The fall of an industry giant: Why EA's departing CEO will be hailed
Earlier this week, Electronic Arts' John Riccitiello stepped down as CEO, a position he'd held since 2007.
His reasoning is admirable: after the games giant failed to reach the financial guidance it had issued to Wall Street, and following a period in which the company had fallen to its lowest stock price since he assumed the position, Riccitiello stepped aside because of "accountability".
The truth is Riccitiello wasn't only answering to stockholders: he was answering to gamers, the most privileged and demanding consumers on the planet.
His resignation signals a troubling trend in today's fractured games industry. Only a few months earlier, publisher THQ crumbled, selling off its most prized assets, including the popular Saints Row and WWE wrestling license.
Gamers easily fall into the trap of forgetting that the games industry is actually — shock horror — a business. Frustrations often spill out when analysts make bold predictions about certain brands, leading to inevitable "fanboy" online battles, where those loyal to specific companies defend their decisions, no matter how frustrating those choices might be for stockholders.
In an unfortunate representation of the maturity — or lack thereof — of gamers (and even some media), many appeared to celebrate Riccitiello's resignation, not because they believe a CEO should be held accountable for failing to meet financial targets, but because they feel he single-handedly attempted to scam the consumer.
There were people celebrating that someone was out of a job, rather than acknowledging both the contributions he'd made to the industry and the fact he'd taken responsibility for the company's financial spiral.
It is admittedly hard to feel sympathetic for a man with a 24-month severance package. Yet he held himself accountable for EA's failed financial projections and goals. It doesn't matter how big your bank account is: it doesn't feel good to admit you haven't done your job well enough.
Unsurprisingly, stockholders accepted his resignation, and EA stock rose following the announcement.
It is a harsh reality (for some) that money helps fuel the games industry — as it does any industry — and yet their is a wide belief that it somehow is contributing to the industry's "downfall" — its lack of innovation and originality.
It's true that publisher influence and the almighty dollar can compromise a game's creative integrity. Yet at the same time it would be irresponsible for an industry to fund projects without the market to dictate the cost. It's no different to any other entertainment industry on the planet.
The independent development scene is thriving, thanks in part to a growing mobile sector. Young designers and coders have the capacity to work without publisher influence, and this can certainly lead to some truly innovative games.
The problem is that, when a market is flooded with cheap games, made by people knowing they're going to make a hefty profit, consumer confidence falls, and the inevitable crash occurs.
It would be silly to just assume that those making games for these platforms are only creative individuals not at all driven by financial gain, especially in a market as open and accessible as the mobile scene.
No-one is immune to this crash, not even the so-called evil corporations stopping you from logging onto SimCity's failing servers (which, let's be honest, was probably the final nail in the coffin for Riccitiello).
An EA under Riccitiello's reign might have changed major franchises like Mass Effect, Medal of Honor and Need For Speed, arguably for worse, but he also initiated change at a time when the industry was craving a significant shift from aging business models.
The hardcore gamer spending hours playing Diablo 3 might not appreciate the growth of social games on Facebook or free-to-play "casual" games on iPhone, but these new directions are initiating change throughout the industry, leading to further innovation and creativity on a different scale to what we're used to.
EA went from being a publisher selling just packaged goods, to one of the dominating online distributors. The industry needs platforms to evolve and distribution methods to change, otherwise it will become irrelevant very quickly. no-one will benefit from that.
Riccitiello might be condemned by a large group of gamers for constantly changing the ways people consume and pay for content, but someone needs to be there to push the PopCaps and Playfishs of the world in the right direction. They were costly acquisitions, but they helped improve a thriving mobile market lacking quality control.
The biggest problem was that Riccitiello's acquisitions were not capitalised on, and EA still struggles with internal development on its most popular brands. It also lost significant market share in the sports game space by dissolving the NBA Live brand and practically handing that market to Take-Two, a company it tried to acquire in 2008.
While his resignation might be celebrated by yahoos on discussion boards and social networks, Riccitiello's risky manoeuvring and acquisitions were made in an effort to fuel economic growth in the industry.
Without that growth is an industry lacking quality control and confidence. For as poor as EA's financial situation was during his tenure, many of his decisions will be hailed in the future as revolutionary.
