Electronic Arts (EA) has come under fire for many issues throughout its history. One of the major criticisms of EA involved swallowing up smaller game developers such as Maxis (creator of SimCity and The Sims) and Westwood (creator of the Command & Conquer series). After acquiring these franchises, EA released games in these series that suffered from quality issues. Now, due to missing its quarterly expectations, CEO John Riccitiello has resigned, ending a six-year tenure as the head of one of the biggest game publishers in the world. Riccitiello, who is also a member of the Board of Directors, will resign that position as well. These resignations are effective on March 30.
“This is a tough decision, but it all comes down to accountability,” Riccitiello wrote. “The progress EA has made on transitioning to digital games and services is something I’m extremely proud of. However, it currently looks like we will come in at the low end of, or slightly below, the financial guidance we issued in January, and we have fallen short of the internal operating plan we set one year ago.” He also wrote, “EA’s shareholders and employees expect better and I am accountable for the miss.”
EA and Riccitiello attempted to make the shift to mobile and social gaming that has largely been the norm for the past few years, but many key executives jumped ship and joined social and mobile game developer Zynga, which sparked a legal battle that was settled just last month. If you have a lot of game requests on Facebook or if you send many of them yourself, these games might have been made by Zynga, which include FarmVille and Words with Friends.
EA also tried to cut down on the number of games that were released each year under Riccitiello’s watch, which didn’t necessarily pan out. The recent installment of SimCity was just one of the latest EA releases that critics universally panned, namely because of the “always online” approach that is being criticized by many gamers.
“One is always caught off guard by these changes, but it wasn’t a big surprise,” said Colin Sebastian, a video game analyst with Robert W. Baird. “The stock has lagged, there’s been lots of turnover of management and noticeable issues with the games.” Other analysts also had something to say about Riccitiello’s departure. “This is an industry with a very tough sales environment. You really have to execute, and these guys haven’t done that in terms of game quality,” said Eric Wilson, an analyst with Pacific Crest.
Riccitiello will be replaced by former CEO Larry Probst as executive chairman to lead the video game publisher while it seeks a permanent replacement. The company said it would consider both internal and external candidates.
“We thank John for his contributions to EA since he was appointed CEO in 2007, especially the passion, dedication and energy he brought to the company every single day,” said Probst. “John has worked hard to lead the company through challenging transitions in our industry, and was instrumental in driving our very significant growth in digital revenues.”