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Opinion: The Sad Ending To EA's 2008 Narrative

Electronic Arts looked to be truly in the midst of a spiritual turnaround this year, garnering cautious optimism from an audience that once demonized it. Yet the kinder, gentler EA couldn't make its numbers this year -- Gamasutra news director Leigh Alexa
[Electronic Arts looked to be truly in the midst of a spiritual turnaround this year, garnering cautious optimism from an audience that once demonized it. Yet the kinder, gentler EA couldn't make its numbers this year -- Gamasutra news director Leigh Alexander reflects on one of the year's most complex stories.] I ultimately followed Electronic Arts more closely than any other company this year. Part of this is due to their media strategy -- most publishers of their tier don't tend to do biz interviews with the games press as often. It's also because I was personally interested in the story there, as I think a lot of people were -- this publisher we were so accustomed to demonizing seemed, to all appearances, to be not only gaining a soul, but to be aiming to make amends. Obviously, business is business, and I am imposing a "personal narrative," as CEO John Riccitiello said people liked to do around the EA-Take-Two saga, which I also covered quite closely. Still, as we watched EA this year make what appeared to be a genuine attempt to raise its quality bar, diversify its portfolio with what Riccitiello called "creative risks" and talk a lot about investing in new ideas and new IP at the expense of short-term profitability, it was a heartening narrative for anyone who's a fan of games, especially alongside comments from EA's peer companies about eliminating "franchises that don’t have the potential to be exploited every year across every platform." Exposition, Rising Action "I can't believe EA is actually the one to be doing things right," one of my colleagues said to me at some point during this year, probably around the time the company scored a partnership with Goichi Suda and his renowned Grasshopper Manufacture, a move that surprised everyone -- and delighted many. "Whoever simultaneously publishes id and Valve games has my vote," a commenter wrote on the E3 interview with Riccitiello I conducted for consumer weblog Kotaku. "EA's definitely won me back over," agreed another. I think that many agree that even if Mirror's Edge, for example, was not executed well, the effort itself was appreciated, and surprising from EA. All in all, it was a happy narrative for the company this year -- the problem is, it didn't work. You probably already heard the recent news -- EA said its holiday portfolio just didn't sell as well as it needed to, and that coupled with other economic factors, like cautious retailers keeping smaller inventories, the company won't make its numbers. Analysts came down on it hard. A kinder, more creative EA does not make money. Climax, Or Turning Point Now, to get profitability back up, it'll have to cull some of those creative risks from its portfolio next year and focus more on maximizing the proven hits. It plans to move further into online business models, like subscriptions and microtransactions, too. Many of EA's fellow companies are eyeing the same strategy, but when EA does it, it'll no doubt bring ragging on EA back into fashion among the internet community. There's no "close but no cigar" award in enterprise; investors don't buy stock for any other reason besides profitability, and a company is a business entity, not an identity with a moral mandate -- although many, including EA, are often successful at marketing themselves that way. What's disappointing is that I agreed with my colleague -- DRM scandals aside, EA did seem to be doing everything "right," according to the things that gamers as a community say they value. The company's goals were inspiring, and whether or not you liked its games this year, whether or not they had design problems and whether or not they were reviewed well, that in and of itself was respectable. And it's perplexing to me that the things we respect are not the things we reward with purchases. Of course, that's been the story of the games business for many years. We've seen excellent games go unrewarded, we've seen talented studios go bankrupt, and we've seen beloved online games close because the numbers just weren't there. "You don't make games profitable on purpose," Riccitiello told me this year. "You make great games first, and then they are profitable." "I think that trips up a lot of companies... even EA, at different times, when a company is seeking to make purely a profitable game. Frankly, even when EA was at its peak at the last cycle, we didn't talk a lot about profitability as a goal." Apparently, EA is going to need to start talking about it again. Falling Action, Denouement However, the moral of this narrative, one supposes, is that effort doesn't always translate into excellence -- perhaps, despite its most earnest endeavors and its healthiest attitude, EA's games genuinely weren't good? Yet how do you explain the quantifiable measure that Riccitiello offered yesterday as evidence that indeed, most of them are? 17 of the company's titles scored 80 or above on Metacritic this year, as opposed to 7 of the same last year. To be fair, EA did release more games this year than last, but nonetheless -- 17 titles score over 80, and you can't score strong sales? Do we not want the things we say we want? This means that either Metacritic is useless as a measure of quality and product desirability (if so, then what's it for?), or that consumers don't care as much about quality as EA thought they did. Theoretically, then, the consumer that doesn't demand technical excellence would buy on innovation instead -- but if that consumer was dominant in the market, Mirror's Edge would have done just fine. Either way, the relative failure of EA's portfolio this year doesn't make a good deal of sense at face value, and what EA learns from its road back from this stumble will be educational to all of us, I'm sure. The pessimist can predict the lesson that the rest of the industry will take from this is that "new IP doesn't sell" and "gamers don't want innovation," but I hope that's not the case. As a journalist I obviously don't professionally prefer one company over another. But as someone who loves video games, I just wish this personal narrative had come to a happy ending. Finally, I'd like to remind Gamasutra commenters that, regardless of your feeling about a company, when things like this happen, people get fired, during a period when it'll be especially challenging for many to find new jobs. Please show some respect and civility in your comments.

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