Riccitiello: "Short-term pain" necessary for further growth

John Riccitiello has said that although Electronic Arts has ended 2007 as the number one first-party publisher across all formats, losing share is not acceptable, and "short-term pain" is necessary to enhance the quality of internally developed titles.

In a rallying cry to investors and the company following its third quarter financial results, the CEO said that he's prepared to delay titles to improve quality, as the publisher faces stiff competition particularly from rivals in the US.

"While we are the third-party quality leader we are not satisfied with where we are," said Riccitiello. "We did not have any internally developed breakaway titles and no one of EA's internally developed titles reached a Metacritc rating of 90 or greater.

"This hit us particularly hard in North America where EA faced tough competition on a number of fronts. In North America, excluding EA Partners, our business was essentially flat in a very robust market.

"As anticipated, our calendar year shares were down. Although we hit our numbers and anticipated our share losses, losing share is just not acceptable. Rebuilding share is a top priority," he stated.

The company said it ended 2007 with an 18 per cent market share in North America and 19 per cent market share in Europe.

Stand out titles for the company in the last three months of 2007 included FIFA 08, NBA Live 08, NHL 08 and new IP Skate.

Skate, said EA, has performed above expectations, out-selling the latest Tony Hawk title by 2-to-1.

Forthcoming titles Battlefield: Bad Company and Mercenaries 2: World in Flames have been delayed until fiscal 2009, which begins in April this year, with Riccitiello stating such a decision is better for the company in the long-term.

"When I came back to EA I made a commitment to investing in quality, both because I think it's the right decision for the long-term financial health of the company and because it is what our consumers have a right to expect," he said.

"This is an important principle, even if it results in short-term pain. We have made the decision to move Battlefield Bad Company and Mercenaries 2 into fiscal 2009. Both titles are looking great and we believe with additional polish we will build a better consumer experience and thereby maximise our economics."

This 'good, but not good enough' message was reiterated by chief financial officer Warren Jensen, who said that although the latest title in the Need for Speed franchise sold over 5.5 million units in the last three months of 2007, it was still down on the previous year's performance.

"Although we would never call this performance a disappointment, units and revenues were down year over year," he admitted.

Jensen also revealed a number of million-sellers during the last quarter, all of which have contributed to record revenues of USD 1.5 billion for Q3.

FIFA 08 has increased its market share in the US by more than 25 per cent with worldwide sales of 4.5 million units, Madden NFL 08 has sold over 2.5 million copies, NBA Live 08 sold two million and Rock Band over 1.5 million, "beating expectations even with supply constraints."

The Simpsons Game shifted over 4 million copies, with Jensen stating, "We are pleased to have another successful and global entertainment franchise in our portfolio."

He also said that The Orange Box and PC-exclusive Crysis also exceeded expectations.