14 DAY TRIAL // We know that the end of 2009 was a bad time to be involved with the production part of the gaming industry, and we also know that Electronic Arts suffered a lot during the past month of the year. The company had to fire over 1,500 employees and even shut down Pandemic Studios altogether. And while we'd hesitate to point any accusing fingers at EA for this mess, it looks like there is at least one person out there that's a lot bolder than us. According to Mitch Lasky, a former senior exec at EA, the publisher's current boss, John Riccitiello, is responsible for the company's current standing.
According to him, the economical hardships of the company "could hardly have come as a surprise. While Activision was setting sales records with Call of Duty: Modern Warfare 2, EA had no major hits." We beg to differ, and would like to remind him that Dragon Age: Origins is one of the best RPGs ever made. Still, from here on out we pretty much have to take his word for it, as he talks about the inner workings of the company.
"EA's sports business has been hamstrung by vastly increased licensing costs and failure to transition to a subscription/variable pricing model," Lasky added. "This has substantially reduced the profitability of a business that EA used to rely on to fund other, riskier bets. But by far the greatest failure of Riccitiello's strategy has been the EA Games division. JR bet his tenure on EA's ability to 'grow their way through the transition' to digital/online with hit packaged goods titles."
The rest of the picture that Lasky paints is a pretty grim one, and he seems rather hostile towards Riccitiello. Whether he's unhappy about being a "former" EA exec, or if it's just hard for him to sit by and watch as the company trudges through the mud, he does deliver a powerful blow to the company's current management.
"It's been a very ugly scene, indeed. From Spore, to Dead Space, to Mirror's Edge, to Need for Speed: Undercover, it's been one expensive commercial disappointment for EA Games after another," he explained. "Not to mention the shut-down of Pandemic, half of the justification for EA's $850MM acquisition of Bioware-Pandemic. And don't think that Dante's Inferno, or Knights of the Old Republic, is going to make it all better. It's a bankrupt strategy."
As a final word of warning, Lasky warns the EA that, in its current condition, the publisher could suffer the karma's bitter vengeance, and, as Pandemic disappeared, so could EA. "With EA's enterprise value down below $4 billion, it's remarkable that nobody has stepped in to put them out of their misery with an acquisition," claiming that Disney or Chinese companies like TenCent could "swallow EA whole."
His closing argument is a direct attack at the company's peak, especially at Riccitiello. "It's equally amazing that the board continues to support the existing management team through this debacle. Since JR took over, the company has destroyed over $11 billion in market value." Now, that is a lot of money.