Riccitello tells Berkeley graduates: "fail well"
EA CEO says company has endured tough times, but adaptation was imperative
John Riccitello, the CEO largely credited with the turnaround in both the fortunes and attitude of Electronic Arts, has told a graduating class at California's University of Berkeley that in order to do anything worthwhile, they must be prepared for failure.
The executive spoke about the mercurial fortunes of his company, and how a lack of preparation for the most recent generational shift, alongside the transition to social and casual gaming, nearly cost everything. Those failures, he believes, were essential learning experiences.
"Failing well matters because it is ultimately how you define your reputation and, I think, how you will see yourself," Riccitello told students.
"Four years ago I held a meeting and told employees that we were in a do or die situation. We were failing. We could invest and re-tool for radical change, or we could accept the shrinking share of a shrinking pie and eventually die.
"The internet was about to do to the game industry what it had done to music, movies and newspapers," he continued. "We were facing a world going through unbelievable change with the rise of smartphones, social networks, and more recently the iPad, each of which has turned out to be a platform where gaming is the number one application."
"I wish I could tell you it's all paid off. Yes we've had a few wins, but there's much more to do. We're proud that our game quality is up, our cost is down, and our profits are up. That the investments and the notion that we could build a business beyond simply packaged goods is working.
"And we're happy that Wall Street is starting to respond. But I'm not standing in front of shareholders in a flight suit claiming mission accomplished.
"So while the lesson isn't over, we've learned a lot."
It's not the first time which Riccitello has addressed the problems which accompanied the generational transition, having spoken about the period during an technology conference earlier this year. During that session, Riccitello described how the publisher had "dropped the ball" but recovered competitiveness.
"Through this last transition to the PS3 era, Xbox 360, Wii - for a whole bunch of reasons that aren't worth getting into in a short answer, I think it's fair to say we dropped the ball," Riccitello told listeners. "Our IP deteriorated, our costs went up, and we didn't really have an answer for the rise of digital.
"Over the last three years, we've made a dramatic number of changes, which can be described as part turnaround, part transformation. The turnaround has been cutting our title slate in half and dramatically strengthening our intellectual property portfolio. I think we have the strongest IP portfolio, by far, in the industry today.
"At the same time we have been managing costs aggressively and we have built a leading position, a broad base, in digital gaming. Whether it's mobile, strength in social networks, microtransaction-based services, game services. This past year, we recorded over $700 million in purely digital revenue streams."