the original game good.

Sim City Societies.
Still needs fixing, EA apparently won't let the developer Tilted Mill make more patches.

The Sims 3.
All sorts of issues still around, cooking video cards by pushing them far to hard when not even needed, and problems caused by the first expansion pack... and the expansion pack added in new errors because of a new save system that can corrupt game saves... their response overall to constant complaints of troubles? Release a Stuff Pack with new items and fashions... the issues still exist, possibly a few more added... their next response? A second expansion pack is announced, which will probably overhaul the game even more... and probably add in far more issues that will take a long time to get fixed or generally ignored... then there are all the custom content compatibility issues...

Command and Conquer 4.
The 'always need to be online' thing has ticked off a few people (I heard of that before I heard of Ubisoft's new 'always online' DRM, although EA says even dial up will be good enough). Also, aside from the name, setting, some units and key characters... it seems to have little else in common with the series... I want my base building unit building game back, not some sort of apparent capture the flag/capture and hold territory stuff that tosses out the base building/resource gathering in general... Change can be good, but to much change, not so much. Then it will probably just cross into the realm of 'Good as a game, bad as part of the game series they stuck it in'.

So, personally, I think that despite having a few good games, it does not surprise me that EA stocks have lost 68% of their value in almost 3 years time.
And, one final thought.
Corporation: Individual Profit without Individual Responsibility.
What will happen if EA's stock value drops to the point that lots of people decide to start selling off the stock?
Maybe EA just needs to get a new CEO, since the present one seems to be not doing a very good job. (and since it seems at least some people do not like him at all...)