'EA is in the wrong business,' ex-exec Lasky blogs

Former Electronic Arts executive Mitch Lasky, who is now a member of venture firm Benchmark Capital, is not holding back his thoughts on the current financial turbulence at EA. Once EA's executive VP of mobile and online, Lasky now writes on his personal blog, "EA is in the wrong business, with the wrong cost structure and the wrong team, but somehow they seem to think that it is going to be a smooth, two-year transition from packaged goods to digital."

Strictly from a business perspective, Lasky lays out what he sees has gone wrong at EA, noting that in February of 2007 he made the argument to the former EA CEO that the company needed to cut $200 million annually by "reducing headcount and cutting back on ridiculous expenditures on risky titles" like Spore, Godfather and The Simpsons. He also advocated for "hyper-aggressive [research and development] investment and acquisitions in a transition to digital distribution and games-as-service." EA is starting to make such a transition, as seen in the publisher's strong iPhone and mobile sales, along with its dabbling in Facebook games. On the other hand, EA's MMO track record has been a legacy of failure that includes Earth & Beyond, The Sims Online and (sorry) Warhammer Online -- but perhaps Star Wars: The Old Republic will change that.

Given that EA's current value is so low (by billionaire's standards), Lasky finds it incredible that nobody has stepped in and scooped up the company for a bargain, noting that "Disney has been looking at them since I was at the house of the mouse back in the early 90's. And there are Chinese companies, like TenCent, that could easily swallow EA whole."

[Via Big Download]

Reader Comments (65)

This was one of the assholes responsible for the Bad Old Days at EA. Every good franchise starts off as a risk, buddy. EA's management tried to repeatedly cancel the first Sims game, and look what their biggest moneymaker is now. If you don't take risks, you don't reap the rewards - and there's a limit to how many times you can rehash the same series until people just don't care anymore.

You can rehash a franchise forever. At some point, you have to develop new ones. What happens to Activision when GH sales wane? Or Call of Duty sales? Madden sales have declined for EA. Its got to establish a few new franchises. Sometimes it takes a few titles to get it going too. AC2 was a great second stab (hehe) at the franchise.

Says the Gambler.

Fo shizzle.

The decline in Madden sales has been focused on. It doesn't help that they only have two real Madden consoles this generation, compared to three last gen. And the most prevalent console just isn't working for EA with Madden.

The key is that Assassin's Creed 1 did well in sales, too, though. It made Ubisoft money. It's only problem came in critical reception, and even then that was a mixed bag, and that's where AC2 really improved (though sales too). Dead Space and Mirror's Edge lost them money.

Nobody bought Madden on the Gamecube last gen either, if that's what you mean by the third console.

samfish is right, there were only really two "Madden consoles" last gen, too. GameCube certainly wasn't the system you bought Madden for if you had any other console.

Why hasn't Acitivision hire this guy yet?

The last thing Activision of all companies need are more people like this guy.

Well hopefully TenCent still makes Dead Space 2 and Mass Effect 3.

Other than that I could care less about EA

"...but somehow they seem to think that it is going to be a smooth, two-year transition from packaged goods to digital."

This is a telling statement. Unfortunately another pointer towards the end of physical media.

I hate the idea that it has to be one or the other. There are markets for both and they can easily co-exist like they do now.

It just scares me to think that EA is in a position where someone else could BUY THEM. I'm so used to years of hating them for gobbling up developers/small publishers left and right... but if EA were to be bought out by someone else... that could be even worse!

Seriously, though... Their recent stroke of games has caused me to buy my first EA games since... ever. It's a shame, though, that their more creative strides are not paying off for them.

"Transition to Digital Distribution" This coming after a recent study shows that most gamers still purchace physical copies of games. I'll admit that as far as PC games go, I am pretty much all digital download, but untill they release affordable 1TB+ HDD for consoles, I would rather build my console game library up the old fashioned way. I have the 120GB HDD for my 360 and the 80GB PS3, and both of them are already over half full just from DLC alone (thanks mostly to Rock Band 2). Plus the mention of "Games-as-service' scares the crap out of me just as it should every other gamer. I think we all know that the dream of publishers would be to end one-off sales and instead institue subscritptions where we have to keep paying monthly if we want to play the games that we used to just buy up front (think STEAM with paying $30/month in order to access the games that you have downloaded). Plus, what is the push that all these publishers have with mobile phone games and Facebook "games". If the Wii has proven anything, it's that casual games does not always equal fun games. The cheapening and downward slide of quality electronic gaming is making me very sad.

'EA is in the wrong business,' ex-exec Lasky blogs

Reader Comments (65)

Posted: Jan 14th 2010 2:28PM (Unverified) said

Posted: Jan 14th 2010 2:45PM ScottG13 said

Posted: Jan 14th 2010 2:48PM Dao Jones said

Posted: Jan 14th 2010 2:49PM ScottG13 said

Posted: Jan 14th 2010 2:50PM (Unverified) said

Posted: Jan 14th 2010 2:56PM Mr Khan said

Posted: Jan 14th 2010 2:57PM samfish said

Posted: Jan 14th 2010 3:01PM Mr Khan said

Posted: Jan 14th 2010 2:45PM Joeybeast said

Posted: Jan 14th 2010 2:58PM samfish said

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Posted: Jan 14th 2010 4:01PM Professor Lario said

Posted: Jan 14th 2010 4:12PM CaramelZappa said

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Posted: Jan 15th 2010 2:50PM Otakuon said

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