EA management credibility is "nonexistent"
"We were in a 20-foot hole and we've climbed 14 feet out of it" - Riccitiello
Investors have no confidence in management at Electronic Arts, after the company lowered earnings expectations in January after posting losses for eleven consecutive quarters.
That's according to a report by Business Week, which pointed out that stock in the publisher has dropped 68 per cent over the period.
"Management's credibility is nonexistent right now," said Patrick Becker, chief investment officer of Becker Capital Management, which holds around 1 million shares in EA.
But CEO John Riccitiello is concentrating on turning a profit at the Madden and FIFA publisher, focusing on growth in digital markets as sales of traditional boxed product continue to fall.
"You see a six-foot hole that we're in," said Riccitiello. "I'm telling you that we were in a 20-foot hole and we've climbed 14 feet out of it."
New digital initiatives include "Project Ten Dollar", EA's attempt to tackle the second hand market. Consumers that buy new games are given a code to download additional content, but users who buy the game second hand will have to pay $10 to access the missing extras.
The company also bought social games company PlayFish for $300 million with the intention of migrating properties such as The Sims to platforms like Facebook.
However, Eric Goldberg, MD at Crossover Technologies and a previous consultant for Electronic Arts said the transition to digital isn't going to be easy.
"While it's possible EA can make the extremely difficult transition from providing a shiny disc in boxes to [leading] in digital, history suggests it's rather unlikely," he told Business Week.
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