Electronic Arts CEO Facing Trouble

Andy Chalk

One Flag, One Fleet, One Cat
Nov 12, 2002
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Electronic Arts CEO Facing Trouble


Analysts say Electronic Arts [http://www.ea.com] CEO John Riccitiello is running out of time to turn things around at the beleaguered publisher and could be looking at losing his job if things don't change soon.

Since taking over as chief executive of EA in 2007, Riccitiello has presided over a precipitous drop in the company's fortunes. Stock value has plunged roughly 70 percent since he took the reins and earlier this week EA reduced [http://www.escapistmagazine.com/news/view/97404-EA-Comeback-Taking-Longer-Than-Expected] its fiscal year financial guidance for 2009, the second year in a row it's been forced to do so. In the wake of that announcement, the company's share price fell another eight percent and analysts are now suggesting that Riccitiello could be facing the axe if he doesn't make things happen quickly.

"Anytime you underperform, you should be worried about your job," said Janco Partners [http://www.janco.com/] analyst Mike Hickey. "An inability to execute on his performance objectives this year could put him at risk."

Things are tough for the industry as a whole but EA's continuing slide is especially pronounced when compared to the performance of its primary competitors. Shares in THQ [http://www.activision.com] managed to post an increase of eight percent.

The current EA management team has "zero credibility," according to Wedbush Morgan [http://www.wedbush.com/] analyst Michael Pachter. "Investors feel betrayed, and the comment I got most from investors today is, 'They don't seem to care about investors'," he said. "This management team is running out of room to underperform. I think investor tolerance is gone... They don't get another year to turn around."

Riccitiello maintained an optimistic outlook during the call to investors this week, saying, "I think we've made good progress - in fact, very good progress. Our view of the sector has been proven right, and we've done a good job of executing the right strategies." But it's impossible to ignore the fact that EA was trading at $52 per share when he took over as CEO and today is mired around the $17 mark. That's not the sort of performance that investors are inclined to reward.

The irony for gamers is that after years of excoriating the company for destroying studios and churning out lackluster, cookie-cutter crap, Riccitiello appeared to "get the message" not long after he took over: He claimed to dislike heavy-handed DRM, promised that the company would make a greater effort to create new and better titles (and then actually delivered on that promise) and even appeared to take an enlightened view toward piracy. Yet it's the unabashedly profit-driven Bobby Kotick at Activision [http://www.activision.com] who's riding high these days, while EA continues to flounder.

I'm pretty sure there's a lesson to be learned in there somewhere.

Source: Reuters [http://www.reuters.com/article/idUSTRE60B59C20100112]


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Jared

The British Paladin
Jul 14, 2009
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The Rockerfly said:
No EA keep making new and interesting titles, please don't go the way of Activision
Yeah ; ; It seems everyon is getting intro trouble now...soon all will be left is EA, and we all know what that would mean ><
 

Ranooth

BEHIND YOU!!
Mar 26, 2008
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Andy Chalk said:
Yet it's the unabashedly profit-driven Bobby Kotick at Activision [http://www.activision.com] who's riding high these days, while EA continues to flounder.
Thats because Activision are now more eviler then Skeletor and Megatron.
 

Nutcase

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Dec 3, 2008
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Andy Chalk said:
Riccitiello appeared to "get the message" not long after he took over: He claimed to dislike heavy-handed DRM, promised that the company would make a greater effort to create new and better titles (and then actually delivered on that promise) and even appeared to take an enlightened view toward piracy.
Emphasis on "appeared" and "claimed". Riccitiello is the one who said on an interview that the people (then) complaining about the DRM on Spore are pirates.
 

The Rockerfly

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Dec 31, 2008
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Jaredin said:
The Rockerfly said:
No EA keep making new and interesting titles, please don't go the way of Activision
Yeah ; ; It seems everyon is getting intro trouble now...soon all will be left is EA, and we all know what that would mean ><
Yeah it would be...Odd to see such a large company fall when video gaming is so popular

Journeythroughhell said:
The Rockerfly said:
No EA keep making new and interesting titles, please don't go the way of Activision
It's Activision who originally went the way of EA.
EA repented and they are cool now though, I mean look at their game releases; Mirrors Edge, Dead Space, Dantes Inferno, Mass Effect, Dragon Age and Brutal Legend. Granted they also make The Sims, the sports games that Journeythroughhell loves and Need for Speed every damn year but they pay for new and original games to be made
 

Kollega

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Jun 5, 2009
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Wasn't he originally responsible for Westwood Studios' critical existence failure? I heard so.

But on the other hand, there's Mirror's Edge and Brutal Legend. So he's not that bad anyway.
 

Plinglebob

Team Stupid-Face
Nov 11, 2008
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Sadly, creative and interesting normally means new and unpredictable which is something investors do not like. By trying to keep the fans happy, he has alienated and scared off the money men which is the opposite of Bobby Kotick *spit*. Sadly, this makes Activision the "better" company.
 

JourneyThroughHell

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Sep 21, 2009
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The Rockerfly said:
[
Journeythroughhell said:
The Rockerfly said:
No EA keep making new and interesting titles, please don't go the way of Activision
It's Activision who originally went the way of EA.
EA repented and they are cool now though, I mean look at their game releases; Mirrors Edge, Dead Space, Dantes Inferno, Mass Effect, Dragon Age and Brutal Legend. Granted they also make The Sims , the shit sports game and Ned for Speed every damn year but they pay for new and original games to be made
That's weird, I enjoy the sports games.
 

dochmbi

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Sep 15, 2008
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Yeah EA has been releasing way too many new IPs, they need to make more sequels and not do anything new, that will keep the investors happy.
 

Kenjitsuka

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Sep 10, 2009
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He should just sneak into the Blizzard offices at night and steal their trillion dollar profit schemes :p
 

Bretty

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Jul 15, 2008
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They leveraged themselves on WAR last year and then decimated the support teams within a month of release. Now it isnt all their fault, Mythic got little cock sure of themselves, but this is something that really hurt them.

Not to mention the Whole Spore pirating debacle as pirates pushed back against the overly oppresive DRM.

Then there was the whole economic downturn (of which I was invested at $60 a share) and after a month and a bit watched it slide to $15. This is hardly the CEOs fault. But obviously his performance since then hasnt been great.

I think personally the whole dissolution of Westwood was a HUGE mistake and butchered a cash cow of an IP.
 

Tiamat666

Level 80 Legendary Postlord
Dec 4, 2007
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Andy Chalk said:
Since taking over as chief executive of EA in 2007, Riccitiello has presided over a precipitous drop in the company's fortunes. Stock value has plunged roughly 70 percent since he took the reins
I think almost any companies stock value has plunged roughly 70 percent since 2007. Though most have started to recover.
 
Feb 13, 2008
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Andy Chalk said:
Yet it's the unabashedly profit-driven Bobby Kotick at Activision [http://www.activision.com] who's riding high these days, while EA continues to flounder.

I'm pretty sure there's a lesson to be learned in there somewhere.
When the headline comes that Activision are buying EA, I will cry.
 
Jun 11, 2008
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The Rockerfly said:
No EA keep making new and interesting titles, please don't go the way of Activision
ForgottenPr0digy said:
that has to suck but i do hope EA does keep on making new IPs unlike Activision
I know this sounds bad but I hope EA does a bit of crap titles just to make money to ride out the recession so that when it's over he is still on management. If he is then they will have wiggle room to make new titles. After what Activision has done lately I kinda want their CEO to burn at the cross.
 

LTK_70

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Aug 28, 2009
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Andy Chalk said:
The irony for gamers is that after years of excoriating the company for destroying studios and churning out lackluster, cookie-cutter crap, Riccitiello appeared to "get the message" not long after he took over: He claimed to dislike heavy-handed DRM, promised that the company would make a greater effort to create new and better titles (and then actually delivered on that promise) and even appeared to take an enlightened view toward piracy. Yet it's the unabashedly profit-driven Bobby Kotick at Activision [http://www.activision.com] who's riding high these days, while EA continues to flounder.

I'm pretty sure there's a lesson to be learned in there somewhere.
Maybe that the corporate world is a complete *****? I hope the guy turns out all right, and that his efforts for the gamer community in general have made an impression on other people in the company.
 

Saul B

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Feb 9, 2009
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The Rockerfly said:
No EA keep making new and interesting titles, please don't go the way of Activision
These words don't belong in the same sentence!

/short rant