Not looking good for EA - former Exec says they're in the wrong Business

[wanderer27]

Thought I'd pass this along for those interested.

This is from a former Sr. VP for EA, and even he doesn't get the whole picture.

http://bizpunk.blogspot.com/2010/01/after-bell-today-ea-announced-massive.html


This is probably the most enlightening thing in the article:

EA is in the wrong business, with the wrong cost structure and the wrong team, but somehow they seem to think that it is going to be a smooth, two-year transition from packaged goods to digital.

They may not be much longer for this world:

With EA's enterprise value down below $4 billion, it's remarkable that nobody has stepped in to put them out of their misery with an acquisition. Certainly, Disney has been looking at them since I was at the house of the mouse back in the early 90's. And there are Chinese companies, like TenCent, that could easily swallow EA whole.

They truly are the Anti-Midas:

It's equally amazing that the board continues to support the existing management team through this debacle. Since JR took over, the company has destroyed over $11 billion in market value. Certainly, some of that was the economy and the general erosion of value on NASDAQ, but Activision (the blue line below, vs. EA's red line) has experienced far milder effects from the recession

 

[exar333]

Good riddance. The best thing to happen would be for EA to fall apart and companies to pick apart it's IP to the highest bidder.

 

[wanderer27]

Good riddance. The best thing to happen would be for EA to fall apart and companies to pick apart it's IP to the highest bidder.

Yeah, they've really killed some good Company's / Franchises, and they've screwed over the consumer in the process.

I'd like to see someone actually make some good use of some of the IP they have too.

 

[BladeVenom]

It's nice to know that EA's decision to screw their competitors and customers with exclusive license deals ended up losing them tens of millions of dollars.

 

[crisium]

I don't mind EA anymore. They've been quite reasonable recently. DRM on PC releases is the only negative thing, but I can live with it. Activision are the evil ones because they only release Call of Duty, Tony Hawk, and Guitar Hero. At least EA tries new things like Mirror's Edge, Brutal Legend, etc. I'd prefer is they got split up rather than bought since I the more publishers the better, but Activision needs to be kicked in the ass - not EA.

 

[Maximilian]

Well its been a long time coming, what do they expect after wrecking so many franchises and putting out trash for such a long time.

I like their new "lets make good games" attitude but i think it might be too little too late. Dead space and the sims 3 are great, mass effect 2 will tell if EA has had any negative effect on bioware which i hope they havent but overall theyve passed up/wrecked too many opportunities to make cash in the past. Now overtaken by actilizzard who actually make half decent games! Well blizzard do im not sure what the activision side have made apart from MW2 which imo was ok :/ I could rant for ages about what EA did wrong... so i will

C&C generals?? wtf? Lets take a successful franchise one that made it into the guiness book of records for most strategy sales and change everything! Gameplay, storyline, multiplayer because thats what people like right? Massive change all at once... fantastic... For the generals fans yeah its a fine game on its own but compared with the rest of the C&Cs its dog shit. It all went downhill after that.

Wheres dungeon keeper III? What happened to theme park, it was way better than rollercoaster tycoon, theme park world was a 1999 game that looked like somthing from the mid 2000's very good game. Wheres populous gone? Why did they buy bullfrog and then not do jack with their IP, what was the point in that?

Simcity 5 anyone? Spore? Simcity 5 isnt coming anytime soon, probably never and spore sucked. Good plan EA! Just buy maxis and churn our endless sims expansions to hell with the rest of their IP, the IP that made maxis a big name in the first place! Now the talent has left and maxis is just a label, good one EA.

Theres a pattern here, they buy developers for their IP but fail to realise the IP is frickin worthless without talent behind it and the talent usually leaves in droves like all the westwood employees did and will wright too. The sims is the only exception and its probably not enough to keep the rest of the games division afloat. For anyone who is thinking "well theyre just a buisness, thats what buisnesses do" gtfo of the pc gaming forum you clearly arent a real gamer and dont belong here, buisness 101 is that way <--- They wrecked popular franchises, good buisness or not from a real gamers perspective that sucks balls....

On a lighter note im looking forward to dead space 2 and mass effect 2 will hopefully be awesome. I really do hope theyve changed their ways for good.

End of rant.

 

[Magusigne]

YAY!

Let em' burn!

Maybe we'll have some truly brilliant games rise from the ashes.

 

[acheron]

Theres a pattern here, they buy developers for their IP but fail to realise the IP is frickin worthless without talent behind it and the talent usually leaves in droves like all the westwood employees did and will wright too. The sims is the only exception and its probably not enough to keep the rest of the games division afloat. For anyone who is thinking "well theyre just a buisness, thats what buisnesses do" gtfo of the pc gaming forum you clearly arent a real gamer and dont belong here, buisness 101 is that way <--- They wrecked popular franchises, good buisness or not from a real gamers perspective that sucks balls....

uh, wut? why would someone say "that's what businesses do" when the article is about them losing millions of dollars? I guess that is what some businesses do, but they tend to not be businesses for very long.

 

[exar333]

uh, wut? why would someone say "that's what businesses do" when the article is about them losing millions of dollars? I guess that is what some businesses do, but they tend to not be businesses for very long.

Assuming they are not "too big to fail" for the gaming industry. D:

Anyway, I am hoping they crumble and some great franschises can come back.

 

[brblx]

Well its been a long time coming, what do they expect after wrecking so many franchises and putting out trash for such a long time.

I like their new "lets make good games" attitude but i think it might be too little too late.

it's not too little too late, it's exactly what is killing them.

if they still marketed exclusively to retards ala activision, they'd probably be doing fine.

 

[Kalmah]

On the other hand, now that EA owns practically everything.. What if it had the opposite affect that everybody is predicting? What if it leaves a big hole in pc gaming? ..and nobody fills it up?

Ok, that's doubtful.

Would Bioware be able to remain Bioware? Or would they have to start over with a new name?

I'm also pissed about Dungeon Keeper 3 still. If I remember correctly, their reasoning for buying Bullfrog was because they had Black & White about to be released and thought that DK3 was too much of a competition.. so instead of welcoming competition they bought it out. I wonder if this maneuver actually payed off? If the costs of buying an entire studio surpassed the extra money they made from black and white?

 

[coloumb]

This is the sign of bad old school greedy management execs:

"So now, a couple of months after the board granted JR another $7 million worth of restricted stock units in addition to 140,000 options and EA Games president Frank Gibeau another $2 million in RSU's, EA cuts financial estimates to the bone. And don't believe this is the end of the bleeding. This latest stock drop, if consistent with the after-hours trading, will wipe out virtually all of the gain from 2009. "

Our company had execs [including one of the founders] with exactly that kind of attitude - today those execs are either being fined or are in jail due to price fixing of stocks. The only reason our company managed to stay afloat during the past 3 years was due to firing and replacing execs who weren't doing the job to make a quick buck - they wanted to see the company through the rough times and be there when the company was back being profitable [which we were last quarter].

It sounds like EA is being run by old school greedy exec's - they will get their stock options, bonuses, etc and leave just before the crap hits the fan. My guess is the same exec's will go work for another company and repeat their greedy ways...

 

[Cstefan]

After watching them buy and destroy small companies over and over, they deserve it.

 

[Phobic9]

Would Bioware be able to remain Bioware? Or would they have to start over with a new name?

This is what concerns me. Bioware is a great studio and it still saddens me a little to see them get swallowed up by EA. If EA were to go under for whatever reason, it would be interesting to see what happened to Bioware.

 

[Maximilian]

uh, wut? why would someone say "that's what businesses do" when the article is about them losing millions of dollars? I guess that is what some businesses do, but they tend to not be businesses for very long.

Theres always someone who says that, theres always some devils advocate that defends lousy buisness pratices.

it's not too little too late, it's exactly what is killing them.

if they still marketed exclusively to retards ala activision, they'd probably be doing fine.

They do still market to retards, its called EA sports.

 

[soccerballtux]

Good riddance. The best thing to happen would be for EA to fall apart and companies to pick apart it's IP to the highest bidder.

We'll bail them out instead. Would be bad for the economy otherwise.

 

[Schadenfroh]

The bad thing about EA going under is that Bioware will also go under. Other than that, screw them. They already destroyed legendary companies like Westwood, Origin Systems and Bull Frog. Maxis had a great city simulator, but I did not care for their other ventures. The only reason anyone would want EA would be for EA sports as that is probably their biggest money maker (unless those exclusivity licensing deals hurt them more than they help). If Sony or Microsoft were allowed to buy EA sports and make their titles exclusive to their platform(s), then it would kill the other console (Wii will be sparred since it is for a different target audience).

The last hope of EA is the Star Wars MMO. If they successfully pull that off, then it will print money (with a large chunk saved for Lucas Arts). If they get impatient and ship it before it is ready or fail in an attempt to make it appeal to everyone (which is highly likely as appealing to everyone usually ends up in alienating everyone), then EA Sports will remain their only core IP. They might be able to snag a few COD players with the new BF titles. I would not be surprised if they clone the COD mindless shooters and label them BF.

 

[Modelworks]

EA in the wrong market ? They have been since westwood studios ceased to exist. EA never understood gaming and the sooner they crumble the better it will be.

 

[mmntech]

On the other hand, now that EA owns practically everything.. What if it had the opposite affect that everybody is predicting? What if it leaves a big hole in pc gaming? ..and nobody fills it up?

Not just PC gaming but gaming in general. Since EA now owns so many IPs, they along with UBIsoft and Activision form the "big three" of third party titles. EA going down would leave a huge mark on the console industry as well. Microsoft in particular as they never really built a strong first party library. Of course it's not as if others won't jump in. However, having the remaining two big 3P companies fill in the void would be vary bad for gaming.

When companies get too big, they get bureaucratic and begin to loose sight as to why they're so successful. It then becomes taking the path of least resistance. To them, if one customer leaves, 10 more will take their place. However, there is a law of diminishing returns in effect here. Gaming is a a luxury. People don't need to play games.
The Spore fiasco I still think really hurt them in the PR department. You can't dick around the casual gamers because they'll just go elsewhere for their entertainment. Unfortunately for EA, that's where the money is today, and where the vast majority of their sales come from. They leave en mass, nobody will be there to take their place as the hardcore market is already saturated.

EA in most likelihood wouldn't vanish. As a worst case scenario, they'll enter bankruptcy protection and reboot as a much smaller operation. Only the big profit making IPs would remain, meaning EA Sports and The Sims franchises. I would expect Bioware et al to be sold off.

 

[Zenoth]

I loved Westwood, but EA did not "destroy" Westwood Studios, they [Westwood] started to go down hill by themselves when they were desperate enough to bring Yuri's Revenge and do their first real attempt at milking a franchise, and as much as I liked Westwood I for one never really liked Yuri's Revenge and I still think that the original Red Alert is the best of the trilogy, that vanilla RA 2 is much better without Yuri thrown in, that Red Alert 3 is just as good as vanilla RA 2, and that C&C 3 especially with Kane's Wrath is the best title of the Tiberium Wars saga since Tiberian Sun. Additionally C&C Renegade didn't help their cause and that one was long before Generals was released. There's highs and lows and the lows aren't universally occurring only from and after Generals, if that's what you really think Maximilian then I wholeheartedly disagree.

My only complaints regarding the C&C franchise are found in relation with Generals (which I indeed never liked) and C&C 4 (which will apparently require to be on-line at all times even when playing single-player missions, won't have any base building - in a freakin' C&C game - and will play exactly like Company of Heroes and Dawn of War II with resources points capturing, making me wonder how in hell EA still haven't been slapped in the face by Relic for that obvious lack of originality and their seemingly desperate need for change by copying others). Yes, I won't deny it, EA has done bad things to the video gaming industry, but it's not always their entire fault, EA just seem to cause havoc in a very localized manner (at least when it comes to the C&C franchise), sometimes it's actually good, sometimes you wonder why they even exist, but it's not always bad.

The titles that I will defend under the EA "reign" within the C&C franchise are RA 3 and C&C 3, forever, the rest... I can't possibly care less.

 

[ZzZGuy]

You see, you do speak with your wallet.

 

[IndyColtsFan]

YAY!

Let em' burn!

Maybe we'll have some truly brilliant games rise from the ashes.

I remember when EA was actually respected and people liked the games they distributed. I think that was well before they started swallowing studios. Bard's Tale, Adventure Construction Set, and Dr. J vs. Larry Bird were good games back in the 80s.

 

[Schadenfroh]

sooner they crumble the better it will be.

It might even bring about a 2nd video game crash. It will allow the modding community and independent developers to flourish in the new renaissance that emerges from the ashes.

 

[Drift3r]

It might even bring about a 2nd video game crash. It will allow the modding community and independent developers to flourish in the new renaissance that emerges from the ashes.

No it wouldn't as any valuable (as in popular) remaining IP's would be liquidated and sold to douche bag companies like Activision, Ubisoft, etc..

 

[BladeVenom]

No it wouldn't as any valuable (as in popular) remaining IP's would be liquidated and sold to douche bag companies like Activision, Ubisoft, etc..

But would the buyers buy them to make into games, or would they buy them to horde the rights to titles to keep them from being made by someone else. EA has the rights to many great titles that they don't use, but they keep them just to keep others from using them. I'm betting that many titles would be bought just to prevent competition.