While EA games had a tremendous year in terms of sales — a total of 15 games went double platinum, fiscal year 2008 brought about losses of $454 million, compared with profits of $76 million in 2007. The period, which ended on March 31, 2008, saw the company’s total revenue rise 19% from last year up to $3.67 billion. In the fourth quarter alone, there was an 81% jump in revenue to $1.13 billion, according to GI.biz.

“A year ago, we committed to an aggressive change agenda at EA,” said CEO John Riccitiello. “Our employees stepped up to the challenge and we finished fiscal year 2008 with non-GAAP revenue up 30 per cent to USD 4 billion - a record for any third-party publisher. Our operating margins were flat to our prior year.

“On balance, we’re very pleased with our revenue growth, but not yet happy with our profit margins. In fiscal 2009, we expect to deliver another USD 1 billion in revenue growth and to double our operating profit on the strength of our slate of titles.”

I don’t mean to toot my own horn, but this is exactly what I meant when I’ve claimed that Riccitiello coming to the helm at EA was a good thing for gamers. He’s committed to getting EA back into the business of not just quantity, but quality of games.

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I hate the “PC gaming is dead” discussion as much as anyone, save for maybe Jeff Green, so I do enjoy seeing the counterarguments that just slap proponents of “PC gaming is dead” square in the face.

Cue Electronic Arts CEO John Riccitiello, who has stated that the PC gaming market has in fact been growing for several years, even if the retail numbers don’t reflect that.

“I certainly recognize that the box-side [retail] of PC is soft. It’s been soft for some time,” Riccitiello said during a conference call Q&A with analysts.

“Frankly, if it were not for The Sims and World of Warcraft PC box sales, it’d be a pretty dismal sector.”

While that might be the case, it won’t stop EA from supporting the PC and its many new(er) revenue streams, such as online subscriptions.

“One thing EA tries to look at is the total business that’s represented by PC game software. And we’re seeing a growth business there. In fact, it’s been growing for several years.

“It’s just been categorized wrongly by looking simply at the box-side of the equation.”

Certainly the most interesting experiment of EA’s in the PC gaming space is Battlefield Heroes. You don’t really expect a major publisher that is mainly concerned with their bottom line to take a risk like they are with Heroes, but if it works out, it could signal a major change in the industry.

via Next Gen

Electronic Arts has been criticized in the past for its handling of development studio acquisitions, and rightly so. More recently, particularly since John Riccitiello came to the helm, things seem to be much better, but that didn’t stop Activision CEO Bobby Kotick from taking a shot at its main rival in a recent interview.

When asked about what the key has been to the growth of Activision, Kotick said, “It’s about really being considerate of the culture in the game studios that Activision buys. That’s the biggest difference between us and any of our competitors. We built a model that celebrates entrepreneurial, opportunistic, independent values.”

But, presented with the opportunity to bash EA, he added, “It’s almost the opposite of Electronic Arts, which has commoditized development. It did a very good job of taking the soul out of a lot of the studios it acquired.”

Kotick wasn’t able to comment on EA’s attempt to purchase Take-Two, but I can easily imagine what he would have liked to been able to say. Can you say “Monopoly”?
via GamesIndustry.biz

Last week, Electronic Arts CEO John Riccitiello spoke with the New York Times about his company’s offer to acquire Take-Two. He stated that he had not spoken to Rockstar, but claimed that he could make a case for how EA would offer a stable company that could help expand their audience. He even went so far as to say, “We, in many ways, represent a white knight.”

GameDaily spoke with several analysts to get their take on Riccitiello’s comments. Janco Partners’ Mike Hickey was clearly the most strongly opinionated of the bunch, stated, “My belief is Rockstar would be perfectly happy if EA never put a bid in at all. White knight commentary is total bull****, and disrespectful to both the developers at TTWO and the new management team that has already achieved success.”

David Cole of DFC Intelligence doesn’t believe Rockstar is exactly in dire need of help. “I would think with how successful the GTA games have been the issue hasn’t been getting them to a wider audience. The issue is really more about shareholder value and whether EA is a white knight for Take-Two shareholders by offering to pay them the maximum value they feel they can get,” he said.

My archnemesis, Wedbush Morgan Securities’ Michael Pachter, had a different perspective on the matter. “‘White Knight’ usually signifies rescue from a hostile suitor (the connotation is to a damsel in distress). I think Riccitiello’s use of the term was incorrect, and perhaps a misplaced attempt to sound clever. They are in no sense a White Knight.”

Pachter added, “Yes, Rockstar could go it alone, but they don’t own GTA. TTWO owns the IP, and it passes to whoever controls TTWO stock.”

What do you make of Riccitiello’s comments? Are they arrogance or insolence? I believe Pachter is most likely right, because it simply doesn’t make sense – Rockstar isn’t having trouble, so what exactly would they need to be rescued from? And while I do believe there’s a hint of arrogance to what he said, it’s more than likely just a tactic to convince shareholders who might not know any better.

Despite Electronic Arts’ acquisition of Pandemic (along with BioWare) back in November, co-founder and president Josh Resnick says that the company still feels like it’s independent. He told GamesIndustry.biz, “It says Pandemic on the box, we’ve got Pandemic email addresses and we’re making Pandemic games.”

It’s an important declaration for Resnick to make, with an EA takeover of Take-Two looming. Ken Levine has stated previously that he wasn’t concerned by all the talk of acquisitions, but that doesn’t necessarily reflect the opinion of other big name individuals and teams under the Take-Two umbrella, such as Sid Meier and the entirety of Rockstar Games.

“John [Riccitiello, Electronic Arts’ CEO] has said that in the past interfering with the internal studios hasn’t worked for them,” Resnick said. “That’s not the model that EA is now following.

“The model now is to trust your talent, support your talent, give them what they need to do and let them tap into what EA has to offer, which is the fact that they are the best publishing organisation in the world.

“It just doesn’t make logical or business sense for them to change a development studio like that. John and all of the executives at EA have very loudly said that in public. They want to empower their creative talent.”

Certainly sounds like a vote of confidence from Resnick in EA and Riccitiello’s methods. I’ve previously stated that Riccitiello is the type of guy that gamers would want running a company like EA, and so far, it sounds like that has proven to be the case. We’ll see what happens if – but more likely when – Take-Two becomes property of EA.

Never one to be swayed, Electronic Arts has taken another step towards acquiring Take-Two by making a tender offer for all outstanding shares of common stock in the company. The offer is for $26 per share, amounting to a total of $2 billion, which is a 64% increase over where Take-Two’s stock was sitting the day prior to EA’s initial offer to buyout the company according to GamesIndustry.biz.

“This is a great opportunity for Take-Two shareholders,” said CEO John Riccitiello. “We believe Take-Two investors will see our tender offer as the best way to maximise the value of their investment in Take-Two.

“This tender offer provides a clear process to complete the proposed transaction. For EA shareholders, the combination would add additional intellectual properties to our already strong portfolio and welcome Take-Two’s talented creative teams to the great development organisation we’ve built at EA,” he added.

The offer is open until April 11, which still would give EA several weeks of wiggle room prior to the release of Grand Theft Auto IV. Even if this doesn’t manage to get EA into the position they want to be, don’t believe for a second that this is their last attempt at acquiring the company.

Meanwhile, I remain extraordinarily concerned about what will happen to franchises like NBA 2K if and when they acquire Take-Two. You already killed the best football series, EA – don’t do it to the best basketball one, too.

The days of 30 Madden frames per second are not entirely behind EA, as John Riccitiello noted during last week’s Q3 financials conference call. He said that strides have been made, but the problems encountered while developing on the PS3 haven’t been completely solved.

“Games where we led development on the PS3 platform, like Burnout, which is doing very well on the market today, we had no issue at all,” he said.

“But in circumstances where we either led on the Xbox 360 or ran parallel production, for the most part, we’re still experiencing some delay on the PS3. It’s a little bit more of a challenging development environment for us.”

He stated that there is still catching up to be done, but one has to wonder – if this is the case, what is the advantage of making Xbox 360 the lead platform? It boggles the mind.

via GamesIndustry.biz

Another announcement to come out of EA’s recent conference call regarding Q3 earnings was that both Mercenaries 2 and Battlefield: Bad Company have been delayed into fiscal year 2009. In other words, the soonest either title will come out is April 1, 2008.

“We’ve made the decision to move Battlefield: Bad Company and Mercenaries 2 into fiscal 2009,” said John Riccitiello, CEO of Electronic Arts. “Both titles are looking great, and we believe with additional polish, we will build a better consumer experience and thereby maximize our economics.”

Riccitiello made it very clear that he would be willing to delay titles to ensure that they were high quality – something gamers will certainly appreciate, especially from a company like EA that is normally pegged as pushing things out the door to make money.

via 1UP

For its third fiscal quarter, which ended on December 31, EA posted a net loss of $33 million, compared with a net income of $160 million during the same period the previous year. Despite this, the company saw a 17% increase in revenue compared with the previous year, from $1.28 billion to $1.5 billion.

“This was a record revenue quarter for EA and the single biggest revenue quarter for any third party publisher in our industry,” said CEO John Riccitiello.

Riccitiello went on to say that “short-term pain” is necessary for the company to enhance the quality of internally developed titles. He also said that he’s willing to delay titles to ensure higher quality.

“While we are the third-party quality leader we are not satisfied with where we are,” said Riccitiello. “We did not have any internally developed breakaway titles and no one of EA’s internally developed titles reached a Metacritc rating of 90 or greater.

“This hit us particularly hard in North America where EA faced tough competition on a number of fronts. In North America, excluding EA Partners, our business was essentially flat in a very robust market.

“As anticipated, our calendar year shares were down. Although we hit our numbers and anticipated our share losses, losing share is just not acceptable. Rebuilding share is a top priority.”

And almost as if he was trying to give me a quote to back up my claim that he is the guy gamers would want in charge of a company like EA, he said, “When I came back to EA I made a commitment to investing in quality, both because I think it’s the right decision for the long-term financial health of the company and because it is what our consumers have a right to expect.”

via GamesIndustry.biz

It was inevitable, but finally we’ve gotten confirmation that Rock Band will be coming to Wii. The announcement came way of an EA conference call, which unfortunately made no specific mention of a release date other than to reference the release as “the coming launch.”

EA CEO John Riccitiello said during the conference call:

In terms of pacing the next few quarters, you’re probably well aware of the more than $2.5 million music downloads that have occurred on Rock Band, and that’s a good part of the business. But what is probably the most interesting pieces right now is the coming launch on the Wii, the continued sale of the core platforms in North America and then the fiscal ‘09 launch across Europe against all of the SKUs. So frankly, for the balance of our Q4 and the first half of fiscal ‘09, Rock Band’s a key focus.

This is terrific news for those of you who only own a Wii. One has to wonder how the downloadable content scene will be handled with this version of the game – or if one will even exist.

via 1UP

The Federal Trade Commission anti-trust regulators have cleared Electronic Arts’ $775 million purchase of VG Holding Corp from Elevation Partners.

The Associated Press is reporting that the deal is included on a list of transactions that received an “early termination” of their antitrust reviews.

The purchase of VG Holding by EA actually shouldn’t be such a surprise to anyone. Elevation Partners was founded by former EA president John Riccitiello in 2004. EA, under Riccitiello who is now CEO, had already acquired majority stakes in VG, parent company of BioWare and Pandemic, in 2005.

via Gamasutra

EA has long been looked at as the monster who just keeps popping out sequels year after year in an effort to eventually get to the point where they could simply print money as needed. But new CEO John Riccitiello has been trying to shift the company’s focus, and EA Mythic’s Mark Jacobs believes that shift includes focusing on releasing higher quality games, and “games that players really want to play.”

Speaking with Eurogamer, he stated that EA’s new philosophy included “talking to the community, getting their feedback, and being involved.” EA Mythic delayed their Warhammer MMO earlier today, which Jacobs says was due to feedback received from players in the beta.

Jacobs also showered praise on EA for allowing Mythic, among other studios owned by EA, to “make great games.” I should hope that’s what EA would want.