Electronic Arts Chief Resigns

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SAN FRANCISCO -- The chief executive of Electronic Arts resigned on Monday, a victim of a troubled environment for the big video game companies as well as of internal missteps.

"After six years I feel it is the right time for me to pass the baton," John Riccitiello said in a statement. He has been chief executive since 2007.

His resignation comes as traditional video gaming is facing increasing pressure. Retail sales are falling -- they were down more than a quarter in the first 10 months of last year -- as consumers took to less demanding, less time-consuming and less expensive games on their smartphones.

"E.A. is the face of the gaming industry at a time when the market is in some important ways going sideways if not downhill," said Lewis Ward, research manager for gaming at IDC. "It has been outperformed by some smaller and more nimble companies."

Larry Probst, the company's chairman and former chief executive, will run Electronic Arts until a new chief executive is found.

The news, released after the market closed, pushed shares up by nearly 3 percent in after-hours trading. But after the market opened Tuesday, the shares fell sharply. In midday trading, they were down 8 percent from Monday's close.

E.A.'s shares had increased sharply in recent months on the promise of new gaming consoles from Sony and Microsoft.

"E.A.'s strategy and future are rock solid," Mr. Probst wrote on Monday in a post on the company's blog. But the company simultaneously said it was less optimistic about its revenues and earnings for the current quarter than it was only six weeks ago.

At that time, it projected revenue of about $1.115 billion to $1.215 billion and earnings of 92 cents to $1.12 a share. The company now expects to come in near the low end or slightly below those estimates.

"It all comes down to accountability," said Mr. Riccitiello in his resignation letter, adding, "E.A.'s shareholders and employees expect better."

Mr. Probst, who was the driving force behind making Electronic Arts one of the biggest forces in the gaming industry, praised Mr. Riccitiello's tenure.

But Colin Sebastian, an analyst with R.W. Baird, said Mr. Riccitiello "had some credibility issues, and on balance, investors will probably view the move favorably."

Neither Mr. Riccitiello nor Mr. Probst was available for comment, a spokesman for the company said.

Electronic Arts, based in Silicon Valley, released the latest version of its best-known game, SimCity, two weeks ago. It sold 1.1 million units in the biggest SimCity debut to date, the company announced Monday.

But many of those players had trouble connecting online and staying connected. Joystiq, a gaming Web site, called it a "calamitous launch" and pointed out the game had a Metacritic score "lower than the abysmal Resident Evil 6."

The company blamed the game's unforeseen popularity for its trouble because it overloaded its servers. It was forced to offer players a free downloadable game.

"I know that's a little contrived -- kind of like buying a present for a friend after you did something crummy," Lucy Bradshaw, the general manager for Maxis, the game's developer and a division of E.A., wrote on the Electronic Arts blog. "But we feel bad about what happened. We're hoping you won't stay mad and that we'll be friends again when SimCity is running at 100 percent."

Her post drew hundreds of comments, many hostile.

"Electronic Arts is certainly known for putting out some games that have a $60 price point and are positioned as a premium game but fall somewhat short of gamers' expectations," said Mr. Ward of IDC. "Whenever a customer feels he's not getting a good value for a dollar, he's going to take it out on you one way or another."

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This article originally appeared in The New York Times.


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