The video game industry is similar to the music industry in a lot of ways. They are both victims of their time and will need to adapt their business models to survive in a digital age. With PAX East 2013 descending once again upon Boston, MA this weekend, much of the news has been focused on upcoming releases and what we can expect to see at the convention. It is almost difficult to believe that the video game industry as a whole is still slumping, but it is. Google's Android OS has opened doors for independent developers like never before, and companies like OUYA are taking the platform to new places. On the flip side, comparable to corporate record labels, we have the major game publishers/developers who are taking financial hits each quarter. This is the reason Electronic Arts (EA) CEO John Riccitiello resigned shortly after the market closed on Monday.
NASDAQ.com reports, "Over the last five years, [EA's] stock has lost around 60 percent and EA has not been able to recover from losses incurred in late 2008."
Riccitiello's resignation comes, apparently, on his own freewill citing these very losses. He was appointed CEO in 2007, but regardless of whether the company's lack of profitability comes from poor investments, poor decision making, or just poor timing is irrelevant. In a message to EA employees, he accepts total responsibility and holds himself "100 percent accountable." In his tenure, EA has made a notable shift from publishing digital games for PC and mobile devices than more expensive packed discs playable on living room consoles (i.e. Xbox 360, PlayStation 3, and Wii). The company purchased mobile and social network developer, PopCap Games, for $1.3 billion and PlayFish Ltd. for $275 million. This attempt to reposition the company alongside of its most lucrative subdivision, EA Sports, unfortunately wasn't enough to keep EA's revenue from dropping 23 percent over the last three months.
Looking ahead at what to expect for the rest of this year, it becomes more clear as to why EA is suffering from falling short of gamers' expectations. "Dead Space 3" sold under what was anticipated. The company recently released "SimCity" will be releasing "Army or Two: The Devil's Cartel" and possibly "Battlefield 4" on March 26. Are there any EA games people can be excited for this year?