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Stark Contrasts Article
Article by Rob Fahey
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Published as part of our sister-site GamesIndustry.biz' widely-read weekly newsletter, the GamesIndustry.biz Editorial is a weekly dissection of one of the issues weighing on the minds of the people at the top of the games business. It appears on Eurogamer after it goes out to GI.biz newsletter subscribers.
Cutting 1500 jobs is not a news story that's ever going to be spun in a positive way, but for Electronic Arts, the timing couldn't possibly have been worse. The industry's former 800-pound gorilla, which has been looking less and less like the pack alpha for several years now, was forced to announce the wide-ranging job losses in a week when the contrast is starker than ever.
As EA's staff nervously wait to discover if they need to pack up their desks, rival Activision Blizzard is popping champagne corks over the unprecedented success of Modern Warfare 2, a game which has taken home around half of the worldwide gross of record-breaking movie Titanic - in a single day.
What is happening at EA is the latest chapter in a long-run and complex narrative, with its roots way back in the middle of the last console generation. For years, the company has had a serious problem right at the heart of its financial situation. Turnover rose slowly or not at all for several years, while costs escalated. Profits and margins were squeezed. Even while EA still dominated the boxed games market, it found it increasingly difficult to actually make decent money.
In part, this problem was attributable to EA's internal structure. Big, bloated and inefficient, the company suffered from an excess of management and unhealthy internal politics which implicitly encouraged middle managers to build and jealously protect fiefdoms within the company, rather than working collaboratively.
EA's scale became a millstone rather than a competitive advantage, with the wheel being reinvented time and time again by different teams. When top management occasionally intervened, frustrated by the lack of progress on technology and knowledge sharing across the company, their interventions tended to be poorly chosen, lumbering the company with weak technologies chosen for political rather than technical reasons.
Meanwhile, the company found itself increasingly slipping away from the dream of being the new Disney which former CEO Larry Probst had talked about so enthusiastically in interviews. Its studios were embroiled in the year-on-year race to push licensed IP out the door, and self-owned IP development ground to a halt.
A development culture which gave tacit approval to the ill-advised "throw more people at the problem" approach meant that teams working on new IP were regularly cannibalised in order to shove licensed games out the door in time, which did nothing either for the quality of the licensed titles or for EA's own storehouse of IP. Worse again, studio acquisitions - which could have shored up the company's ability to generate IP - were uniformly disastrous, with EA's management unable or unwilling to leave the creative teams alone, and slaughtering whole processions of golden egg laying geese.
This is the company and the corporate culture which faced John Riccitiello when he rejoined the firm in 2007, and each of his changes he has made since then - including this week's massive restructuring announcement - can be seen as part of a continuing narrative in which he fights to reposition a company whose industrial inertia shrugs off any attempt at subtle change.
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Comments: 1-29 of 29 in total
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+4
Great article. From a users perspective we see a good engine one year (burnout Criterion) and then the following year other EA studious make an a~'?? out of another racer.
It always seems like EA1 does not share with EA2 etc, which we see every face off on 'some EA titles'.... if they all shared and worked together then dev costs would be less and maybe they would make better games...as they could concentrate on polishing Sectioning off the divisions may help innovation, but does it help tech advances ? You would think they would create a central engine division taking the best from around and have them responsible furnishing the best engine for the game type to each developer.... Then every racer would be technically same or better than burnoutP and every shooter better than BattlefieldBC....?
Edited 3 times,
most recently on 14/11/09 @ 08:52
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+12
I do like the fact EA really have been trying at least a bit. Dead Space and Mirrors Edge were stabs at something a bit different, and they even seem to be making an effort with established IPs like the latest Need for Speed.
I certainly respect the conpany a whole lot more now than I did only a few years ago, I had no idea this might relate to internal politics. Nice article :)
Edited 1 times,
most recently on 14/11/09 @ 10:10
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Stepharneo
14/11/09 @ 09:47
+10
@DFawkes
Don't forget their inspiring attitude to updating Burnout paradise, they made a good example of DLC and the way they stuck with the game so long after release, unlike a lot of companies who release a game with expensive DLC on day one and never again. |
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Stegofreak
14/11/09 @ 11:39
0
First of all, excellent article. Really informative and puts economic facts behind what could be seen from a gamers perspective for years and I must second DFawkes statement that "I certainly respect the conpany a whole lot more now than I did only a few years ago."
EA have some great development studios and teams under their umberella at the moment (DICE are one of my favourite teams) and a lot of future success relies on the company as a whole keeping their grubby hands off what their working on. While I agree that studios could benifit from sharing technology and information wouldn't there be the possiblity of certain studios being relied on to make advancements while others will just port it to their games at a cheaper cost. That's something that seems to have happened with Infinity Ward/Teyarch in the Call of Duty series. When a new CoD game hits the shelves I tend to expect more of an advancement from an IW game. |
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+7
EA are still a powerhouse, and even their "me-too" GoW/DMC/NG clone Dante is showing a richness of content unusual for a game even I derided for being unimaginative and derivative when it first appeared. Mirror's Edge simultaneously demonstrated the daring imagination at DICE and their inexperience with single player experiences.
What will really tell us if EA has changed is if they can show that they can learn from their mistakes (i.e. what were they thinking with some of those release windows in crowded times?) |
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trooperdx3117
14/11/09 @ 13:25
+1
Your forgetting that back on the xbox Pandemic were well respected, they made the two Star wars battlefront games, Full spectrum warrior and the original mercenaries all of which were great games. Now though they seem to have made a poor transition to next-gen consoles with both Mercs 2 and Lord of the rings conquest being utter pish.
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freakzilla
14/11/09 @ 16:02
+2
I admit I'm not too good with business tactics (even if I do find it very interesting) and that I am in no position to judge what impact this man's decisions will have on EA, but I can confidently say that he has at least earned the respect of many "core" gamers.
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YourMessageHere
14/11/09 @ 18:08
+3
Firstly, what is all this stuff about upstream and downstream? Everything else makes sense, but this is unknown to me. Industry jargon for 'casual' vs. 'hardcore'?
Secondly, why did this internally internecine situation arise in the first place, and why didn't anyone do anything about it until Riccitiello came along? It can't just be me who can see inside about 0.04 seconds that having divisions of a giant company fighting each other and not sharing expertise and resources is a really stupid way to carry on. @ retrend Honestly, what's the matter? I can't really find any fault with this article, to me it's interesting and insightful. What's so bad about it? |
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ryandsimmons
14/11/09 @ 21:25
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@Your MessageHere
Just have a look at Sony for the best examples of intracompany fighting. The music, tech and games divisions are always fighting, to the extent that the company has in effect sued itself several times over issues such as music and cd burning hardware. |
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freakzilla
15/11/09 @ 00:52
0
I think this is the same stuff that brought Sony Erricsson to their knees, when the new CEO came in he talked about how different groups within the company where getting really competitive and were unwilling to work together.
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+1
Firstly, what is all this stuff about upstream and downstream? Everything else makes sense, but this is unknown to me. Industry jargon for 'casual' vs. 'hardcore'?
You can think of it in terms of "committed" and "less committed" gamers, I guess. Casual and Hardcore aren't terribly useful labels in themselves - most hardcore game players actually also play plenty of casual games, and there are lots of people who mostly only play casual games but are deeply committed to the hobby. Meanwhile there are quite a lot of people playing hardcore games who actually aren't very deeply involved with gaming, don't spend much and are hard to covert over to buying other products - a lot of WOW players fall into that category, as do lots of sports game players. Rather than dividing consumers up by what kind of games they like to play, which is mostly playground stuff to be honest ("ugh, casual gamers, ruining our hobby, blah blah"), it's much more useful to divide people according to how devoted they are to the pastime - so someone who plays a lot of Wii games and iPhone games is, in this sense, more "upstream" than someone who plays WoW or FIFA but doesn't engage with other things the games industry has to offer. Downstream gamers would probably bail out of gaming if their finances got tight, whereas the upstream guys would sacrifice other pastimes in order to continue affording games. I'm not sure who coined the terms originally, to be honest, but I like them a lot better than "casual" and "hardcore", which usually seem to be used as perjoratives rather than as useful ways to describe consumer groups, and which ignore the massive variety of different tastes gamers often have. |
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0
EA have definitely improved their PR recently. That action against Langdell's trademarks was motivated in large part by self-interest, but timed and positioned perfectly to win the company goodwill.
But at least they nowadays have the games to back it up. As long as the EA logo keeps appearing on games like Mirror's Edge, Dead Space, Brutal Legend and Mass Effect 2, they can have my goodwill. |
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notmyrealname
15/11/09 @ 16:30
0
''Cutting 1500 jobs is not a news story that's ever going to be spun in a positive way''
conflicting statemetns in the rest of the article then? Depends on how you look at it. If I where a shareholder I wouldnt mind EA cleaning up their act a little on the massive rise in overhead. It sucks for the people sacked but from a business perspective it makes a lot of sense. |
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0
I look at my collection of EA games, mostly 360: Burnout Paradise, L4D, Orange Box, Fifa 10, Fight Night 4, Boom Blox 2 (Wii), Tiger 10 (Wii), Battlefield 1943 and Mass Effect. There are some Valve games and a lot of sequels but they all have EA on the tin.
The average metacritic score is a smidge below 89. The pessimistic part of me thinks that EA are a bunch of corporate whores who want to make money. Yet since they seem to have figured that making really good games is the best way to achieve that, I wish them all the best. |
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Collymilad
15/11/09 @ 19:41
0
I hope EA do well.
I wouldn't say their games are average if you take out the sports ones. All I know is they gave us Dead Space and Mirrors Edge (two of the most underrated and underappreciated games of 2008)
Edited 1 times,
most recently on 15/11/09 @ 19:42
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-1
Excellent article, very imformative - hopefully these moves will help EA to rebuild/reform into a much better company - would just like to add that hopefully they will now learn that they need to support the end user with decent patches that actually fix the products they release (In a decent timeframe and not months down the line) The bugs/glitches/bad coding that are apparant in some games is absolutly shocking examples include the NFS Undercover framerate on the Xbox and PC for a start - dont get me started on command and conquer 3 xbox control system!
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0
You know what tho, all signs seem like they're pointing to another videogame crash like in 1977, considering how the market is becoming so flooded with software, but i suppose the industry is so much bigger and mainstream that there's probably no realistic chance for a crash, possibly a recession tho.
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0
@macmurphy
you know whats going to happen, activision is going to realize that they're the new EA then probably focus more on quality then EA will probably feel as if they're lacking profits and become its formerself. Then the cycle happens over again.... both corporations are greedy and the CEOs have always made it their intention to bleed consumers dry until eventually consumers become so fed up that the industry goes into a recession. |
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YourMessageHere
17/11/09 @ 13:24
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Thanks, Shinji, that clears that up. I dislike the terms 'casual' and 'hardcore' too (hence the inverted commas) and I understand the sense behind using these terms instead, but I'm not sure how useful upstream and downstream are either; is there actually any point in trying to divide people at all? It's hardly as if people talk about upstream and downstream books or TV programmes, after all, and yes, they are different media, but in this context I don't see how the interactivity of games has any bearing on how easy they are to get into compared to any other pastime, and how consistently they provide what the consumer wants. What is the point in making products designed for a demographic that you perceive as liable to simply disappear at any point - what other industry does that? Why not treat all games as upstream, and aim to create and keep customers?
And come to that, when this is a label for consumers, not games, how can you call a game upstream or downstream? What is MW2, upstream or downstream, or both at once? What about WoW, or Mario, or MGS, or Halo? How can IP (ugh, hate that phrase) be upstream or downstream in nature? That concept implies that there is some set of ideas that is guaranteed to be a hit with committed gamers but not uncommitted gamers, or vice versa. Look at all the really successful games and it's instantly clear that they are popular with both upstream and downstream groups. Finally, why is it ever a good idea to ignore differing tastes? I only ever play PC games, and I will not play console games, I am poor but willing to pay for quality, I don't play sports games, platformers, beat-em-ups or any kind of fantasy game, and I like realism, guns, meaningful choice and consequence systems, and narrative-led games. This, and not how committed to gaming as an industry overall I am or am not, is the pertinent information for the industry; tick those boxes and I'll like as not buy the game. However, I dare say some marketing executive would look at that information, tell me I'm downstream because I don't buy lots of games on all the fashionable platforms, and lump me in with Granny Kuwashima and her DS or something. Where has that gotten anyone? |
Comments: 1-29 of 29 in total
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