EA strategy 'bankrupt' says ex-EA EVP

Former EA Mobile head Mitch Lasky blasts former employer, expresses amazement that company hasn't been acquired or management ousted.

After EA lowered its fiscal expectations earlier this week, analysts responded with politely reserved disappointment. The harshest of criticisms came from Wedbush's Michael Pachter, who merely suggested that the company "lacks introspection."

Lasky believes EA ridiculously overspent on a number of projects, including The Godfather.

Not all reactions to the news were so diplomatic. In a post on his personal blog, former head of EA Mobile and Jamdat founder Mitch Lasky took issue with the publisher's direction, particularly the management team in the years since John Riccitiello took over as CEO. The most pressing of Lasky's concerns was the company's insistence on trying to grow its traditional gaming business.

"EA is in the wrong business, with the wrong cost structure and the wrong team, but somehow they seem to think that it is going to be a smooth, two-year transition from packaged goods to digital," Lasky said. "Think again."

Before leaving the company in early 2007, Lasky said he wanted the company to embrace the transition to digital distribution and the games-as-service approach. While EA has since devoted attention to both of those areas, Lasky said it was unwilling to do so if it meant smaller revenues from its traditional EA Sports and EA Games divisions.

Among the missteps Lasky pointed to in those divisions were "ridiculous" and "appalling" spending on a number of projects, including Spore, The Godfather, Superman Returns, and The Simpsons. He also criticized the NFL and ESPN exclusivity deals for the Madden series, saying they hamstrung EA Sports' profitability.

"But by far the greatest failure of Riccitiello's strategy has been the EA Games division," Lasky said. "JR bet his tenure on EA's ability to 'grow their way through the transition' to digital/online with hit packaged goods titles. … Since the recurring-revenue sports titles were already 'booked' (i.e., fully accounted for in the Wall Street estimates) it fell to EA Games to make hits that could move the needle. It's been a very ugly scene, indeed."

Lasky pointed to Spore, Dead Space, Mirror's Edge, and Need for Speed: Undercover as examples of expensive games that didn't hit with consumers the way EA had hoped. He also brought up the functional closure of Mercenaries 2 developer Pandemic, which he called "half the justification" for the $860 million acquisition of BioWare and Pandemic.

"And don't think that Dante's Inferno or [Star Wars: The Old Republic] is going to make it all better," Lasky said. "It's a bankrupt strategy."

Lasky wrapped up his assessment of his former employer by expressing surprise that the publisher has neither been acquired nor seen its board of directors oust Riccitiello and the rest of the management team.

"It's remarkably hard to kill a company doing $4 billion in revenues," Lasky said. "But with flat or down stock performance since Q3 2003, how long are the institutional investors going to continue to hope against hope for a turnaround?"

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238 comments
made_u_look
made_u_look

PS We needs a new Mechwarrior game preferably a Mechwarrior Mercenaries sequel or remake. Have a nice Easter.

made_u_look
made_u_look

EA is a lost cause the only thing keeping them afloat is the Madden Franchise and Bioware making great games. I have a feeling they'll mess up Bioware some how and just go belly up. They did it with Maxis failed on bringing us a new Sim City instead we got Spore, and Sim City Societies. Personally let them fail so a better company can rise and bring us innovation and better entertainment instead of me coming on here commenting on how bad a game company is doing.

shabulia
shabulia

Mirror's Edge needs a sequel. Dead Space is getting one and I can't wait for it!

direnfeya
direnfeya

@ Cujo31 Yes, but if you are a smaller company that also means it will take a lot more time developing the same game with a smaller dev team. You got to weigh the Time/Money as usual

Cujo31
Cujo31

I've said it before and I'll say it again. We need to go back how it use to be, we need many small game dev companies competing and less big giant game companies trying to own everyone. You can't make a ton a money for a giant company with one or two great games. If Dead Space for example was developed by a smaller company I'm sure the costs of creating it would have been lower. The bigger you are the more of a chance there is for mismanagement and over spending.

thatmy
thatmy

EA's game is good but now they are so FLAK UP lies with their internal management politic struggle for POWER.

Lisandro_v22
Lisandro_v22

I don't know who CEO is the good one and which the bad one (or the ugly one) but EA has a long tradition of being the devil even if they released a 50 new IPs today they wouldn't make up for the ammount of good franchises they killed, how they did it? by buying studios only for their intellectual rights and closing them as soon as they felt like it

treava
treava

if think ea actually did something good these two years,at least it released some original titles like dragon age or mirror's edge,unlike other big companies just suck on sequels forever.

Kravyn81
Kravyn81

Ummm....so what new IPs? :? Someone please explain what this guy is talking about because that's my impression I'm getting from this article.

dlavizzo
dlavizzo

I agree with those who are saying that Blizzard's "success story" is based solely on the quality of their games. Blizzard determines what the customers want, and they give it to them, no matter how long it takes. How is that anything but a formula for success? Personally, as a consumer, I don't care much about the hype - I play a game, and if it has what I'm looking for, I keep playing. If not, I don't. Period. Almost every single Blizzard game has mass appeal, while EA keeps trying to succeed by cornering niche markets. For every major success, they pump out a disproportionate number of complete failures - failures that cost the company money, by the way. They're falling into the same trap the automakers fell into - ten or maybe even five years ago, a good marketing strategy was "be everywhere all the time". Now, with the market so oversaturated, fewer, higher quality titles less often, with inexpensive DLC that people actually want to play is the way to survive this business.

LordRaymond
LordRaymond

Fall of EA=Rise of Activison=Robert Kotick creates more hero/COD games

Autolycus
Autolycus

both EA and ACTIVISION are too large to survive in the stock market world. The Video Game industry is like no other and yet you have companies like Prachter and Gamble "analyzing" the industry and coming up short just about every time. Understanding how "business works" and understanding the gaming business are two different beasts.

XanderZane
XanderZane

Both EA and Activision have had a few misses over the last couple of years. EA has had more though. Activision picking up Blizzard was their best move. With World of Warcraft still so huge, Activision will always have money flowing into the company. EA's MMO games have mostly dried up. To think, just a couple years ago they were trying to buy Take_Two and Rockstar games. lol!! Now they are the ones that will probably get bought out. I hope Microsoft nabs them. That's a LOT of exclusive games they would have.

sukarestu
sukarestu

I dont know personally what this company think their doing But they better take better risks They should analyze what they publish than shoving things that sound good or get a fair interest from the gaming society Personally i think EA games should stick to what they can do best From what i've seen mainly games like Need For Speed or particular sport games Star wars: The Old Republic.. Amazing name, but what about the gameplay? Too much cover too less depth?

GtownStripes
GtownStripes

[This message was deleted at the request of the original poster]

GtownStripes
GtownStripes

How can you say that you hate/like EA or Activision? These dragons have so many game studios under their wings. Some better than others. I agree that it can be dangerous to expand a business too fast, and BOTH these behemoths are doing just that. Ah well, blablabla, yadayadayada.

colt_a
colt_a

If you think WoW is going to be around forever, maybe you should get out of the WoW bubble for a bit. Games die naturally, even WoW. EA might have bought Bioware for ToR, but they also bought them because they are the best RPG developer out there, period. The talks with EA and Bioware were happening before Mass Effect even came out, before Bioware announced doing any MMOs. EA's main flaw in all of this is that they grow too much. Yes, it can happen (take a few buisness classes). They are using a method of business that is risky and can (and is doing so) bite them in the rear by buying companies for hopes of one good product, then firing them shortly after. They gamble their money away and hope to win. Sometimes it works (Maxis for the Sims, Westwood for CnC Games). Othertimes it doesn't (Mythic, Several small devs). And sometimes, they kill / ruin potential by putting severe time limites on something that could be good, or trying to take some executive control over games (Firing Pandemic, Putting in the hated DLC Salesmen for the biggest ripoff DLC since Horse Armor in Dragon Age). Finally, its all catching up to them because of the economy, they realize they can't be the evil overlord of gaming anymore. It may bankrupt them and it would be all for the better. Hopefully people will realize that CoD has been the same game for the past 5 years and Activision will be next.

aaronpr0n
aaronpr0n

First off, that guy's high if he thinks EA bought Bioware/Pandemic for anything besides the rights to The Old Republic, which they're praying will finally be the MMO that takes a chunk out of WOW's hide. (Protip, it won't) Second, how did Warhammer Online not make it onto that list of games EA blew buttloads of development cash on for next to no return?

themidgethotel
themidgethotel

@mikeyman2002 unfortunately, I don't share the same view. EA and Activision together would likely take up more of the market share than Activision alone. Yeah, their stake would grow quite a bit but I doubt that scenario would be any worse for independent and minor mainstream developers and publishers than it is now. I hate Activision too. They already just wreaked the music rhythm genre by releasing so many. Both EA and Activision should go down in flames. Pave flaming corporate corpse roads for the future.

ignamatador
ignamatador

I think that EA has good games, but is like... i dont know, i feel something bad.

Protagon02
Protagon02

@GreySeven and toadman682000 I would of actually liked that game. As for EA... yeah they are getting too big for their own good. Buying and holding too many little subsidiaries won't really work. Too much on their plate and they can't eat it all.

oflow
oflow

hes not just a guy that got fired hes actually a guy talking about revenue streams and knows thd business. He left because they are driving the company into the ground and wont change direction to address the issue. In case you dont understand how real life business works, EA has been losing money since 2003, and they keep butting out over budgeted games that dont sell, its not a formula for success. The only thing that I see in his diatribe that could possibly be inaccurate is that the Star Wars MMO will probably be a huge success and actually give WoW a run for its money. Thats all any investors in the gaming industry want now-- WoW like revenue numbers. WoW is a yoke on the industry right now because its too big and smothering the entire industry.

gcfreak898
gcfreak898

Wow guess what nfl game was the best and ea still can't beat it NFL 2k5 go figure madden is a re hash every year except it has a new NFL roster. Paying 59.99 v.s. 19.99 no wonder they loosing money because they still SOOK! At making football games!

boobush
boobush

Of course, that's just a guy who got fired and probably isn't too happy with it. They haven't produced or published big amounts of raw crap lately, so it would be hard to tell.

Herbaceous
Herbaceous

@Patrickstar1986 It's not our responsibility to prop up businesses. Perhaps part of the problem is also down to the marketing strategies of companies like EA. Creating so much hype about titles, that often don't deserve it, can result in an equally extreme opposite reaction from the gamer. He/she goes out and buys the game with high expectations, installs it, plays for an hour, then realizes that it's no where near what they expected. The 1st reaction is usually that of feeling cheated or conned... A knock on effect is that the next time a new and innovative 'hyped' game is realeased, the reception is luke warm and suspicious. Most times (speaking for myself here) resulting in overlooking the game altogether. I have nothing personal against EA. Recently they have sold me several games. The Sims 3 and Dragon Age: Origins, to name two. Both were worth purchasing... A few months ago, however, I felt cheated after I bought Spore (considering all the hype). It wasn't bad, but it wasn't worth buying in my opinion. Even the gaming media have started adopting strange and problematic approaches to revealing these big budget games, including sites like this (Gamespot). They're often guilty of previewing games that haven't even gone gold yet. It confuses the industry and is definitely having a knock-on effect on the punters trust in the industry.

grungeman91
grungeman91

They need to appeal to the gamers more and not their wallets

hatieshorrer
hatieshorrer

I recall an article stating that game sales have gone down in 2009 but the number of games released is about the same as 2008. So game companies are spending as much money on games that sale less and dont make a profit. Theyre options are make games up to par with competitors and lose money, make games below par with competitors that dont sale as well and lose money, or dont produce any games and lose money. Any way you look at it you lose money.

Ladiesman17
Ladiesman17

They need to do a strategy like Blizzard, not Quantity, but Quality.. :D if you don't want to end up like Eidos or Midway... :( hopeless "businessman"

GreySeven
GreySeven

@toadman682000 Well it was a step in the right direction. :)

dave-dark
dave-dark

Bah let them die, produce the same games over and over again whilst only changing the numbers after the game name deserves failure in an economic sense!

melty3219
melty3219

EA makes trash like Bad company 2 and the new Medal of Honor so i dont care if they die.

P90E21
P90E21

Well sir I have be very werriy of what I buy new any more cause I just dont know if the game is worth the money to me and look at the recession that they claim is over Ha I dont see it ending that fast. But the way people spend money is changing and hopefuly game devs will start to go back to heart of what gaming use to be.

Patrickstar1986
Patrickstar1986

I think gamers should have a more responsible yet supportive stance when buying games. People tend to toss away cash at what seems enjoyable at first glance, however very few gamers I know read even one review when it comes to buying a game. Maybe it's just a refection of how Americans use their money. It however, would have helped keep franchises from constantly driving forward year by year. Hopefully something good will come from all of this rabble.

toadman682000
toadman682000

@GreySeven Well, they DID can that c&c fps on the grounds that it did not meet their quality standards.

mikeyman2002
mikeyman2002

@themidgethotel If EA were to go, then that only means more market share for Acti-blizzard, and we all know how they can be, sequel after sequel that would make final fantasy proud. No game company should go under, because that discourages competition & less games for gamers. EA is the biggest competition next to activision blizzard, and I for one, want to see EA put pressure on them to change their business strategy from releasing sequel after sequel like the old EA.

GreySeven
GreySeven

Blizzard probably has the best marketing strategy out there: make very few games + take decades to release them = $$$. I think the age of spitting out as many games as possible is over, which really seems to be EA's strategy. For example, a new sports game (football, soccer, whatever) does not need to be made every year. Spending millions on a game to add one player to each roster is a waste of money, in my opinion, and that's money that could be spent developing better titles. Then, when the new sports game comes out, it's 99% hype. That kind of game should just have DLC instead and maybe a new version of the game should be produced about every five years when the technology gets a boost. Also, not every movie deserves to be turned into a game, which is another trap EA seems to fall into over and over again, and not every game deserves to hit the shelf. Again, I point out Blizzard's successful quality testing and their ability to dump entire projects if they do not meet the standard, and they're still huge.

FatalFist
FatalFist

wait til TOR is out....their gonna be swimming in money=0

matte989
matte989

********************************************************************** Quote *talonreese*: "By the way, isn't at least some of this guy's ranting debunked by the fact that EA has 5 of the top ten on the PC charts for the year, including #1. (I mean they beat Blizzard for crying out loud)" *********************************************************** That may be true but Wall Street doesn't care. There is only one thing and that is growth(growing your business/profit). If a public company doesn't grow their business they are dead in the eyes of Wall Street. Heck, they even get publicly smacked down if their profit fails to meet expectations. Growth makes the stock price rise and that is what Wall Street wants. Companies regularly layoff people in order to meet or beat the estimates.

kdawg88
kdawg88

I'm being terribly confused by all this talk of business. The way I see it, EA is an average developer, and a good publisher, hence they are currently in it for the money. I know that because I hear a lot about their games (i.e. advertising), but when I play the games that they actually develop themselves, I am more often than not disappointed, and I cannot help but feel that the games they develop, particularly their sports titles, are simply a safety net for their financial position. They should stick to what they know best: the publishing business. The last good EA developed game I played was NHL99. Great game, great soundtrack.

Shadow_th
Shadow_th

@ wh1te_m4trix People don't "support EA" because they're not into charity. It's a business and they have to attract consumers. It takes more than a "we're changing" slogan for making people open their pockets. Seriously, if you look at EA's 2009 and 2008 releases, you can see probably why they're not doing so well. Few. Appealing. Games. New games such as Mirror's Edge are a good way to bring fresh ideas, but even those new IPs need a good gameplay, or else it's just an attempt of a game that could have been great, a missed opportunity. When I look at it, I believe 90% of great EA-developed games come from DICE and BioWare, with exceptions such as Dead Space. Maybe EA has grown too much for its own good. They have too many departments that came from small developer houses now that produce sequels that people don't care much.

themidgethotel
themidgethotel

@mikeyman2002 what EA needs to do is go out of business so better publishers can fill in the void. They've already tried to make some kickass new IPs, but Mirror's Edge and Spore have definitely fallen flat compared to what they could have been. EA just doesn't have the ability to execute any of the good concepts they've been coming up with lately. Seeing their profit margins, I think they're just going to run back to the old methodogy of "IP, Sequel, Sequel, Sequel..." rinse-repeating. It's long overdue that they went away.

mikeyman2002
mikeyman2002

I'm seeing a lot of misguided rant & backlash against EA here. Remember thatn John Riccitiello is actually trying to promote new ip and higher quality games in EA, but so far, none of the games to come out of them has been a blockbuster hit. They just don't seem to be able to pick out the winners from the losers in their software lineup. What EA needs is to focus on making a few innovative, new ips that have mass appeal & potential to be a big it. It makes me sad because people are lashing out against EA now for the old evil empire image of the previous management. The reason they are in the hole right now is precisely because JR is spending all that cash on developing new IP such as mirror's edge, dead space, dragon age, etc. Honestly, if EA were to continue w/ the sequelitis of years past, I'm sure they would be just fine compared to the hole they are in today. Core gamers, let's not hate on EA for actually trying, unlike a certain booby ko"dick".

ahanover
ahanover

"It's a frustrating issue because the majority of us that want new, original games are in the minority of the game buying crowd compared to the numbers that buy predictable sequels." @ Resident_Weasel - I couldn't agree more with this. You're completely right - as long as the game market is dominated by the people who will buy any game that they can, we'll very rarely get the companies to care about producing new and exciting games. They'll stick to what the mass public will be willing to buy, not what they want. I can't even tell you how many great sounding titles of games there were that were terrible. (So glad I rented and tried instead of bought those). And yet because the consumer market is easily swayed by flashy advertising, really boring, or even horrible, games keep lazy businesses like EA from going under. And I define 'lazy' as caring about the money, and therefore quantity, and not wanting to take the time or effort to produce a product worthy of being considered 'good'. (I know EA has released some good games over the past couple of years, but remember that it was the studios EA bought out that made the games, not the old EA developers).

wh1te_m4trix
wh1te_m4trix

I appreciate that EA is trying to be innovative, and they HAVE been trying to change their strategy, but their games don't get much support. Mirror's Edge is a great experience but people didn't support it, so is Dead Space and look how it did, one of the best survival horror games out there. I don't think EA is going anywhere soon, but they are not going bankrupt, sounds like this ex employee is angry at EA for some reason rather than looking at the innovation EA has been trying to support lately.

thenephariouson
thenephariouson

[This message was deleted at the request of the original poster]

JimmyJimJim
JimmyJimJim

Uh-oh Activision Blizzard is the new super power when it comes to game companies... I hope you die EA, you're money grubbing ways have pissed me off for far to long. I hope you die soon enough for taketwo to still be around to bring out a new nfl 2k.

Zloth2
Zloth2

Uhh, no actually, MMOs are dominated by the EverQuest model of gameplay, which Blizzard pretty much copied and spruced up. Why couldn't BioWare do the same?

Shadow_th
Shadow_th

Counting on The Old Republic pulling a World of Warcraft-esque number of subs would be very naive to me. I hope they aren't dumb enough to believe that. I love BioWare games but they're trying a different genre this time, single player and MMO games are totally different in many aspects, and the latter is dominated by WoW, and the genre is saturated with the WoW model of gameplay. EA's previous MMO had a very bad track record, even with good developers such as Mythic, they managed to pull a game that dropped the ball on Warhammer Online. It's BioWare, but in the end EA has the final word in the way of how their games will work out, especially in a profitable genre such as MMORPGs. If EA wants to step up they really need to bring something more than DICE/BioWare material, because they are the only ones who can provide quality titles and have credibility to spare despite being under EA's wing. But of course they can't do miracles.