EA Explains Portfolio Cuts, Outlines Strategy

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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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From The Chatty
  • reply
    December 9, 2008 8:11 PM

    Yes Mr Riccitiello it is surprising that that top 10 titles go on to be million plus sellers. I wonder if it's the heaps of praise that online journos pour on titles that go the extra mile or doing something new and adding that extra layer of polish instead of vomiting retreads to capitolize on a fad before it fades. Ruining a series with a huge following like NFS into the ground as you have is inexcusable given your past comments about giving resources to games that need them not rushing to market.

    Making sure your most likely to succeed, but also most likely to get pirated games, get DRM'd to the point of being laughing stocks among your potential customers and even the subject of lawsuits, but still be the most pirated game of the year, has a real strange sort of logic to it. Can't have anything to do with sales though, right?

    Oh and it's good that EA has learned once and for all how much everyone loves microtransactions to get stuff that should be free. Another ingredient in your amazing recipe for success.

    • reply
      December 9, 2008 9:14 PM

      You are 150% correct.

      You win one internet, go grab it out of the "big prize" box.

    • reply
      December 10, 2008 3:58 AM

      Why are so many people concerned about microtransactions? If done well, this is the most fair model I can think of, since it gives customers a chance to adjust the price they pay related to their involvement in a game - or pay nothing at all if they don't like it.
      Compare this to the traditional subscription or retail sale model, where you always pay the same price, regardless of how much you play or how you like the game. Microtransactions are much more flexible.

      • reply
        December 10, 2008 6:03 AM

        i would complain about microtransactions, if i didnt pay 60$ for a game already.

        • reply
          December 10, 2008 7:31 AM

          what if it only costs $20?

          • reply
            December 10, 2008 7:54 AM

            i'd have no problems if the game was only 20$

            meant to say wouldn't* earlier

    • reply
      December 10, 2008 5:03 AM

      no one could've said it better...

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