EA's CEO, John Riccitiello will be standing down from the video game company, effective March 30. Source: Supplied
THE CEO of Electronic Arts - the company behind SimCity - has resigned.
John Riccitiello announced that he would be stepping down as CEO and as a member of EA's board of directors this morning, "effective March 30".
EA appointed Larry Probst as executive chairman to "help smooth the transition" until a permanent replacement for Mr Riccitiello was found.
In an internal letter to EA employees obtained by The Wall Street Journal, Mr Riccitiello said his decision to resign was motivated by the company's "financial shortcomings" over the past financial 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," he wrote. "And for that, I am 100 per cent accountable."
Mr Riccitiello said though he would be leaving EA physically, he would 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," he wrote.
Mr Riccitiello's resignation comes about two weeks after its disastrous global launch of SimCity where server issues which left hundreds of thousands of users unable to access the game.
The company came under huge criticism for its "online only policy". Its servers crashed and people were only able to access the game after EA stripped certain features from the game in order to lighten the burden on its systems.
One EA employee even wrote an open letter to the company, accusing it of betraying its own internal values.
EA made no reference to SimCity in a statement released this morning.
"We thank John for his contributions to EA since he was appointed CEO in 2007, especially the passion, dedication and energy he brought to the company every single day," acting CEO Mr Probst said.
"John has worked hard to lead the company through challenging transitions in our industry, and was instrumental in driving our very significant growth in digital revenues.
"We appreciate John's leadership and the many important strategic initiatives he has driven for the company. We have mutually agreed that this is the right time for a leadership transition."
What does it mean for EA Games?
"Gamers don’t really see the rocky financials, they just see the games. During Riccitiello’s tenure we did see EA take risks on games like Mirror’s Edge, Rock Band, Dead Space and Brütal Legend. Some of these risks paid off, some didn’t. We saw Critereon resurrect Need for Speed, and we saw FIFA become a class leader. Unfortunately for Riccitiello earnings are still down for EA. EA’s share price has never recovered from its slump in 2008.
"Unfortunately, what investors want in a new EA CEO and what gamers want are going to be two entirely different things. Will we still see fresh new IP, or will the pendulum shift even further to safer sequels and more microtransactions?"
John Riccitiello's full letter to EA:
"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 per cent 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."
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