Things aren’t looking so hot for EA these days. Their stock has gone into a full nosedive since 2007, dropping from share values in the forties and fifties down to a pitiful $11.59 as of the time of this writing. It just so happens it was right around the time of the return of a Mr. John Riccitiello as CEO that this stupendous decline began. Many believe that the company’s current failings are a direct result of the new business models implemented by Riccitiello after his return, and whether or not this is the truth of the matter, it seems he’s very much aware of this public perception – and may even be fearing for his job.
This news comes from electronic analyst Michael Pachter of all people, who recently informed the audience at the Develop Conference that Riccitiello had confided in him over lunch about EA’s ongoing stock woes, apparently clueless about their cause.
“He was asking me why no one wants to buy his stock,” said Pachter. “He doesn’t understand what’s going wrong.”
Pachter suggested that a bad case of Sequelitis was to blame, that EA had gotten stuck in a rut brought about by the console cycle running longer than originally anticipated. Pachter is hardly the first person to make this observation, and as it turns out it might have some merit.
“I thought new consoles were coming out in 2010-2011,” responded Riccitiello. The end of a generation is generally seen as a bad time to bust out the new IP, hence why we’re seeing many developers who came out with new franchises at the beginning of this cycle pushing onward into third or even fourth installments rather than trying something new, or so I’d like to hope.
Though Pachter might not be so off base with his theory, it’s hardly the only factor that may have contributed to EA’s decline. They’ve made a lot of acquisitions that have pissed many a gamer off in recent years. Origins, Westwood, Maxis, Dice, Bullfrog, Criterion, Bioware, Mythic. Many a beloved studio has been snatched up and either dismantled or gutted to be reshaped into an efficient machine for putting out yearly or biyearly iterations of series that have a history of high sales. Though the sales numbers remain high, the critical reception of EA’s recent games tend to be all over the place, with the go-to gaming sites tending to say one thing and the general public another thing entirely. This hasn’t stopped EA from touting how awesome and revolutionary they’d like you to think these games are, oftentimes pouring more money into advertising their games than they did actually making them.
Though Riccitiello’s methods have generally produced higher sales from these acquired studios than they had ever been capable of on their own, the breakneck development pace they’ve been forced to work at has resulted in sloppy releases and the tarnishing of the studios’ reputations and good will they’ve built with their fans. You need only look at the way the Bioware name has been thrown around and slapped on each and every RPG-making studio EA owns to see the damage being done to the brand. Bioware Austin, Bioware Mythic, Bioware Edmonton, Bioware Victory, Bioware Sacramento, Bioware San Francisco… it’s an absolute joke. EA will slap the name of the once world-renowned studio everywhere they can in the hope of using its old reputation to boost sales. They may regret this decision when it gets to the point of the Bioware name doing more harm than good, a point they’ve seemingly been trying their damndest to reach.
John Riccitiello’s time at EA is undoubtedly coming to an end. Shareholders have seen the value of the company they’ve taken a stake in drop to less than a fourth of its former value in just five years, all under Riccitiello’s watch. Six months, maybe a year from now, he’ll be gone, it’s a near certainty. Whether or not EA will manage to recover from the damage they’ve sustained is less certain. Will they downsize to the very basics, keeping their most profitable studios and scrapping the rest? Will they split into a number of smaller companies to prevent their stock collapsing entirely? Will another, healthier industry giant choose to snatch them up when the price is to their liking? Who can say? But after seeing the decisions EA has made this generation and the way they’ve treated some of my former favorite developers, it’s hard to feel much sympathy for either them OR Riccitiello. Good riddance.