Ex-EA exec: "EA is in the wrong business"

Written by Joe Martin

January 14, 2010 | 11:20

Tags: #digital #retail

Companies: #ea #electronic-arts

Former Electronic Arts executive Mitch Lasky has lambasted the publisher for having the wrong business model for a future that will focus on digital distribution via his blog.

Writing on Bizpunk (via BluesNews), the former executive vice president of mobile and online implied EA was being naive in how it planned for a digital future.

"EA is in the wrong business, with the wrong cost structure and the wrong team, but somehow they seem to think that it is going to be a smooth, two-year transition from packaged goods to digital," said Mitch, who is now a partner at tech investment firm Benchmark Capital.

Mitch writes about a proposal he once presented to the company that involved cutting costs and preparing the company for a games-as-services approach to business, but says he was shot down immediately.

"They literally couldn't imagine going to Wall Street with a message of increased profitability rather than top-line revenue growth."

"The old EA model was a basically a three-legged stool: 1) a profitable, recurring sports business (Madden, FIFA); 2) franchise games that produced big hits on a less frequent basis (The Sims, Need for Speed, Command & Conquer); and 3) a collection of digital assets (e.g.: Pogo & JAMDAT, and now Playfish) and distribution/partnership titles (e.g.: Rock Band & Left 4 Dead). Of those, the only stool leg left intact is the third one. Without the digital assets and the EA Distribution titles, they'd be in even more serious hot water."

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