John Riccitiello did not mince his words about the performance of Electronic Arts over the past year.
“This outright pisses me off,” said the chief executive at EA’s analyst day today, referring to a graph showing a three percentage point loss in market share in 2007.
He said he was even more annoyed by the downward trend in the quality of EA games – the average rating per title supplied by Metacritic has fallen from 77 to 72 over the past five years.
The company also bet on the wrong horse in the next-generation console stakes – favouring development for the PlayStation 3 first, which proved problematic, over the Xbox 360 and lastly the Wii. Wrong call, he said, as was the overinvestment in its Renderware middleware that caused slippages.
And then there was the bloating of headcount by 3,000 in three years and development costs increasing to the extent that they were the equivalent of nearly a third of revenues.
Three major franchises also disappointed with sub-standard iterations causing slumps in sales for the Need for Speed racing game, NBA basketball and Harry Potter.
Of course, it’s easier for Mr Riccitiello as an incoming CEO – he succeeded Larry Probst a year ago – to admit the company has made mistakes and wipe the slate clean. But his candour was refreshing nevertheless.
His vision for the company was also invigorating. He has set goals of $6bn in revenues in 2011 and metacritic scores of 80. Outsourcing and offshoring will bring down costs and two campuses have already been closed.
He said he was unconcerned about the merger of Activision and Vivendi’s games unit to create the largest publisher later this year.
“It’s really a non-event,” he said, arguing it would not make EA any more aggressive.
“We’re already at max tilt, we have been changing a lot, we are our own worst critics.”
He told analysts he had given an earlier version of his presentation to 225 top EA executives last August.
“It was brutal,” he said.
