Faced with an unwinnable situation, EA says it learned from its failure and changed the game it was playing.
EA boss John Riccitiello thinks failure is an inevitable part of success, and that it's possible to turn failures into victories, as long as you "fail well." Riccitello says that EA realized it was failing four years ago, but was able to starting turning things around by embracing this fact.
Speaking to UC Berkeley's graduating class, Riccitiello said that in 2007 and 2008 EA was in a rather precarious position: development costs were up, game quality was down, and the rise of digital platforms like social networks and smart phones was changing the videogame market forever. Ricitiello said that EA's options were either to "invest and re-tool for radical change," or to continue on its then-current path, and eventually die out altogether.
The company decided to do the former, which led to significant job cuts and studio closures. Riccitiello said that it was a difficult time both for the company and for him personally. "I lost a few friends in the process," he said. "Smart, creative people who just couldn't stomach the transition. Some stopped believing, some left for what they thought were better offers with a quicker profit and payout."
He felt that it had been the right thing to do, however, and EA was strengthened by embracing its past failings. "We were students of our own failure, we used our failure to shape and impel us to a better strategy, one that we believe will ultimately succeed in ways that our previous strategy, even if perfectly executed, could never have done." Riccitello said that the struggle wasn't over though, and that while the company had won a few of its battles over the last four years - and investors were starting to respond to the changes it had made - there was still lots more to do. "I'm not standing in front of shareholders in a flight suit claiming mission accomplished," he said. "The lesson isn't over, [but] we've learned a lot."