Poor EA. Just as the publisher, long-reviled as a frumious monsterporation of creativity-gobbling soul-holery, was beginning to recover its tarnished rep among gamers and industry, it gets walloped by losses for its trouble. $391 million in losses last quarter, plans to slash another 1,500 employees – this time from Pandemic, Maxis (!), Tiburon, Mythic, Black Box, and the internal Command & Conquer team – along with about a dozen titles on the current slate. All this is, to be honest, punishment for CEO John Ricitiello’s recent efforts to turn the company around and make it into a place that’s at least a little more supportive of new ideas, new IP, and healthy working conditions.
24 months ago EA would have been described as a “megapublisher,” back when we were naive enough to think that game companies couldn’t get much bigger, richer, or more powerful. Then Activision, in a sort of hideous reverse mitosis, engulfed Vivendi Entertainment, which included the storied Sierra On-Line and, of course, Blizzard. Total cost: something like a bazillion dollars; the result was the true megapublisher, like the wicked megacorps of bad sci-fi; the mighty Activision/Blizzard, headed by the Snidely Whiplash of the videogames industry, the deservedly-maligned Bobby Kotick who will, heaven willing, die in a fire, after which his soul will be shredded by a million slavering demons before being rejected as too toxic for Hell by Satan himself and left to haunt the world in shattered fragments of pure negative energy.
Wait, where was I going with this?
Oh, yes! Back in the day, EA was famous for terrible working conditions, poor quality assurance, rejection of new or innovative IP, and general stay-the-courseism of regular sequels and sports franchises. But the backlash against the company, particularly inside the industry, was really incredible… and CEO Ricitiello, not exactly a paragon himself, seemed genuinely moved by it. He supported the acquisition of some new studios, allowed some intriguing (if not altogether successful) new IPs like Dead Space and Mirror’s Edge, reformed (sort of) the company’s Quality of Life policies, and declared that his company was No Longer Evil. Meanwhile, Kotick’s Activision/Blizzard eagerly slimed its way into the position once held by EA: eliminating quality of life, establishing a culture of fear among developers, canceling all but one new IP (the uninspiring-looking Singularity from the hugely inept Raven Software) and ditching several promising in-the-works games.
Result? Activision’s doing okay, weathering the current economic maelstrom, while EA loses almost half a billion dollars and cuts its workforce by more than 25% in less than one year. And at Monday’s shareholder conference call, Ricitiello made it clear that his company was abandoning its brave new focus and returning to the philosophy of stagnant IP, lots of sequels, tired sports franchises, and safe casual games (culminating in the recent $200 million acquisition of Playfish, a fact sure to lend cold comfort to the EA employees about to get the axe).
But really, who’s fault is it? Well… ours. I mean, not ours personally, but gamers’ in general. EA tried innovative new things and they didn’t sell. Of course, it doesn’t help that the company’s also made a few missteps in the last 18 months (i.e., Spore); some expected blockbusters weren’t (i.e., Hellgate London); and we’re naturally not taking into account holiday and post-massacre numbers, which will include three-million-each-easy-sellers like Mass Effect 2 and Dragon Age – both, of course, from BioWare, whose sister studio Pandemic (of Mercenaries fame) is about to get melon-balled. But it does boil down to the fact that EA lost money and if it hadn’t, Ricitiello’s experiment would still be going on.
I’m not going to lecture anyone on their failure to buy Brutal Legend or Madden 1,251,623. EA is still not a very well-run company, depending on The Sims for something like 30% of its revenue and failing to sell to the Core or the Casual marketplaces effectively. But at the same time, you can’t blame the CEO of a publicly-traded company running for cover when a bold new initiative strikes out as spectacularly as this one has. Here’s to hoping that EA is able to find a middle ground.