A dark cloud has found its way into the world of EA SPORTS. Just a few days ago, Electronic Arts CEO John Riccitiello gave his resignation. According to Troy Wolverton of MercuryNews.com; Riccitiello, is resigning from the Redwood City company effective March 30, EA announced on Monday. He will be replaced in the interim by former CEO Larry Probst, whom EA named as its executive chairman.
Riccitiello felt it was necessary to opt out, after miscalculating profits and bad forecasting for January. He felt that the company’s overall internal plans would be affected by his mistake. In his resignation letter that was made public by EA, it was very apparent that the company’s forecast would fall well below what he had projected.
He went on to say in his letter that, "it all comes down to accountability," "EA's shareholders and employees expect better and I am accountable for the miss." In a news release, EA said it expected both its sales and earnings to be at the low end or below its forecast. Neither the company nor Riccitiello explained the shortfall and neither gave an updated forecast.
Riccitiello spent six years presiding over what seemed to be an up and down relationship with the video game conglomerate. EA posted losses in four of the first five years he occupied the position as CEO. They also posted losses through the first nine months of its current fiscal year. After the news of his resignation was made public, EA stock started dropping immediately.
The false projection of the forecast was just one of his many problems. Two weeks ago, EA's high-profile launch of a new 'SimCity' game was also damaged by overloaded servers that prevented owners from authenticating and playing the game. With all that, Riccitiello was still optomistic about the franchises FIFA and Battlefield games being an industry leader in the near future and possibly the next generation to come.
Riccitiello also managed other overly expensive company investments such as 'Star Wars: The Old Republic,' with the attempts to create a multiplayer online game that would compete against the global interactive entertainment software leader and the world’s largest independent video games publisher Activision Blizzard's 'World of Warcraft.'
'Activision Blizzard' has experienced all-time highs with a full year net revenue nearly reaching $5 billion and annual sales profits of $1.1 billion. The list consist of; Activision Publishing’s Call of Duty, and Skylanders Spyro’s Adventure franchises and such established licensed properties as Spider-Man, X-Men, James Bond and Transformers, as well as Warcraft, StarCraft, and Diablo franchises.
After hearing of vast profits such as these; any competitor falling extremely short would feel bad and try to find a way to rebound—especially a company with prodigious problems like Electronic Arts.
If you would like to read more on this: Contact Troy Wolverton at 408-840-4285 or twolverton@mercurynews.com.
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