14 DAY TRIAL // Electronic Arts is the focus of attention for both analysts and gamers as 2008 is closing. The publisher, which is already facing stiff competition from Activision Blizzard and Ubisoft, has seen worse than expected results in the last month, deciding to lay off more than 1,000 people, about 10% of its workforce, while also closing down or consolidating a lot of studios, including Need for Speed: Undercover developer Black Box. New intellectual properties like Dead Space, a space based horror shooter, and Mirror's Edge, the free running DICE developed title, have failed to make the impact that the company had hoped for.
Some analysts believe that the recent news shows how the publisher missed the start of this console cycle and needs to rethink its strategy in order to create successful titles. Doug Creutz, who is an analyst for the Cowen Group, said that “The company continues to struggle to deliver quality improvements where they are most urgently needed. We believe much of the blame for this goes to prior management, which failed to incubate new hit franchises heading into this cycle and let aging franchises decline. Instead, dollars were spent on what were largely low-return projects.”
The biggest chance for Electronic Arts to hit it big in the short term is to create a real successful MMO with The Old Republic, the Star Wars based massive multiplayer title developed together by LucasArts and BioWare. The game, with its setting and potential fan base, could be a significant competitor to the Blizzard published and created World of Warcraft.
Creutz added that “Aside from EA Sports and The Sims, EA really has a stable full of modestly-performing titles, with none offering the type of mega-hit R&D leverage offered by competing titles such as Call of Duty, Grand Theft Auto, or Assassin’s Creed.”
The company announced that the recent “focus on quality” strategy would continue to be implemented and that those titles not meeting expectations would be canceled while still in development. Even established franchises can face extinction if they do not attract big sales and positive reviews.