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EA CEO's Departure Might Be Good For the Company 84

Posted by Soulskill
from the profit-chasing-behavior-backfires dept.
Nerval's Lobster writes "Electronic Arts CEO John Riccitiello might have resigned in the wake of the company's disastrous SimCity launch, but his departure might not be a bad thing for EA as a company. On Glassdoor, his 59 percent rating was 9 points below the average. One outside recruiter says Riccitiello's taken the fun out of the game maker's culture. 'They've never had a problem getting good talent and that's not likely to change,' says the recruiter, who requested anonymity because of his business dealings with the company. 'But, they've had problems getting great talent and that's not likely to change.' Let this be a lesson to gaming executives everywhere: if you're going to launch a popular title that needs to be constantly connected to online servers, make sure you have enough backend infrastructure in place to actually handle the load." A related article suggests EA needs to worry less about piracy and more about the company's apathy and legitimate customers who demanded a refund.
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EA CEO's Departure Might Be Good For the Company

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  • by Anonymous Coward on Tuesday March 19, 2013 @06:21PM (#43218367)

    >>if you're going to launch a popular title that needs to be constantly connected to online servers

    It all comes down to "needs"

  • Online only lies (Score:2, Insightful)

    by Anonymous Coward

    The reason they gave for being online was that they were running parts of the simulation your computer couldn't handle. That was a lie. They aren't simulating anything. People go to the nearest open job or house. Pathfinding is broken. It has nothing to do with their "infrastructure" and everything to do with them trying to sell you an unfinished product with no demo under the guise of DRM.

    • by chromas (1085949)

      The reason they gave for being online was that they were running parts of the simulation your computer couldn't handle. That was a lie.

      Well, duh. If that was the case then they'd need compute power greater than that of all the expected thousands of users combined (well, minus whatever processing can be shared).

  • The chances of a sequel for Mirror's edge dropped from maybe 1% to 0.5% or less. He had said it was a good game and wanted to see a sequel, even though it sold not very well.

    As someone who really liked that game, that makes me a little sad, though overall, fuck that guy.
  • by ADRA (37398) on Tuesday March 19, 2013 @06:27PM (#43218401)

    and I would never work for EA. They're a sweat shop. I realized earlier on that I wasn't meant to be a game developer, but I've know several friends that have bumped through the EA treadmill who've left burnt out and miserable.

    This may very well be the life of a most game devs, but I don't feel like 60 hour weeks is conducive to a healthy long term career with a company.

    As a user, since they've introduced Origin, I've bought one game (ME3) reluctantly, and quite frankly the EA label is a LARGE detriment to my decision for buying games. I was in fact intrigued at buying Sim City for $40 from Amazon before launch, but I was a little Leary about it. Now I think Ubisoft's a little rotten with this whole push for uPlay, but at least they're playing ball with Steam if nothing else.

    All that said, I'm VERY glad that the Indy scene seems to be picking up steam both in volume and quality. I'm sure Kickstarter and other such initiatives are helping lead us to a hopefully more diverse and healthy product ecosystem.

    • by SpaceMonkies (2868125) on Tuesday March 19, 2013 @06:35PM (#43218467)
      Back in 2004 Electronic Arts was criticized for employees working extraordinarily long hours—up to 100 hours per week—and not just at "crunch" times leading up to the scheduled releases of products. The publication of the EA Spouse blog, with criticisms such as "The current mandatory hours are 9 a.m. to 10 p.m.—seven days a week—with the occasional Saturday evening off for good behavior (at 6:30 p.m.)". The company has since settled a class action lawsuit brought by game artists to compensate for unpaid overtime. The class was awarded US$15.6 million. As a result, many of the lower-level developers (artists, programmers, producers, and designers) are now working at an hourly rate. A similar suit brought by programmers was settled for US$14.9 million.
  • by GoodNewsJimDotCom (2244874) on Tuesday March 19, 2013 @06:28PM (#43218411)
    I hate giving the bad guys ideas, but P2P really can reduce your server load by a great deal. Essentially, use other random players to simulate a server for you, or just check for hacks and keep your state. Then when the game is shutdown, if you don't do an eloquent shutdown yourself, the other players check their data against each other to make sure they're not hackers, then they send your state to the main server.

    It sounds like these guys tried to use an always on clientserver architecture which works for World of Warcraft, but the costs of which aren't sustainable for a game people might want to play 5-10 years down the road. Maybe EA just banked on the "fly by night" sim city where they take your money, then laugh in 2 years when people get cut off like they do with their EA sports games.
    • by medv4380 (1604309)
      That only works if you remove the DRM. I'm pretty sure Always On P2P wont work well with DRM.
    • by gl4ss (559668)

      uh but then the always on would have no point.

      point of drm always on is exactly that you can move code that is essential for gameplay to servers you control, so that people can't just reverse engineer binaries but have to do a full rewrite of the black box that is the server(but ea fucked that up too with simcity it seems from some reports).

  • Either he failed and got sacked or he was the bestestest goddamn CEO of them all, choose one already

    I don't understand why they are doing all this adulation, it makes EA look like they are letting their best man (in the whole damn company!) go, just say "No more work for you!, NEXT!"

  • by bloodhawk (813939) on Tuesday March 19, 2013 @06:29PM (#43218421)
    "if you're going to launch a popular title that needs to be constantly connected to online servers"

    Seriously who lets this shit past review. While I would love EA to be suffering and the CEO to be ousted because of the DRM BS it simply isn't true. The CEO has been underperforming for some time, the companies shares are down as is its financial performance and it has little to do with SimCity.
    • by vux984 (928602)

      All true. Although if the sim city launch hadn't been botched so badly and instead had gone off brilliantly then perhaps the 'underperforming shares' trend might have reversed enough to preserve him.

      • by bloodhawk (813939)
        It would take far far more than a single games success to turn them around. The problem with multi billion dollar companies is it is like a bus hurtling down a hill, SimCity if successful would be like downshifting gears. It may slow the decent but it would take a shit load more to stop the bus let alone turn it around.
    • by kamapuaa (555446)

      Actually, the board of directors carefully pondered each and every one of the 1-star reviews on Amazon before coming to a final decision.

    • by gl4ss (559668)

      simcity was just the turd on the shit mountain.
      if it failed to hit it's targets because of drm or not doesn't really matter, only that it didn't sell crazy matters.

      it's kinda funny though since their servers were doomed just with the load they knew was going to hit them.. much less if it had become a runaway hit(I don't really see it hitting it as big as sims... it's not really a game for the sims players nor for the simcity fans it seems).

    • As I posted (with supporting links) in another comment: The reason EA is giving for his departure is he's responsible for their performance being about $100 million short of what they expected. A successful game launch like Skyrim (at 3.3 million copies) earned $450 million dollars, so if SimCity sold 1.1 million at launch and this was immediately followed by Amazon pulling the game from sale and even once it was back, doing things like temporarily discounting the game to $46 bucks.. then sales are likely b
    • by gmhowell (26755)

      Unless you were sitting on the phones and emails while the discussions were going on, you have absolutely no proof of the real reason he was fired. Everything coming from him and the company is PR. Conjecture that he had to leave due to SimCity is just as valid as conjecture that he left due to poor financial performance. Or it could be some combination of the two. Or something wholly unrelated.

    • by ganjadude (952775)
      diablo 3 release was just as bad, I spent a month trying to get a refund with no luck. I dont know why more people are not still bitching about them as well to be honest. I saw sim having a problem, so i waited and im glad i did.
      • by tlhIngan (30335)

        diablo 3 release was just as bad, I spent a month trying to get a refund with no luck. I dont know why more people are not still bitching about them as well to be honest. I saw sim having a problem, so i waited and im glad i did.

        Because Diablo 3 is old news - it was released last year.

        And that Activision are just as money grubbing, but have "better PR" and have acquired many "likes" through acquisitions like Blizzard and exclusivity of developers like Bungie.

        If Bungie can get Destiny out within the year, it

  • by Lendrick (314723) on Tuesday March 19, 2013 @06:32PM (#43218439) Homepage Journal

    Given EA's corporate culture, it's entirely possible that the CEO is just a fall guy. The investors want blood, and somebody has to get fired. Unless their next CEO is someone who loves gaming things are just going to stay the same. The trouble with media companies in general is that their upper management seems to think differently from normal people; that is, they think in terms of monetizing things as much as possible without regard to how their customers might feel about that in the long term.

    EA's nasty DRM doesn't just prevent people from pirating their games, it also prevents customers from modding their games. Preventing mods allows them to make more money from "microtransactions", by selling silly little things that the player community could easily mod in if the game allowed it (and the value of these add-ons in terms of gameplay tends to be extremely poor). Conversely, you have companies like Bethesda who (while still copy protecting their games) allow people to create their own modifications, and then make money selling legitimate DLC with tens of hours of content each.

    Point is, I highly doubt it's just the CEO who's thinking that the best way to maximize profits is to sell a game and then nickel and dime people with stupid, worthless addons that take no effort to create. I'm guessing this is the attitude of the board of directors and upper management as well, and just replacing one dude isn't going to fix that.

    • by rahvin112 (446269)

      DRM's main purpose has always been the elimination of the used game market. They couldn't actively be talking about shutting down Gamestop so they instead talk about shutting down piracy when the goal is to actually get rid of Gamestop. They see used games as a lost sale, a real lost sale where the person would really spend money. They know with certainty there is nothing they can ever do about Pirates, so they go after the low hanging fruit. Why do you think the DRM usually come with install limits? DLC, i

      • by Lendrick (314723)

        I'm sure that's part of it, but it's possible to prevent used game sales with less nasty DRM (not that the prevention of used sales is in any way good or fair). Steam doesn't allow used game sales either, but it doesn't require always-online DRM for users to play their games (in fact, most of the games can be played in offline mode, without even needing an internet connection to start them).

      • I'm seeing more and more one time activation codes for PS3 games, not sure if this happens on the Xbox. If you do sell on the game, the person that bought it has to purchase a new code from the PS Store for around £10. It makes second hand games almost worthless to sell to stores that buy used games.

      • by kamapuaa (555446)

        What makes you say this? I got Battlefield 3 from a friend who does business with EA, to get some extra content you had to enter a one-time code from a printed card. EA could implement something like this just to get basic content, and kill the used market overnight (for new games, anyway).

        Piracy basically destroyed the music industry, PC games need to implement anti-piracy strategies as well.

        • by ax_42 (470562)

          And killing the used market overnight would be a bad thing for consumers and ultimately also for publishers/devs -- you are taking away a part of the value of the game (namely the resale value), without lowering the price of original purchase. Giving lower value at the same price should lead to lower sales, lower profits and (hopefully) a change in business model which involves the publishers getting their head out of their asses.

          BTW, piracy has made large inroads into the music "industry", where the "indu

        • by tlhIngan (30335)

          PC games need to implement anti-piracy strategies as well.

          Depends. The traditional AAA titles are a lot fewer on PCs if you don't count "we'll release PC to make a few extra bucks" console ports. However, the PC has a vibrant indie community (no doubt helped by mobile app stores that feed off each other - successful mobile games often get PC ports and vice-versa) that then slowly trickle to consoles.

          For the most part, other than a few PC exclusive game types, the PC game market is "dead" to all but indie ga

      • That certainly worked in my case. I loved Diablo and Diablo 2. I would most certainly buy Diablo 3. However, I can't. The always on DRM is a step too far for me. So, I did not purchase Diablo 3. I will never buy it. Their scheme has worked perfectly in my case. No piracy here folks. No game sale either. Oh well.

    • by ganjadude (952775)
      Great point. I was never a half life fan, but i did love how things worked with half life. Hell I even made a few mods for the game (working with a friend on an ICP mod level and characters) because it was so easy. I miss the days of DK quake and HL
    • For me the true horror is how much money EA makes while still doing all these things. Who is getting suckered into this? Its has to be in the millions of suckers!
  • You cannot prove even one lost sale because there is no evidence to state that any one person who pirated your game would have bought your game if piracy did not exist. From an accounting perspective itâ(TM)s speculative and a company cannot accurately determine loss or gain based on speculative accounting. You canâ(TM)t rely on revenue due to speculation, you canâ(TM)t build a company off of what will âoeprobablyâ happen. Watch âoeThe Smartest Guys in the Roomâ and see ho

    • by rahvin112 (446269)

      Warren Buffet backstops earthquake insurance in the state of California. He takes in millions every year in free money to provide reinsurance to California insurance companies.

      What this means is that if there is ever an earthquake in California that exceeds more than $5 Billion in insurance payments, Berkshire Hathaway is on the hook for any payments exceeding that amount. AFAIK he has no upper ceiling on his liability. If the big one hit southern California it's conceivable that his entire company would go

      • by MtHuurne (602934)

        What this means is that if there is ever an earthquake in California that exceeds more than $5 Billion in insurance payments, Berkshire Hathaway is on the hook for any payments exceeding that amount. AFAIK he has no upper ceiling on his liability. If the big one hit southern California it's conceivable that his entire company would go bankrupt backstopping the insurance market.

        That sounds like a large earthquake would be a humanitarian disaster followed by a financial disaster. Someone will have to absorb the amount not paid out in case of a bankruptcy. Whether it's the insurance companies, the citizens of California or the government, it's going to be painful, since they will all be short in cash after a large earthquake.

        • by rahvin112 (446269)

          Given Berkshire's net worth that would be one hell of an earthquake. At current value that would mean about 250 billion + 5 billion for the insurance liability. So a total of 255 billion in damage to private property (public infrastructure is backed by the government). Hurricane Sandy did a tremendous amount of damage at about $70 billion (I think that includes public infrastructure). So you would need the equivalent of about 3.5 times the damage of Sandy only to buildings and personal property (land value

    • by CCarrot (1562079)

      You cannot prove even one lost sale because there is no evidence to state that any one person who pirated your game would have bought your game if piracy did not exist. From an accounting perspective itâ(TM)s speculative and a company cannot accurately determine loss or gain based on speculative accounting. You canâ(TM)t rely on revenue due to speculation, you canâ(TM)t build a company off of what will âoeprobablyâ happen. Watch âoeThe Smartest Guys in the Roomâ and see how that worked out for Enron.

      Okay, so Enron fudged it, but insurance companies in general are all about building a business speculating on what will "probably" happen. The things that let them keep going are in-depth risk analysis, diversification, and a fat cushion of capital. As long as they're right sufficiently more often than they're wrong, then they win overall.

      Not that this will help EA out any, but that bit bugged me.

      True that, but there's a huge difference between the accuracy of actuarial tables and that of marketing projections.

      The insurance companies have to have the best, verifiable numbers possible to get a reasonable idea of how much they will have to pay out in an average year, so they can size their premiums accordingly. If they just say fugit and place the premiums at a hundred times what they figure they might pay out in a year, people simply won't buy their product. Those projections have to be based on th

    • TL;DR - seriously, he makes three points:

      1). You can't estimate loss of digital wares like you can with physical inventory. Thus a pirated game may not be a lost sale

      2.) DRM doesn't prevent this "loss" anyway so it's not worth putting resourced into.

      3.) Ill will from customers will damage your sales more than piracy, so don't piss off customers.

      He repeats these same points about 10 times each.

  • I realize and accept that a pirated copy of a digital game does not equate to money being taken out of my pocket. Posting links to articles that make you fall out of you chair should be prohibited. As soon as I find a lawyer that doesn't laugh when I tell them why I'm suing /. you're going to get it. :P

  • Turning customers off, driving them away, getting them into the habit of going elsewhere for whatever they're after is the REAL problem for any business.

    EA's suffered from the common attitude of Corporate America: "We own our customers." SimCity 5 is a symptom, attitude is the cause.

    I really don't understand why people were insane enough to buy SC5 in the first place, given EA's rep for crappy games and crappier treatment. You can live a couple of weeks without buying a luxury and thereby save yourself the

  • SimCity is a really bad game and I certainly hope that heads will roll for ramming an unfinished, needlessly server dependent game into the fans eager hands just to try and make some numbers for the quarter... but is Riccitiello really leaving directly as a result of it? Yeah, there's the timing of it, but the reason EA gives for the departure is they're going to be about $100 million lower on their guidance than they expected. Could they really be $100 million short this quarter from SimCity?

    So what are th

  • Look, the consensus seems to be that he was "CEO fired", which involves a lot more politeness and face saving then when the common worker drones are fired.

    So if the board did in fact "fire" him, then if his departure is _not_ good for the company then they made the wrong decision. You don't fire any employee, CEO or drone, in the belief that it's going to make things worse for the company (or rather the owners/board of the company) than the alternatives.
  • I think people are overcomplicating this departure. I'd be surprised if it had the slightest thing to do with the latest upsets involving the company (SimCity and Real Racing 3). Rather, I think the share price decline - and hence the departure - is being driven by one very simple thing.

    spunkgargleweewee [escapistmagazine.com]

    Forget all the "free to play" and "pay to win" crap. Investors know where the money in gaming is right now. It's in spunkgargleweewee. They look at Activision's profits from Call of Duty and think "I
  • at this point you know you are going to be treated badly. Don't buy ea games.
  • by manu0601 (2221348) on Tuesday March 19, 2013 @11:36PM (#43220551)

    On Glassdoor, his 59 percent rating was 9 points below the average

    Someone can explain me this sentence? Visiting glassdoor web site does not enlighten me about this 59% rating

  • Get rid of management that spends their time stepping over dollars to pick up pennies.

  • Been playing Battlefield 3 every night for the past month or so. Its alright I guess. Setting up Origin sucked. But once running it was fine. meh
  • SimCity was an epic fail for a game release and there is no way a CEO of a company failing this hard should be allowed to continue at this company.

    But this should be just the first of many firings or leavings that this company should expect.

    Bottom line is, any new CEO stepping in needs to end the bullshit of imposing always on and stupid DRM schemes, accept that some percentage of content will be stolen, but if you focus on creating good compelling games and offer them at prices people find affordable and h

  • Who needs EA when there is crowdfunding? The good people left long ago, and are making strong comebacks on their own, even banding together like they used to without answering to idiots.

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