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EA board stands behind Riccitiello

EA board stands behind Riccitiello

Fri 27 Jul 2012 7:59am GMT / 3:59am EDT / 12:59am PDT
PublishingFinancial

CEO admits concern for stock decline but looks to new market growth

The board of Electronic Arts has reiterated its support for CEO John Riccitiello, during a year that has seen the company's stock collapse.

Speaking during EA's annual meeting of stockholders, Larry Probst, chairman of the board and 24 year veteran of EA, said there were no plans to replace the CEO although the board does look at the long term future of the management team.

"The board has a very high level of confidence in John and the management team," he said. "They've done a really good job of actually exceeding their operating plan in the last two fiscal years. We think the strategy is spot on going forward and we have a high level of confidence that they will execute well against that strategy.

"After a couple of very, very turbulent, challenging times in the games industry, we're about to see another strong, positive performance"

John Riccitiello, EA

"That said, on a regular systematic basis we take a look at all of the senior management positions and talk about succession planning longer term. But at this point in time there is absolutely no plan to replace John as the CEO, we have a high level of confidence in both him and the management team."

During a presentation to the shareholders before the Q&A, Riccitiello admitted the decline in share price was a worry, but said shareholders were getting the wrong perception of the video game market by only seeing the stale console business.

"Our stock price has declined significantly, an area of concern for myself and the management team and the board," offered Riccitiello.

"There's a difference in perception of how we see the market and how some investors see the market." He pointed to the console business that "from approximately 2009 has been a market in decline."

"Digital, mobile, PC etcetera has been the growth marketplace and more recently a softening in the social market," he added. "Essentially they see us operating in not a growth industry, they see us operating in a flat industry. What I think they're missing is a multi-year understanding of trends and cycles of our business."

"Our view of the market is that after a couple of very, very turbulent, challenging times in the games industry, we're about to see another strong, positive performance."

3 Comments

Bruce Everiss
Marketing Consultant

1,716 598 0.3
Is this like when the owners of a British Premier soccer club say they have total faith in their manager and stand behind him?

Surely EA have missed several boats and done too much me-too, SWTOR anyone?

Edited 1 times. Last edit by Bruce Everiss on 30th July 2012 7:25am

Posted:A year ago

#1

Jack Lee

62 6 0.1
EA's aggressive pursuit of breadth in its portfolio will be its saving grace eventually, in my opinion. Though SWToR has probably been a misstep that they will pay for, I don't think it's going to be as ruinous as everyone predicts. The massive inroads EA have made into the social, mobile, and digital distribution arenas should help them weather the big transition in the industry.

Correct me if I'm wrong, but EA is actually making money still, right? Their Q4 earnings call was up in both revenue and profit year-over-year from 2011, if I recall correctly? Though people may be worried about the state of the retail console business and the subscription MMO business (as they should be), we shouldn't lose sight of the larger picture, one in which EA seems to be doing just fine.

Posted:A year ago

#2

Klaus Preisinger
Freelance Writing

953 804 0.8
EA certainly has room for improvement. There is the issue of retaining ownership of games on Origin in the face of being moody in the EA forums. How attractive would you consider a country which could disown you at any time?

There is a certain MMO which was way oversold and did not align with the current demographic of the franchise it was based on.

No attempted new franchises aside, EA is still the most reliable publisher to place a bet on. EA being underrated is good news for the customer. It means the customer does not get overcharged, it means there are no insane profits being paid to investors, it means the company remains competitive. It is easy to disagree with Riccitiello on minutia, but hard to dispute his overall performance.

EA have Bioware, EA snatched quite a few CoD devs from Activision, EA combined Citerion with a franchise selling on its own, EA has all the major sports. Any other company would still sacrifice their firstborns to get into EA's position.

SO what is out complaint? Not enough Ski or Die, not enough Budokan sequels?

Posted:A year ago

#3

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