Former Exec Says Electronic Arts "Is In the Wrong Business"
Mitch Lasky was the executive vice president of Mobile and Online at Electronic Arts until leaving the publisher to work at an investment firm. He now has some harsh things to say about how EA has been run over the past several years, in particular criticizing the decisions of CEO John Riccitiello. Quoting:
"EA is in the wrong business, with the wrong cost structure and the wrong team, but somehow they seem to think that it is going to be a smooth, two-year transition from packaged goods to digital. Think again. ... 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. They honestly believed that they had a decade to make this transition (I think it's more like 2-3 years). Since the recurring-revenue sports titles were already 'booked' (i.e., fully accounted for in the Wall Street estimates) it fell to EA Games to make hits that could move the needle. 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. 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."
This is a business person commenting harshly mostly about how EA is financially ran, and that they haven't been able to grow as fast as Activision Blizzard (which was a one giant merker - like Microsoft and Google getting together). His bashing about the games isn't about gameplay, their originality, or how fun they are for players - it's just seems to be about business. "Hit" would be a game that makes lots of money, not how good it is.
I actually like the way EA has been taking. They're doing a lot more original, new IP and games than some years ago - last year notably Dead Space, Mirror's Edge, Dragon Age Origins.
The thing is that Activision Blizzard has grown in to a huge competitor with their World of Warcraft franchise, Modern Warfare 2, and Guitar Hero series. All of them, btw, series that have 6+ released games. Every year a new one. And the cash cow that World of Warcraft is.
It seems he was more happy when EA was the company that didn't create much of new IP or games, but just milked the old ones every year with new versions. Now EA has changed it's route a bit and releasing such new kind of games than Mirror's Edge, and such legends than Bioware's roleplaying games. They don't probably hold such a mass appeal, but they're great games and something new.
So is Activision Blizzard now the ones that are mostly after money, and EA trying to do something new?
Never! I could never even possibly concieve of EA ever doing anything wrong in their quest to make money by milking IP to death. /end sarcasm
One particularly unhelpful wrinkle of the U.S. version of capitalism + culture has been investors' singular motivation to hit it big and rake in the bucks and a general social unwillingness (management, the population, investors, regulators) to believe there is any social good in any business that does not generate massive returns and growth on a quarter after quarter basis.
There are simply many things that we need the economy to do that are not going to generate double-digit returns and result in world domination by a single sexy corporation. Plumbing, for example. Or reference publishing. Or wood milling. Instead of taking sustaining business + paying employees or small but steady growth as good enough within the context of also employing people and providing a necessary social good, we're happy to say "This hospital isn't giving us 20% year-over-year; it's only giving me 1%! I can get that from a damned CD! Fuhggedaboudid." And nobody bats an eyelid, everyone takes for granted that a hospital is only valuable if it's nice and profitable, otherwise it "couldn't compete" and "should" close in a free market economy.
STOP . AMERICA . NOW
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.
Most startups fail, but this doesn't mean we don't need startups.
An advice I read somewhere said to treat every project in your company like a mini-startup. Of course, many of those projects won't become an instant cash-cow. the secret is in being flexible, quickly recognizing failure, minimizing damage and adapting.
But if the company stops trying to innovate and create fresh products, then all you're left with slow death by milking the existing franchises. And of course, man of the best franchises started small as yet-another-risky-project for the company.
The only thing that I can remember about EA games is the logo and the girl whispering "EA Games", I can't remember what games had that "loading screen", actually the other thing I can remember about EA Games is most gamers seem to hate them.
While the marketing / advertising / PR types will probably point at my memory of the corporate logo and say "See, branding works!" the fact is that it doesn't, because the memory that I have is not a positive one.
I remember 3dRealms for Duke, I remember Raven for SoF, I remember Cavedog for TA, and those are all positive memories associated with good games.
I can't think of a single game that EA released, I can probably sit here and recite 50+ game titles, many of which may have been released by EA, but that's not the point.
Frankly the ex-exec is as out of touch as the CEO, if you are going to measure anything by my experience, but of course they don't do that do they, they measure stuff by the closed feedback loops of market researchers, also employed by EA, drinking their own kool aid.
The problem with EA is that unlike 3dRealms, Raven, Cavedog et al, they tried to make the "house" bigger than the "game", and I suspect that if you dig down to the level of the actual game workers, you will find that same corporate branding ethos at work, sure, you're all working on "Aliens vs Mario 7", but you're all working for EA first and foremost, you're all able to be switched around within EA, to "Mario vs Jar Jar Binks 3" at the whim of a manager.
http://slashdot.org/~GuyFawkes/journal
- work for EA for a while, at least until I can find a real job : CHECK
- leave the company with a nice bundle of cash and the appearance of now having insider knowledge : CHECK
- take various SHORT positions on EA stocks with the leverage of my new firm : CHECK
- write a nasty paper about how bad EA is ran, and have it published on /. : CHECK
- take even SHORTER positions on EA stock : CHECK
- wait for stocks to drop, take LONG positions and retire to the caiman islands.
You shut your lying whore mouth.
Things that, from what I know about the typical EA manager character, should fit them: ...Oh, wait!
- Weapon dealer / Warlord: Fueling wars by selling weapons to both sides, just to make money.
- Pharma industry: Getting school children on hard drugs sold as medicine, just to make money.
- Competition for Monsanto: genetically engineer slowly killing plants and make the whole world plant and eat them, just to make money.
- Music industry: Artist extortion and media reproduction, just to make money...
Any sufficiently advanced intelligence is indistinguishable from stupidity.
This is correct. What Mitch Lasky does not seem to understand is that these new IPs don't have to be immediate monetary successes. They are investments in the future. To understand how that works, one only needs to look at EAs past. They got into the current situation by not starting enough new franchises. Eventually, yearly updates to established franchises were not enough for EA to sustain their business. Hence, EA is failing because they did not invest in new IPs in the past, not because they invest in them now.
Activision is now going down that same path. They made a ton of money with risky, interesting new IPs such as Tony Hawk's and Guitar Hero. Now that they are on top, they're milking these franchises for all they're worth, but not investing in new, interesting franchises they can milk in the future - they're doing exactly what EA has been doing five years ago, and they will end up in the position EA is right now.
People like Mitch Lasky got EA into the position they're now. These people are the cause of EA's problem, not its solution. They need to shut their pie holes.
I think we've missed his point. EA continues to make very expensive "disc based" titles when things are going to "download only", thus cheaper (take a look at iPhone 1.99 games... Good luck selling a $9.99 app). The article said that EA thinks they have 10 years he thinks 2-3 years. Whether he's right or not, who knows. If he is correct then EA can't keep spending $50mil per title. People pay $60 per game because they can trade them in for $40. What happens when "download only" does not allow tradeins? The price of games will need to drop. (eg. Music Cds used to cost $20 now I find most for $10.). All $ Canadian.
EA: Patch Everything
Why get it right the first time when you can release a dozen 500MB patches?