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Champion Rising

Riccitiello's EA is taking huge risks - but so far, they're paying off. Can the winning streak continue?

When I last wrote about the EA acquisition of PopCap two weeks ago, the reaction was interesting, to say the least. In comments and even more so in emails, the deal has clearly polarised opinion between those baffled at the huge risk EA is taking - "Riccitiello is going to destroy shareholder value with this," one analyst opined bleakly in an email - and those who think it's a bold, important move that'll quickly prove its value to EA.

Personally, I'm still on the fence about the PopCap deal - but in the spirit of that polarisation, I think it's worth taking a look at exactly what's going on at EA, which remains one of the most fascinating companies in the industry. With John Riccitiello's hand on the tiller, EA has steered an extraordinary course - turning around its strategy, its reputation and its commercial performance.

That's something which is perfectly underlined by this week's first quarter figures from the company, which saw revenue rising to within touching distance of a billion dollars, while profits doubled to $221 million. Crucially, that improvement in the figures was reflected across the company's business; both digital and packaged goods saw solid revenue rises, reflecting strong performance in both traditional and emerging markets.

EA has managed to engage with new markets without ever lessening its focus on the core markets from whence it came

After spending over a decade as the most hated company in the core games market, standing accused of milking franchises at the expense of quality, of swallowing excellent game developers and destroying them, and of churning out endless low-quality licensed games - accusations of which the company was indeed guilty on all charges - EA is now one of the most beloved. That's partially due to some very intelligent PR - whoever decided to set the EA legal department on copyright troll Tim Langdell deserves a handsome payrise, for example. Five years ago I might well have believed that gamers would learn to love EA again, but that they'd learn to love EA's lawyers? Solid gold genius.

However, for the most part, it's just down to the company's output, and the financial results underline that perfectly. What are the stand-out successes listed in the report? Dead Space 2, Dragon Age 2, Crysis 2, Portal 2 and Battlefield: Bad Company 2 - all sequels, yes, but sequels to recent new IP launches which reviewed extremely strongly and enjoyed widespread praise from gamers. More success is on the horizon, too, with Star Wars: The Old Republic and Battlefield 3 pre-orders soaring - another pair of titles that will delight the core market.

Even the company's sports games, once utterly derided by the core market, have attracted significant respect in recent years. The report singles out FIFA 11 as a success story, with the football game having reached (appropriately enough) 11 million sales. A few years ago, that would have been met with rolled eyes at the willingness of the masses to buy anything with the FIFA name on it - this time out, it's been met with remarkable critical acclaim, with a Metacritic average of almost 90 per cent.

Outside the core market, EA has enthusiastically embraced new platforms. It's got a significant presence on iOS and Android, is increasingly keen on tablets, and is going head to head with the PC digital distribution platform, Steam, with its own online store, Origin - which it claims it will shortly open up to third-party content, potentially creating a real rival for Valve's dominance.

What Riccitiello has done, in essence, is a twofold strategy. Firstly, he has carefully charted a central course for the publisher, striking a careful balance between its traditional business in core PC and console gaming and its interest in emerging, mainstream markets. Where Disney, for instance, has hacked off its core gaming interests entirely in the pursuit of the emerging social market, and Activision has stubbornly ignored everything but top-selling core franchises, EA has managed to engage with new markets without ever lessening its focus on the core markets from whence it came.

Secondly, Riccitiello has adopted a strategy on product development which focuses on the two things that gamers always say they want from publishers, but which most publishers seem unable to actually pursue - a focus on developing original, self-owned IP, and as a corollary to that, strong processes aimed at bringing through quality in the company's products. EA has become a company unafraid to pursue original IP and willing to invest the time and money required to make the calibre of products required for that IP to become successful.

Author
Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.

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