Video Gaming Hurts: Heads Roll at EA

Video gaming veteran Electronic Arts (NASDAQ: EA  ) laid off 10% of its workforce this week, according to industry-watcher magazine Kotaku. The maker of The Sims, the Battlefield series, and the Madden Football franchise is trying to cost-cut its way out of a dying industry.

In this video, Fool contributor Anders Bylund highlights how far the traditional gaming industry has fallen under a sustained assault from smartphones and tablets. Can the old guard change quickly enough to survive in a totally different era?

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  • Report this Comment On April 29, 2013, at 5:08 PM, kthor wrote:

    problem with EA is, the PC games are buggy with no support ..they try to wow the gamers into graphics but that's so 90's

  • Report this Comment On April 30, 2013, at 5:41 PM, NErnst79 wrote:

    EA isn't dying because the video game industry is dying. EA is dying because they have forever ago stopped trying to put meaningful content into their games/updates, and just wanted to milk the video game industry for every penny that they could. This worked for awhile, and now they're paying the price for it. As they should.

    Console gaming is still a real thing, though the next generation could be the last. Companies just need to realize that there is real competition for console gaming now, in the frame of mobile/tablet games, and need to have realistic profit expectations.

    EA's problem is that they can't monopolize the mobile gaming industry the way that they have the console one, and accordingly, they have to actually release quality games. They still don't seem willing to do so, and are suffering the consequences. Which is how it should be.

    Unrelatedly, it's pretty obnoxious to read an article and realize that the 2 advertisements embedded in the article are each longer than the 'article' itself. Way to be classy, Motley fool.

  • Report this Comment On April 30, 2013, at 5:57 PM, Lennox02 wrote:

    The video game industry isn't dying. Console sales are currently depressed because the market is expanding into tablets/phones AND because the current console cycle is very old. This fall the new consoles from Microsoft and Sony will arrive and reinvigorate the console segment. As far as the industry as a whole goes, there are more gamers alive today than ever in history, so the notion that the industry as a whole is dying/withering is ridiculous.

    Regarding EA, however, unless they get away from micro-transactions and always-on games they will continue to alienate gamers and other publishers will steal their marketshare. At this point it's much too early too tell if EA is in real trouble. Another major failure (which is inevitable) could very well jolt the company out of it's consumer-alienating policies and bring the company back into real profitability sometime next year.

  • Report this Comment On April 30, 2013, at 6:55 PM, Raider4life2624 wrote:

    EA games are the worst on next gen systems, They try and WOW you with graphics while game play is horrible. They have yet to make a Madden on next gen that is as good (game play wise) as the ps2/xbox version, oh they look pretty, but the game play is horrible

    I was a Die Hard Madden player on PS2, but since they moved to PS3/X360 it's been a FAIL....I've since found other games that are much funner and light years better than EA games.......it's pretty sad, I was an EA fan up untill 4 years ago, they have since been nothing short of disapointing, and now with 10% less staff, I don't see them getting any better.

  • Report this Comment On April 30, 2013, at 6:56 PM, Dyce9z wrote:

    Not to be rude to the writer, but I feel like "Lennox02" has a far better grasp of the situation and was able to explain it clearly.

    He's right, just because EA is dying doesn't mean that they are the indicators for the rest of the console gaming industry. EA used to be a powerhouse, but so many other development companies have come up with brilliant efforts. And in this industry, you're really only as good as your last release. If it sucks, you lose credibility while others gain the respect and attention of your former customers. This is the situation with EA - they've stopped releasing quality titles, while focusing on (as NErnst79 put it) milking the industry. I had a very good friend of mine let go from EA last week, but even he could tell you the same, they didn't know how to focus on the right things.

    In direct contrast, take a look at Rockstar or Irrational Games/2K. They focused on the quality of the product, rather than rushing out a complete piece of crap. Gamers know when a title is rushed, even the casual gamers. But in the end, it's the quality that matters and EA forgot that.

  • Report this Comment On April 30, 2013, at 7:21 PM, hezmanian wrote:

    So let me get this straight..a company that has been putting out sub par products and shaking down customers for every nickle and dime is laying off 10% of its work force and that is supposed to mean that an entire industry is faltering? Utter rubbish. EA is having trouble because EA is a terrible company that does not respect its customers. When EA decides to listen to its customers again, it will return to its former glory. By this article's logic, the next time Ford or GM lays off employees or closes a plant, we should all buy a horse because the car industry is shutting down..

  • Report this Comment On May 01, 2013, at 6:47 PM, Wingeddamnation wrote:

    So firing 10% of people will make EA a better company, make their gaming vision better, show more respect towards it's customers, come out with games that appeal towards the clients, make sure their servers get a decent upgrade so people can actually play their games without no fear....well, you get the point. You just fired 10% of people who could put up with your pompous attitude and could make a difference. Now, I bet you 10 years from now we will see EA bankrupt and another article asking why EA is going out of business. Other companies out there will pick up the EA people who got laid off which will make them even better.

  • Report this Comment On May 13, 2013, at 7:52 PM, JoeChan213 wrote:

    EA is the one company that embraced this budget mess called smartphone/tablet/social gaming. They ported all their IP to phones and browsers, adopted Freemium monetization with IAP, stuck a social gaming feature on everything and anything, and bought any mobile developer with one hit to their name. Riccittiello has been running around for the past few years acting like the future was Farmville, IAP and DRM.

    If smartphones were going to kill consoles, EA would be ahead of the game. They're not. Meanwhile Take Two lives off of AAA console / PC revenue and their earnings are fine. Probably because they don't do dumb stuff like convert all their IP to Freemium so they can stick it on an iPhone.

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