Originality isn’t paying off for Electronic Arts.
The nation’s biggest videogame publisher has been praised by many critics and fans for attempting to fire up its business this year by investing in high-profile new properties, bucking the trend of competitors like Activision Blizzard, which are focused almost exclusively on maintaining franchises.
But when EA warned Dec. 9 that it will miss profit targets for the fiscal year ending in March by a significant margin, original games were one of the main causes cited.
Many of the new titles, as well as iterations to existing franchises, were well received, but sales weren’t commensurate with buzz.
“While we saw significant improvement in the overall quality of our key products this year, that quality has not yet translated into enough sales,” CEO John Riccitiello admitted to analysts. “Quality is a prerequisite for a great-selling game — but it is not the entire equation.”
Like many videogame companies, EA is suffering some from the slow economy. But buying trends within the recession are just making things worse.
With consumers’ wallets thinning, they’re focusing more spending on a smaller number of top-selling titles, most of which are sequels to popular franchises. EA had only one game in November’s top 10, “Left 4 Dead,” which it distributed for a partner.
Some new games such as “Mirror’s Edge” bombed, while others like “Dead Space” and “Spore” sold well but not as highly as EA was hoping. The only game the company could cite as an unqualified success was the latest sequel to its annual FIFA soccer franchise.
Company has also seen catalog sales for older titles fall precipitously, indicating there’s a shorter window for most games to succeed.
As a result, Riccitiello says EA is cutting back on products in development and focusing only on those with “the greatest hit potential.”
There’s one category that’s defying all these trends, however: Nintendo’s Wii, which has reached a much broader and more casual audience than the Playstation 3 and Xbox 360. But no company besides Nintendo has figured out how to consistently make successful games for the console.
No surprise, then, that Riccitiello says EA is also aiming to increase and improve its performance making Wii games.