By Matt Vella, deputy technology editor
FORTUNE -- Electronic Arts CEO John Riccitiello will step down on March 30, the video game publisher announced today.
In a statement to the press, EA (EA) said it was naming Larry Probst as executive chairman while it searches for a new leader. Probst was the Redwood City, Calif.-based firm's CEO from 1991 to 2007, when Riccitiello took over. Probst has served as EA's chairman since 1994.
EA also said its revenues and earnings per share will be at the low end or below its January guidance. The company reported lower revenues for the last three months of 2012 than it did for the same period a year earlier. EA had the top-selling video game in February with its action-horror title Dead Space 3. But U.S. retail sales of new video games fell for the fifteenth straight month, year over year. Sales of new video game hardware, software, and accessories fell 25% from a year earlier to $810 million in February, the NPD Group reported.
The publisher's stock is trading at $18.71, down from $61.40 in 2007 when Riccitiello took over as CEO. EA will announce results for fiscal 2013 on May 7.
Videogame makers and publishers are entering a period of uncertainty as technology alters the way consumers play. Increasingly, gadgets made by the likes of Apple (AAPL) and Google (GOOG) are eating into the profits of traditional console manufacturers like Nintendo (NTDOY) and Sony (SNE). Game publishers EA and rival Activision Blizzard (ATVI), in turn, have had mixed results trying to adapt. In addition, digital sales have begun threatening the once-steady retail business.
"We thank John for his contributions to EA," said Probst in a prepared statement. "John has worked hard to lead the company through challenging transitions in our industry and was instrumental in driving our very significant growth in digital revenues." The decision was described as mutual.
In a memo sent by Riccitiello to Probst, the outgoing chief highlighted the company's growing digital business. At his direction, EA created an online games platform dubbed Origin to distribute titles over the Internet. The company, which controls lucrative franchises such as The Sims, Madden NFL, FIFA Soccer, and Need for Speed, has tried to find ways to make more of the considerable intellectual property it owns. Riccitiello also oversaw the acquisition of PopCap, a mobile games maker that created the popular Bejeweled.
But EA's transition to a more digitally oriented business hasn't gone smoothly. Earlier today, it announced that it had sold more than 1.1 million copies of its city-building PC game SimCity in the first two weeks it was available. About 54% of those sales were digital versions, downloaded via Origin.
But the launch was widely derided in the games press for severe technical difficulties. For days, players had trouble downloading the game because demand overwhelmed EA's servers. The technical issues, which have not yet been entirely resolved, caused some reviewers to revisit their initial assessment, lowering high scores that can drive sales. EA announced it would give registered users a free title to make up for the problems.
In 2007, Riccitiello's incoming mandate was to find ways to pare down the sometimes massive costs associated with developing mainstream titles. Budgets for high-profile games like EA's Battlefield 3 can easily spiral into the hundreds of millions of dollars. He also vowed to find new revenue streams in comics, television, films, and toys.
Despite a few successes, Riccitiello had yet to score an outsized hit. Activision's Skylanders franchise, which appeals to younger children, generated more than $600 million in the U.S. alone since its October 2011 launch, according to NPD. Activision previously announced that the franchise had surpassed $1 billion in global sales. In 2012, the combined sales of Skylanders Giants and Skylanders Spyro's Adventure toys outsold the top action figure lines in the U.S. and Europe, including Beyblades, Star Wars, and Transformers, according to the company's internal estimates.
Sony's high-octane presentation of its next-generation PlayStation 4 gaming system mostly impressed observers.
FORTUNE -- On Wednesday night, Sony launched the latest version of the Playstation to thumping music, lasers, and a giant screen that wrapped around the audience. The company hopes the super-charged PS4 will help it retake the top spot among console makers and prove its relevance in the changing games market. The games maker touted slick graphics and MOREFeb 21, 2013 10:51 AM ET
Sony's vastly improved PlayStation 4 game system is set to launch later this year. The company hopes it can help it regain lost momentum.
By Matt Vella, deputy technology editor
FORTUNE -- Sony Corp. unveiled its PlayStation 4 video game console Wednesday, introducing a machine with dramatically improved technical abilities, crisp graphics, and a slew of social networking features. The new console is a major bid by the company to regain momentum MOREFeb 20, 2013 9:35 PM ET
This week, Sony will likely take the wraps off its new game console. Here's what it must be able to do in order to have a chance of succeeding.
FORTUNE -- Can Sony deliver a jolt to the ailing video game console market? The Japanese electronics company will certainly try this week if, as expected, it unveils its next-generation PlayStation 4.
Sales of the PlayStation 4 will be scrutinized from day one. MOREJP Mangalindan, Writer - Feb 20, 2013 8:58 AM ET
True Office aims to turn compliance testing into a videogame-like experience. Will firms pay for their employees to play?
By Alex Konrad, reporter
FORTUNE -- Adam Sodowick wants to make corporate compliance training, er, sexy -- or at least make it more exciting than it is today. That may sound like an uphill battle, but the True Office CEO thinks he has a way to engage employees and make HR folks MOREMay 15, 2012 5:00 AM ET
The videogame retailer has started accepting trade-ins of used Apple products -- and that may mean a bigger change for their business.
By Daniel Roberts, reporter
FORTUNE -- The news that GameStop stores are buying used Apple devices alongside traditional consoles and video games hit the Web this week and went viral almost immediately. Many bloggers began stating outright that the chain will also sell new Apple devices, such as the iPod MORESep 9, 2011 3:34 PM ET
Tens of thousands of free and low-cost smartphone games are killing Nintendo and Sony
The pie chart at right, published Friday by the mobile analytics firm Flurry, illustrates just how rapidly the platforms that brought Mario to a generation of videogamers are shrinking.
It shows Nintendo's share of the multibillion dollar U.S. portable software game business collapsing in the space of a year from 70% to 57% while Apple's (AAPL) iOS and MOREPhilip Elmer-DeWitt - Apr 15, 2011 10:47 AM ET
Online games such as Age of Conan and Farmville are hot. Now industry leader Activision Blizzard is jumping into the fray with a new Internet strategy.
When videogame publisher Activision announced its merger with Vivendi Games in late 2007, analysts predicted that Vivendi's Blizzard unit, maker of the hugely popular Internet-based fantasy game World of Warcraft, would help Activision migrate to the online world.
Three years later the combined company, Activision Blizzard, MOREStephanie N. Mehta, Deputy Managing Editor - Dec 20, 2010 5:00 AM ET
Engadget found a PSP Phone running Android. That would make a few shoppers a nice Christmas present.
The Sony PSP Phone has been rumored since the first PSP showed up in 2004. If the product shot Engadget produced this evening is the real deal, it will likely be coming to fruition either right before Christmas or early next year.
According to Engadget, the device sports a 1GHz Qualcomm MSM8655, 512MB of RAM, MORESeth Weintraub - Oct 26, 2010 9:41 PM ET
The stand-alone gaming device is dead. Long live the multi-purpose gaming smartphone.
Engadget is reporting that Sony (SNE) and Google (GOOG) are working on a new gaming device that will run on Android 3 (Gingerbread) and debut later this year. It is described as:
...a cross between the Samsung Captivate and the PSP Go -- in other words, it's a landscape slider with game controls in place of the typical QWERTY MORESeth Weintraub - Aug 12, 2010 11:13 AM ET
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