Riccitiello: Hardware price cuts came "too late"

Electronic Arts CEO John Riccitiello has told investors that part of the reason 2009 was a difficult year was because the first party companies - namely Microsoft and Sony - were too slow in cutting hardware prices.

Speaking after the company released its Q3 results - and guidance which Riccitiello branded as "conservative" for the next fiscal year - he added that other factors included the title line-up for last year as well as the broader economic recession.

However, despite a cautious stance on outlook, he did note that console use was increasing - a trend which he saw no reason to believe would end at any time soon, even with increased usage of other digital and social platforms.

"First up we do have data and research on the amount of time consumers are spending with games, and increasingly and importantly they're spending more time with their consoles than they ever have before - so I don't think it's a consumer behaviour issue if it's anything at all," he said.

"I do think it's fair to characterise 2009 as a consequence of a relatively less powerful slate industry-wide, compared to 2008," he went on. "I think the second factor was a lack of aggressive pricing from first parties, if you will. They were a little bit too late with their price cuts.

"And frankly and broadly, the economic circumstance - and the recession that hit most Western markets.

"As we look to 2010 there's nothing to suggest that consumers aren't going to increase the use of their console. Relative to others who have provided guidance, we've decided to be a little more conservative, and frankly that's a function of the fact that we haven't seen enough data to suggest that purchase behaviours are there yet in spades.

"What makes us feel good about it though is that it's a strong slate - we've got strong belief in the new motion control devices. So there's reason to be optimistic, we've just chosen not to because it's a better planning assumption to be more conservative here," he added.

EA has noted that it expects net revenue to land between $925 million-$1 billion - lower than most analysts were expecting. Shares in the company fell by over 8 per cent to just over $16 in the first hour of after hours trading.