Stockholders May Not Appreciate EA's New Creativity
See Full ImageBusiness is business. Creativity isn't always good for business, though; in fact, it usually translates to risk.
Electronic Arts CEO John Riccitiello came to the top of the company with new ideas: he wanted to develop AAA new IPs, because his goal was to focus on quality rather than quantity. And so, in following that plan, EA launched several fresh names this generation, including Mirror's Edge, Dragon Age and Dead Space. But it's not like he completely ignored the established franchises; we continue to see new Need for Speed iterations, for instance. But even so, some analysts think that Riccitiello's bold emphasis on creativity may not go over well with the stockholders, who really only care about short-term profits. In speaking to Edge about the subject at hand, video game business author and blogger Nicholas Lovell had this to say:
"My number one fear is that EA's shareholders will lose patience with John Riccitiello's strategy. He is trying to turn a supertanker. Public market shareholders are generally short-termist, and I fear that they will not have the patience to see it through."
That's one way to look at it. But even the biggest blockbuster franchises began as new IPs at some point, right? Besides, with the exception of Mirror's Edge, the other big IPs launched by EA are getting sequels. They may not have sold as much as a Call of Duty but gamers and critics have been happy with EA products as of late. Maybe we shouldn't rock the boat too much early on, and just let the quality continue to arrive... We'll see what's what at a later date. Have patience, stockholders.
Tags: ea, electronic arts, ea ceo, ea stock, game industry
10/15/2010 10:22:19 AM Ben Dutka
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Comments (26 posts)
WorldEndsWithMe
Friday, October 15, 2010 @ 1:14:42 PM
5 up, 0 down
Qubex
Saturday, October 16, 2010 @ 9:15:16 AM
Q!
"play.experience.enjoy"
0 up, 0 down
KNG201
Friday, October 15, 2010 @ 10:48:41 AM
Reply
1 up, 1 down
big6
Friday, October 15, 2010 @ 11:19:06 AM
Reply
0 up, 11 down
Underdog15
Friday, October 15, 2010 @ 11:36:34 AM
But it's hard to blame shareholders. Why put your very livelihood at stake if it isn't working out. It doesn't take a genius to realize that if you're losing money, you should stop losing money if able.
I like the approach EA is taking, and I know in the future I'll become more and more loyal to their products, but only if they stick to the business plan.
Unfortunately shareholders don't always realize, that a new business approach typically takes a couple years to take root.
5 up, 0 down
big6
Friday, October 15, 2010 @ 12:07:17 PM
Haha... of course you don't want to sell when it's down. I'm waiting until Feb because the holiday season usually brings big sales numbers for everyone. The numbers will be crunched and made public before their fiscal year-end.
So, the gamble is on holiday sales.
1 up, 0 down
BeezleDrop
Friday, October 15, 2010 @ 11:31:29 AM
Reply
Last edited by BeezleDrop on 10/15/2010 11:31:48 AM
4 up, 0 down
Snaaaake
Friday, October 15, 2010 @ 12:19:44 PM
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Activision is just lucky they got a bunch of mindless fans.
1 up, 0 down
main_event05
Friday, October 15, 2010 @ 12:34:23 PM
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EDIT: Mirrors Edge was a great game. My only issue with it was that it was WAY too short.
Last edited by main_event05 on 10/15/2010 12:35:20 PM
2 up, 0 down
Alienange
Friday, October 15, 2010 @ 12:47:57 PM
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Nothing about EA is smelling fresh these days. Could it be the stockholders are feeling the same way?
2 up, 1 down
Hezzron
Friday, October 15, 2010 @ 4:27:28 PM
0 up, 0 down
Alienange
Friday, October 15, 2010 @ 5:17:39 PM
0 up, 0 down
WorldEndsWithMe
Friday, October 15, 2010 @ 6:43:35 PM
0 up, 0 down
SvenMD
Friday, October 15, 2010 @ 10:42:37 PM
Zero-G/Vacuum
Insane Weapons - ie, plasma cutter
Dismemberment (as opposed to just shooting something in the face)
Stasis
No HUD
No Pause
and Peng - I mean they invented a new drink!!!
Lots of great stuff there....did I mention I loved Dead Space? :)
0 up, 0 down
frylock25
Friday, October 15, 2010 @ 12:59:44 PM
Reply
0 up, 0 down
WorldEndsWithMe
Friday, October 15, 2010 @ 1:25:11 PM
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It's all about patience and letting the franchises grow. Of course you all know I just hope there's room for an Inferno 2 (And it looks like there is).
1 up, 0 down
Victor321
Friday, October 15, 2010 @ 7:21:38 PM
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I know they contribute greatly to a business's bottom line among other things, but haven't they realized that practically every industry has been hurt in some way thanks to them? I don't think investing is a bad thing, I just think millions of investors' intentions to invest today, are wrong.
0 up, 0 down
___________
Saturday, October 16, 2010 @ 1:15:50 AM
Reply
hes the savior of the company, he turned them from one of the industries worst most hated publishers to one of the best most loved!
crysis 2 and bulletstorm alone are going to sell like hotcakes!
i wish EA would do another godfather game, the first one was great and the second one was different but just as good.
shame they said were not doing anymore, was one of my favorite games.
:(
0 up, 0 down
Victor321
Saturday, October 16, 2010 @ 4:29:29 PM
0 up, 0 down
bingshi
Tuesday, October 19, 2010 @ 9:44:01 PM
Reply
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0 up, 0 down
Qubex
Reply
Friday, October 15, 2010 @ 10:46:20 AM
You need good solid I.P's to carry your pipeline forward, and it may take a company like EA a few years to build them with budgets of between 20 to 60 million, depending on the size of the title and the technical challenges that may lie ahead during development. Rome wasn't build in a day.
You want a company to have a solid base and a pedigree of good products that give you modest growth year on year, with a sustainable model so you don't experience a huge boom in one year, and then a bust the next, where you have to lay off half your team to keep the company on life support...
Less greed I think would generally yield a better more stable business/working environment for all concerned... without necessarily sacrificing moderate growth for the said company and industry as a whole.
Q!
"play.experience.enjoy"