Electronics Arts has continued cutting off less-profitable portions of their company following their recent fiscal report which presented losses up 26% percent.
After laying off 1,500 employees yesterday, the company now slashed its projected game releases in 2010 down to “somewhere in the high 30s”. While this still sounds like a pretty solid amount of games, consider this: In this now-ending fiscal year, EA has released upwards of 60 games. In regards to if this was going to be a continuing trend, EA CEO John Riccitiello had this to say:
“We felt that we wanted to position ourselves better to drive our titles to the very tops of the charts. It’s nice to be number one. We’d like to be number one by a wider margin and to do so with fewer titles. In rough numbers, mid-60s would have been the way to think about last year [FY2009]. [We'll release] approximately 50 this year and something in the high 30s next year. So when you consolidate this thing, it’s about a 50 per cent cut over two years.
EA is a massive company to be cutting back production by 50% with their selective publishing. Massive changes are afoot as EA aims to restructure themselves to become a more profitable company; though this likely puts many production companies in danger, as the drastic reduction may spell disaster for several games which may have otherwise had sequels – Riccitiello worded it rather bluntly:
“Electronic Arts has a core slate of games label and sports franchises that we will iterate on a either annual or bi-annual basis, and I think you know what those major titles are – all of them are selling or have sold in their most recent edition 2m units or more. After that, we’ve got The Sims and Hasbro, and frankly anything that doesn’t measure up to looking like it can pencil out to be in very high profit contributor and high unit seller got cut from our title slate from this point going forward.
This most definitely means games that were still enjoyable – if not as profitable – may have to attempt to search elsewhere for a publisher. John Riccitiello himself stated that the company would not be taking on “Risky IPs during these tough economic times”. So, for example, EA confirmed a month ago that a small team was working on Mirror’s Edge 2, which was planned to be turned into a trilogy. Likely, this is one of those games that wasn’t nearly as profitable for EA, and after recent actions, it’s hard to see them pumping Mirror’s Edge out as a trilogy.
What are your thoughts on the release cutbacks by EA Studios? Are you worried about any game studios that might be harmed by this? Do you think it’s a good idea to cut back their carried IPs after acquiring them?
Source: MCVuk
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That’s very unfortunate for the employees, especially those of subsidiaries that EA acquired. Perhaps on their own we’d still get the games and they’d still have the jobs.
It is a shame for the employees, but to be honest EA games are not always the highest quality, maybe this will mean the better titles will get through.
Going to be curious to see what happens with the Mirror’s Edge franchise…..
It sounds like a brilliant strategy to me. Gamasutra has contacted EA for further clarification about the new strategy the definition of insanity is doing the same thing over and over again, each time hoping for a different result..
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