It’s on the books, people: EA CEO John Ricitiello is out. The #2 publisher isn’t going to hit its numbers for the quarter and has been underperforming for some time, even as it endures a hailstorm of ongoing negative press. In his memo to employees, Ricitiello takes the high road, assuming all the blame for EA’s revenue problems and stating unequivocally that the buck stops with him. I respect that, and I’ve always had at least some respect for John Ricitiello. He may not have been God’s gift to CEOs, but there’ve been worse in this industry; the truth is EA’s suffering can’t all be laid at his door – though the culture that allowed it probably can.
A few months ago, a large poll awarded EA the dubious (and sort of bizarre) distinction of “worst company in America.” The publisher beat Bank of America by thousands of votes. At the time, EA rightly laughed off the award, remarking that companies like BP, Halliburton, and Philip Morris – all of them former Worst Company winners – weren’t nominated that year. Reading between the lines is where you’ll find what EA’s clever spokespeople were actually trying to say: seriously? A video game company? Spend some time in Bhopal or El Salvador sweatshops. Visit a Foxconn plant. You expect this to bother us? If you voted for EA then you have no idea what real corporate greed is capable of.
And it was a good response. EA is a dumb company with poor customer service and a very shaky track record, but “worst?” even “evil” is reaching.
Ricitiello’s been in trouble for a while now, ever since the financial returns on Mirror’s Edge and Dead Space, both titles that returned modest sums but needed to be blockbusters to justify the publisher’s continued support of new and (in the case of Mirror’s Edge) somewhat avant-garde IP. At the time the publisher slashed jobs and announced it was transitioning back to the more tried and true business model of releasing terrible franchise rehashes and endless sequels.
Since then it’s been on a steady course, with a handful of business and PR blow ups here and there – the Mass Effect 3 ending fiasco was directed more at Bioware than EA and didn’t cost any money; the catastrophic but not unexpected failure of The Old Republic MMO doubtless eviscerated the publisher’s bottom line. And these past few weeks there’s been the Sim City release, an event that you’d have to be kind to describe as a fiasco. EA and Maxis have been caught lying repeatedly, and in the past few days they’ve just stopped answering the phone as increasingly damning evidence of their malfeasance comes to light.
But in the end, I don’t think Ricitiello quit because of Sim City, or The Old Republic, or any other single thing. I think he’s stepping down because as CEO, it’s his responsibility to deliver on the wishes of the shareholders, and EA has failed to do that under his management. It’s business.
The truth is that John Ricitiello isn’t that bad a guy. He tried to take EA in a direction that would differentiate it from Activision/Blizzard, to develop a stable of new IPs and new concepts while trying to support existing successful properties. That gamers didn’t buy those new IPs is not entirely his fault. Meanwhile, quality of life issues at EA studios have improved significantly since the EA_Spouse controversy, and the publisher owns some very valuable properties that it will be able to continue to capitalize on. Ricitiello’s departure is a sign that the video games industry still has a lot of problems, and that those problems are widespread – gamers are as guilty as corporate bosses for the issues we see.
What matters now is who will be chosen to replace him, and what that new leader will do to get EA back on track. While I’d like to believe that EA’s board of directors will show foresight and choose an out of the box risk-taker who’s more passionate about restoring fan loyalty than about selling more Madden games, that’s probably a pipe dream. The shareholders are much more likely to bring in a corporate mouth-whore of the Bobby Kotick/Thomas Tippl/Larry Probst variety, because those people will create the short-term illusion of generating stability and revenue while consistently poisoning the well of customer faith. And shareholders care less about doing the right thing than they do about making out big on their stock options.
Farewell, John Ricitiello. You were a man, taken for all in all; you had plenty of flaws and made tons of mistakes, but among all your weaknesses there were positive traits. It’s too bad that those traits weren’t enough to stave off EA’s current fate. I admire that you did the right thing and took the blame. You’re the CEO, you should. Here’s to hoping you leave behind a company that’s smarter than it was when you started. But I have my doubts.
Send an email to the author of this post at steerpike@tap-repeatedly.com.
Great article Mike! Very even handed and fair.
I’ve played EA games all my life, and I’ve enjoyed them. Tho it seems that the business of video games had given itself a black eye of late, and EA is one of the bigger culprits (tho to be fair, it is one of the bigger companies too. Kind of an easy target…)
EA, like a few other companies, has a lot of goodwill to rebuild… the next CEO SHOULD know this… Fences need to be mended with its customers. Potential customers need to NOT look like walking bags of money to these companies. Make people happy, and you’ll make money. Hopefully the notion of pleasing customers = making money can be brought back to bear. I hope that’s not TOO ‘after school special’ of me, but what can I say? I love this industry.
Thanks Steerpike. I figured you’d have something to say about this – it’s a pretty big deal.
I don’t think corporate greed is the problem. I think EA is simply too big. And for a company that big and, arguably, that slow on its feet, anything but “more of the same for the lowest common denominator” just isn’t going to work.
I also don’t think shareholders don’t care about doing the right thing. I think they simply have no idea what the right thing is. Or perhaps a better way to state it is that “the right thing” for EA (as the company it is now) to remain successful has nothing to do with what people such as Tap readers would consider “the right thing” in terms of making good games. That’s not to say that this can’t change, but that would mean EA becoming something fundamentally different that what it is today.
Would you elaborate a bit more on what role you think gamers play in the problems with the industry?
Thanks all.
To answer your question, Botch, I blame gamers for what’s arguably the most significant problem the industry has: they buy games.
Gamers are historically terrible at voting with their wallets, which is the only way to drive out bad corporate practices like bug-ridden releases and always-on DRM. Sure, that it’s impossible to return games in today’s environment is part of the problem, but gamers are guilty of getting excited about the product and buying it, often sight unseen, even under circumstances when the game shouldn’t be supported.
The world knew about Sim City’s DRM, even if it didn’t know how ruined the launch would be. Yet gamers pre-ordered in droves and bought in more droves on Day Zero. If they’d been able to keep their wallets in their pants for Sim City and dozens of other “bad” products, presumably the publishers would learn through economic attrition that mistreating the customer base comes with consequences.
I’m as guilty as the next guy, of course. I pre-order. I storm and rage about games prior to launch then buy them anyway.
Our love of the medium causes us to perpetuate this anti-consumer system, so gamers have no one but themselves to blame.
Well, themselves and Bobby Kotick, he’s always up for a good blaming. Been strangely quiet recently, though.
SHHHH!!! Don’t speak his name – you’ll wake him!!
Ha ha that first sentence made me chuckle. Quit buying games people! You feral swine!
Seriously though, you’re right. You can’t expect corporations to behave differently if the consumers don’t force the issue.
I’ve pre-ordered one game in my life: Halo 2. After that monumental disappointment (I loath Halo 2) I swore I’d never do it again, and I haven’t. Do I have a stronger will than the vast majority? Maybe. But there are other factors, not the least of which is price. Even for games I know I’ll like (yes, even my beloved Dark Souls) I’m rarely willing to pay on release day.
Is it bad that I take some minor pride in sitting out Diablo 3 completely in protest to the whole always-online DRM thing? I don’t feel like I’m missing much now, hindsight being 20/20, but before the game came out that felt like a big sacrifice.
But yeah. I’m a big proponent of the “vote with your dollars” philosophy, but the unfortunate problem with this is that it tends to work only to outline when marketing’s gone wrong. Take Halo as an example: Halo 2‘s sales, initially, were not based on Halo 2, its content, its design, its anything, but on Halo‘s. Those sales reflect the success of the previous game. In some ways, so do Halo 3‘s, because then it’s both the people who liked Halo 2 fine and the people who, like Botch, didn’t, but hope that maybe they got it right this time. Meanwhile, sales of new IP don’t often gauge so much the content of the game – we’ve seen plenty of great games over the years fall by the wayside because of lackluster sales – but the success or failure of the marketing campaign.
Of course, the problem is that we don’t tend to try before we buy, and it would be pay after we’ve played. Movies have the same problem, I suppose, although at least in that case you can always support the ones you like by picking up the DVD (or not in the opposite case) when it comes out.
I remember when ActiBlizz were charging 10 whatevers extra on release for… Modern Warfare 2? Black Ops? I’m not sure, but gamers everywhere were up in arms about it. I thought to myself, well, if they can charge that much and people still buy it in droves, then why the fuck not? It sold like hot cakes. Honestly, I think a lot of gamers are cotten-headed ninny muggins with no integrity or self-control so they repeatedly end up in situations that piss them off. Overpriced, DRM-laden, pay-to-win, microtransaction-rich pieces of shit containing DLC-shaped holes and people still go out and buy them whilst moaning about it.
Good for you, Dix. You’re certainly not missing a lot with Diablo 3. I like it enough, it’s essentially as good as Diablo 2 with some drawbacks (always online) and some advantages (much better overall design) but at the end of the day I could live without it.
I was a modest fan of Starcraft and its expansion, but when I heard how Starcraft 2 would be released I didn’t like it. Yes, I’ve heard that both parts released so far are essentially full games unto themselves, but I still don’t like their release plan and so I’m voting with my wallet and planning to buy the inevitable $29.99 SC2 trilogy pack that will probably come out in 2016.
Also Steerpike, one note on your article: I think it is arguable that the ME3 ending thing didn’t cost actual dollars. I don’t think EA planned to let BioWare release 5 multiplayer DLCs all for free; and certainly the free Extended Cut took development hours and that certainly wasn’t planned. It’s almost irrefutable that the “fiasco” certainly did cost EA/BioWare real dollars. If the day 1 DLC “From Ashes” had been free and the Extended Cut content in the original ending (i.e. EA gave BioWare another 6-8 weeks of development time) I think they could have released the first multiplayer DLC for free and charged maybe 5-10 bucks for the other four. Profit forgone! But no. When will the big guys learn?
Admission of guilt: I’ve never pre-ordered a game from a physical store, but I did “pre-order” Bioshock Infinite about 5 hours before it came out yesterday. But come on, I got a free copy of the new X-Com for doing so!
I agree with Xtal, Dix. It is definitely NOT bad.
I have to make a confession: I bought Halo 3. At or near full price. I guess I was in the “I hope they get it right this time” camp. Wrong again. But perhaps more importantly, my wife actually consents to play Halo coop with me. She was the one who wanted me to get the third one (she thinks Master Chief is a romantic character, and I can relate to a degree). And I wasn’t about to pass up the chance for some couch coop with my better half just because I wasn’t particularly crazy about the game.
Seems the higher-ups are dropping like flies.