EA Explains Portfolio Cuts, Outlines Strategy

By Nick Breckon, Dec 09, 2008 8:00pm PST After admitting that its sales forecast has fallen short for this holiday season, publisher Electronic Arts detailed its cost-cutting strategies in a conference call earlier today, bluntly stating that cuts to both its project lineup and staff will be necessary.

EA CEO John Riccitiello explained the areas where the company would likely make cuts: "I would say not in sports, and divided relatively evenly between core and casual."

The blame for the sales performance was attributed to a number of factors, including a market more focused on a handful of top 10 titles, as well as lower retailer stocking.

"There's been two notable shifts in the environment in which we compete," Riccitiello explained. "One has been an even more pronounced move to the top ten and top five titles, each of them having a higher percentage of total industry sales than... they have had in years past."

Secondly, he stated that EA is "definitely seeing a shift to online gameplay and online monetization" on a global scale.

Later in the call, the CEO noted that EA is focusing on games that capitalize on online content, revealing that BioWare's anticipated Star Wars MMO The Old Republic will be a "microtransaction-based" title.

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