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Evening Reading: Microsoft Should Buy EA

by Garnett Lee, Jan 15, 2010 5:00pm PST

It's been a rough week for Electronic Arts and its CEO John Riccitiello in particular. On Monday the company disclosed the bad financial numbers we already knew were coming by virtue of their recent heavy layoffs. It clearly has taken a toll on Riccitiello who only offered to investors that the turnaround is taking longer than expected. That much was pretty clear from the numbers.

With the hard numbers now out there response has been harsh. On Wednesday it boiled over in the indictment of Ricitiello by former EA executive Mitch Lasky. For its part EA held the line with head of corporate communications Jeff Brown responding "Mitch needs to try de-caf. It's never easy being turned down for a job...Since Mitch left EA, Apple invented the iPhone, Facebook evolved to include a gaming platform and EAMobile became the world leader." But make no mistake, there's blood in the water and Riccitiello faces mounting pressure to be removed.

In my opinion that would be a terrible mistake. I won't sit here and pretend to have some in-depth knowledge of how the man operates. From listening to his presentations and covering EA as a game company under his leadership, though, I do have a sense that as CEO's go he's one of those people at the top who actually gets video gaming. While the economy pressures large publishers to increasingly take an accounting-driven point of view to their business, I like the idea of having a guy at the helm of EA who at least sees their creative side.

That probably won't be good enough to save his job. But rather than send Riccitiello packing, I think he ought to get a new job: head of Microsoft's new EA Games division. Yep, you heard me and I know some of you are throwing your hands up in disgust but hear me out. There's a good chance that EA's predicament will result in their being bought by someone. The opportunity is just too great. And the setup couldn't work out any better for Microsoft.

For starters, the 2009 video game sales figures make it crystal clear that big third-party games have to be multiplatform. Exclusives will come from first-party developers. Microsoft's attempts to develop its Game Studios in-house have struggled at best. Buying EA gives them a proven turn-key large-scale operation. It also would deliver a body blow to rival Sony on the sports front. Even should the licenses go back on the open market having Madden, Live, NHL, and FIFA as first-party exclusives would be a powerful lineup (see the Dreamcast's struggle to compete even with the solid 2K titles). The table is even set for it to be a soft landing with popular Microsoft alums Peter Moore and John Schappert now in key positions at EA. And it wouldn't necessarily mean all EA games would be exclusive. This is the same Microsoft that duels Apple for OS share and then sells Mac versions of its Office software.

And there you have it. Now, today's news:

Enjoy the weekend!


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