EA's Riccitiello offers recession survival tips

D.I.C.E. 2009: CEO offers conference three rules to making it through current economic downturn, which he calls "a blessing" that will thin the game-industry herd.


LAS VEGAS--The new American McGee Alice game from Electronic Arts was the biggest headline to come from CEO John Riccitiello's presentation at this year's D.I.C.E. Summit--his second in a row. However, the brief address contained some advice that could prove much more interesting to publishers and developers struggling in the rough economy.

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Using a screenshot of a spectacular car crash as the starting point of his talk on the economy, Riccitiello acknowledged the layoffs that the recession has drawn from game makers like Midway, THQ, and EA itself. Rather than dwell on the cuts, Riccitiello shared with the audience his own approach to thriving in a failing economy.

The EA CEO said that when the economy turns south, the first things accountants say to do is cut headcount, close facilities, and reduce creative risk. If the problems persist, the advice is to do more of the same.

"That's a recipe you would follow at your peril," Riccitiello mused.

In this market, companies can't save their way to success, he continued. Instead, they need to focus their investments. To that end, Riccitiello's three rules for surviving a recession are to decide what's important, invest in those programs, and cut the rest. For EA, Riccitiello said the important parts are investing in quality, new IP, and gaming as a service, a topic that Valve founder Gabe Newell addressed in his D.I.C.E. keynote address on Wednesday.

"I actually think that the economic crisis the game industry moved into in 2008 is a blessing," Riccitiello said in a question-and-answer session following his presentation. One benefit, he said, is that a lot of "the riffraff" will go bankrupt. That's a positive event in his eyes because it's difficult to compete with shelves choked by substandard games. And while Riccitiello acknowledged that EA got "a little bit fat and a little bit too reliant on the way things were," he also added that the recession is a chance for those who act decisively to set themselves up for years to come.

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