Mar 18, news broke that EA CEO will be stepping down from his position. The reason for CEO John Riccitiello’s leaving the company is EA’s poor performance over the last year or so. Plans have already been made for an interim CEO while they look to fill the position.
EA has not been gamer’s favorite company due to debacles with over aggressive DRM like in “Spore” and most recently the inability to log into the latest “SimCity” game online. Despite compensation to those affected by the traffic oversight the sales for “SimCity” were affected.
The adjusted revenue reported by the company for Oct, Nov, and Dec of 2012 was .28 percent below the analogous 2011 figures and .11 billion dollars lower than Wall Street’s prediction. While the company may not be failing it isn't exactly doing well either. John Reccitiello is taking the blame for his company’s under-performance. He had this to say to the company,
“My decision to leave EA is really all about my accountability for the shortcomings in our financial results this year, . . . It currently looks like we will come in at the low end of, or slightly below, the financial guidance we issued to the Street, and we have fallen short of the internal operating plan we set one year ago. And for that, I am 100 per cent accountable.”
The official story is that Reccitiello is taking responsibility for everything and is stepping down of his own volition on March 30. Former CEO and interim place holder Larry Probst has defended his predecessor saying, “John has worked hard to lead the company through challenging transitions in our industry, and was instrumental in driving our very significant growth in digital revenues,” However, the behind the scenes story could be very different.
EA’s stock hasn't been doing great since 2008 and this recent turn of events hasn't exactly helped. Immediately following the announcement of John Reccitiello’s departure the stock rose 3.6% from $18.71 to $19.38. By the end of the day EA’s stock value had decreased to $17.15.
Regardless of the company’s performance or stock value Reccitiello will continue getting paid for the next 24 months. This on top of an exit package Wall Street values at $4.7 million. As much as gamers would like to think this is the beginning of the end for EA it probably isn't. Hopefully this recent financial disappointment will be a catalyst for some change.
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