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Finance

EA: Quality is "not the entire equation"

Wed 10 Dec 2008 9:15am GMT / 4:15am EST / 1:15am PST
FinancePublishing

Riccitiello defends new IP, but admits higher scores hasn't yet meant higher sales

John Riccitiello, CEO of Electronic Arts, has admitted that while the company's drive to explore new intellectual property and improve quality seems to have been successful from a critical ratings perspective, the new titles in its portfolio haven't yet generated enough sales.

Speaking in an investor call during which the publisher revised its guidance downwards on lower-than-expected sales, he pointed out that although the company is taking steps to improve profitability by - among other measures - cutting poor-performing SKUs, there's still hope for future iterations of new franchises.

"While we saw significant improvement in the overall quality of our key products this year, that quality has not yet translated into enough sales" he said. "So far in calendar 08 we have shipped 17 titles with Metacritic scores of 80 or above versus seven this time last year. Quality is a prerequisite for a great selling game - but it is not the entire equation.

"We did manage to put quality and innovation on the board, and we're very proud of that. Many times, what happens with a new intellectual property is the first edition doesn't generate the units that subsequent editions can generate, and I would argue that in this particular year the consumer might have more reticent to take risk than they might otherwise be, in a very crowded Holiday.

"So I think we've established the value for EA, and the value in our franchises, and these are things we can build on in the future."

He went on to defend those franchises specifically, and refused to single out any one title for criticism.

"We're very pleased with a lot of our new franchises this year," he said. "We think Spore has established a strong base for being an ongoing franchise, we think the same of MySims, Dead Space looks like a long term big winner for us. We expect Warhammer will continue to perform very, very well, it's life measured in multiples of years not multiples of months.

"Mirror's Edge is one that was very strongly reviewed. That one's going to go forward, we'll probably be looking at some issues around the design to make sure that a strong IP is married to a strong business," he added.

EA's share price fell by 11.5 per cent on the news by close yesterday, down USD 2.52 at USD 19.35.

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