Today Electronic Arts (EA) announced that its CEO John Riccitiello is stepping down as CEO, and will leave its board. In his stead, Larry Probst will run the company as Executive Chairman.
Probst has been on EA’s board some 1994, and was the company’s CEO between 1991 and 2007. The company also stated that its current quarter’s earnings will be weak, landing “at the low end of, or slightly below previously issued guidance.”
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The company’s share price is up more than 7% in after-hours trading, indicating that investors are content with the change.
EA as a company has been under intense fire for the botched rollout of the new title SimCity, which had been under massive hype and expectation. The game, sporting controversial ‘always on’ DRM suffered from bouts of downtime at launch, problems that have continue to plague it since birth.
As TNW reported, many said “we told you so” when the launch flopped. EA as a company can withstand a weak game launch, but for the company to so badly miss a key franchise release such as SimCity is beyond acceptable.
According to its own verbiage, “[EA and Riccitiello] have mutually agreed that this is the right time for a leadership transition.” TNW isn’t so sure.
For more on the Sim City crisis, head here.
Update: The Wall Street Journal has secured Riccitiello’s letter to EA concerning his resignation. We’ve pasted it below [Bolding: TNW]:
To Everyone at EA –
I am writing with some tough news. I have resigned my position as EA’s CEO. I will be around for a couple of weeks, and I hope to have the chance to say goodbye to many of you. Larry Probst will be stepping in as Executive Chairman to help smooth the transition. Larry first hired me at EA in 1997 and he was an incredible leader for the company during the 16 years he served as CEO. While he will continue to be the Chairman of the US Olympic Committee, he will also provide leadership for EA until a permanent CEO is appointed.
My decision to leave EA is really all about my accountability for the shortcomings in our financial results this year. It currently looks like we will come in at the low end of, or slightly below, the financial guidance we issued to the Street, and we have fallen short of the internal operating plan we set one year ago. And for that, I am 100 percent accountable.
Personally, I think we’ve never been in a better position as a company. You have made enormous progress in improving product quality. You are now generating more revenue on fewer titles by making EA’s games better and bigger. You’ve navigated a rapidly transforming industry to create a digital business that is now approximately $1.5 billion and growing fast. The big investments you’ve made in creating EA’s own platform are now showing solid returns. I believe EA is alone in mastering the challenges of building a platform for our games and services – a platform that will provide a more direct relationship with our consumers. You are number one in the fastest growing segment, mobile, with incredible games like The Simpsons: Tapped Out, Real Racing 3, Bejeweled, SCRABBLE and Plants v. Zombies. You have worked to put EA in a position to capture industry leadership on the next generation of consoles; and I believe two of our titles – Battlefield and FIFA – will be among the top few franchises in the entire industry. And the industry’s most talented management team – Frank, Rajat, Peter, Gaby, Andrew, Patrick, Blake, Joel and Jeff — are certain to lead the company to a successful future.
I remain an incredible fan of EA and everyone who works in our world – from Stockholm to Seoul, Orlando to Edmonton, Guildford, Geneva, Cologne, Lyon, Bucharest, Montreal, Austin, Salt Lake, LA and, of course, EARS. My hope is that my travels and yours allow us the opportunity to talk more in the months and years to come.
In a few weeks, I will be leaving EA physically. But I will never leave emotionally. I am so incredibly proud of all the great things you have done, and it has been my honor to lead this team these past six years. After March, I will be cheering wildly for EA from the sidelines.
Top Image Credit: herval