EA CEO John Riccitiello steps down, and you should be afraid
Electronics Arts has announced that CEO John Riccitiello is stepping down, effective March 30. Larry Probst will step up as executive chairman and lead the company while they look for a new CEO. “The Board will consider internal and external candidates with the assistance of a leading executive search firm,” EA said in a statement.
The move isn't entirely unexpected. EA may be crowing about the relative success of Real Racing 3, and they just announced that SimCity has sold over 1.1 million units in its first week of availability, but Kotaku has pulled up EA's stock performance under the leadership of Riccitiello, and it's not a pretty picture. We've discussed EA's problems with getting its AAA business in shape, even though its digital business, most notably the free-to-play Simpson's Tapped Out, has grown in recent years.
Riccitiello was blunt about his reason for leaving in his own statement. “My decision to leave EA is really all about my accountability for the shortcomings in our financial results this year,” he wrote. “It currently looks like we will come in at the low end of, or slightly below, the financial guidance we issued to the Street, and we have fallen short of the internal operating plan we set one year ago. And for that, I am 100 percent accountable.”
Being accountable for the company's low performance doesn't keep Riccitiello from enjoying a delightful severance package. “As part of Riccitiello's separation agreement, he'll receive 24 months of salary continuation and continued vesting of unvested stock options until Nov. 30, 2013, with those options exercisable until Feb. 28, 2014,” Polygon reported.
So why should you be scared? The new CEO is going to come in with a mandate to increase earnings, bump up the stock price, and to try to get EA closer to its 2007 heights. Executives have already stated that the market has spoken on free-to-play games (spoiler warning: the market loves free-to-play games) and microtransactions (spoiler warning: EA loves microtransactions). We're scheduled to check out Battlefield 4 at next week's Game Developers Conference, and I'm a little scared of how EA will have tried to wrest money from that particular franchise.
I'd love to see an EA that doesn't mind trying new things, and allowing games to build an audience while treating the player with respect. That's a strategy that only works on the long term, however, and it's very likely the company will do whatever it can to improve it's short to midterm performance. Be afraid.