Electronic Arts gets a social makeoverDecember 1, 2011: 5:00 AM ET
The videogame maker missed the mobile revolution. Now EA is trying to turn itself around by embracing social games. Can it play on Zynga's field?
By Alex Konrad, reporter
FORTUNE -- Is John Madden going social in a big way? Not the football commentator. ("He's not really the tweeting type," an associate says.) No, we're talking about the Electronics Arts videogame Madden NFL, named after the famous coach.
Fresh off its recent success in social games -- EA's Sims Social is the No. 2 game on Facebook, behind Zynga's CityVille -- the game publisher says it is making a big push to modify a dozen of its most popular franchises to social platforms.
In fact, EA (ERTS) has already experimented with Facebook versions of Madden and its FIFA soccer game, but it never widely publicized those efforts or tried hard to make money on them. Now, CEO John Riccitiello says, social games are at the heart of a broader strategy to make EA's games playable on any device or platform, and for consumers to be able to keep playing a game or track their progress as they move from a console to a smartphone to a tablet to a desktop. (Riccitiello tells me he is personally frustrated that he can't port his Angry Birds scores from his original iPad to his newer iPad 2, for example.)
EA's plan is sort of a variation of the "TV Everywhere" model championed by Time Warner (TWX), Fortune's parent, and others. Consumers get to play the game on any platform once they've paid for it. EA also makes money from games such as Sims Social when heavy users buy virtual currency and other items for their games.
For Riccitiello, the move to social and other digital platforms is the centerpiece of his efforts to reinvent EA, which he admits had become bloated and complacent, depending on tired franchise titles while producing a large volume of lower-quality games. EA lost more than $1 billion in 2009. To catch up, EA went into acquisition mode: In 2009 it snapped up Zynga rival Playfish for $275 million, and earlier this year bought PopCap Games, a maker of so-called casual games, for about $750 million. "We put the company back on track by embracing the very thing that threatened us," Riccitiello said in a recent speech.
EA's turnaround is far from complete. The company is still losing money -- it lost $340 million in its second quarter -- and its digital strategy is hardly a slam dunk: It will need to juggle games on many platforms, including traditional consoles like Xbox and new form factors like the iPhone and iPad (where EA is a leader today). Meanwhile it must transition franchises designed for long hours of play to the social world, where users play in short bursts. Riccitiello isn't worried, though. Zynga and its ilk may have stronger social DNA, he says, but EA has a library of high-quality games with loyal followings it can mine. Put another way, fans can expect a rejuvenated John Madden (the game, not the coach).
This article is from the December 12, 2011 issue of Fortune.