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To say that EA has had a rough 2013 would be an understatement; a more accurate description for Q1 would be “complete train wreck”. Whether you haven’t been following the gaming giant’s struggles or simply enjoy a case study depicting how to run your business into the ground, sit back and enjoy The Meltdown of Electronic Arts: A Tragedy in Five Acts.
Our story began in early March. EA had just released SimCity 5, and what should have been a successful product launch turned into a PR nightmare when the servers were overcapacity and couldn’t handle the millions of users trying to play. This wouldn’t have been much of a problem had EA not specifically taken away the offline mode, forcing users to try their luck with the servers or not play at all. How did they compensate angry fans? Here, play “Plants v. Zombies” for free.
The disastrous release culminated in the firing of CEO John Riccitiello. The company explained that his reason for leaving was that he’d missed multiple financial targets and (according to VentureBeat) wasn’t able to move EA into the modern gaming world. EA is facing the same challenge as the music and newspaper industries, people no longer hold physical copies in their hands, they want everything online and they want everything for free. Many competitors have fallen by the wayside but EA is still trying to stay on top and create modern products.
So, what was EA’s plan to make it back to the top? “Streamlining their operations,” aka massive layoffs. The Quebec office was the first to feel the pain of cuts, as two-thirds of its staff was laid off last week. TechnoBuffalo estimates a loss of more than 200 employees. Most of the layoffs were directed at the mobile division, which is bizarre considering the vast movement towards all things mobile.
The Quebec firings last week we’re only scene one of the third act. Scene two takes place in Galway. EA is shutting down the customer service center in its Ireland branch, a loss of about 20 employees. While this number isn’t as harsh as the 200 in Quebec, it’s a larger disappointment to the country of Ireland, who EA had promised the creation of 300 jobs.
Shortly after EA announced the decimation of its mobile department, it decided to cut back on social media development. Because who really uses smart phones and social media these days anyway?
In a blog post published this morning, EA explained its decision to retire The Sims Social, SimCity Social and Pet Society from Facebook. The number of players has dropped significantly, and it’s not worth it for EA to keep them running. The blog post explains that their competitors have also pulled their games, which shows how EA isn’t actually moving ahead and adapting, but rather, falling behind and following.
EA needs a leader who can bring gaming into the 21st century. It needs to cut its staff wisely. It needs to create high quality products that will keep its users loyal. Grasping at straws won’t keep EA on its feet; much less help it lead the pack. This final act is unwritten and will be played out for the rest of Q2 and possibly 2013. Can they turn this Greek tragedy into a comedy?