10 Sep

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In an email adressed to EA employees, which subsequently leaked to the Wall Street Journal, EA CEO John Riccitiello stated amongst others that due to the downturn in video game sales in August, sales for the recently released Madden NFL 2010 were also down. More details are available after the link.

Riccitiello stated that he was saddened by the fact “that one of our highest-rated and best-marketed Madden titles in years is facing strong headwinds.” However, market research organization NPD reported today that the Madden title topped the overall US sales in August. Topping the list of overall sales was Madden 2010 for the Xbox 360, which had over 900,000 sales. The Playstation 2 and Playstation 3 instalments were placed sixth with 160,000 sales and third with 665,000 sales respectively.

Despite the recent downturn, the email also stated that EA would benefit greatly from the recent console pricecuts by both Sony and Microsoft. For the remaining 7 months in EAs fiscal year, Riccitiello has set four goals that will help the organization succeed in these times of economic hardship. These goals are as follows: “great product launches, succeeding on the Nintendo Wii, continued expansion of our direct-to-consumer business, and cost control”.

The entire email that was sent to the EA employees can be found below.

As we head into the fall of 2009 and prepare for the all-important holiday quarter, I wanted to send a note to get everyone up to date on our progress.

We had a strong first quarter for FY10 headlined by great product quality and strong marketing. Our two biggest titles in the quarter, The Sims 3 and EA SPORTS Active, broke through and beat our own high expectations. And, just as important, our total direct-to-consumer businesses were up 38% in our first quarter.

We’re still in the middle of our second quarter, with a few of our biggest launches – Need For Speed SHIFT and FIFA 10 – still coming later this month. Today, we launched The Beatles: Rock Band. These games are all outstanding and will delight millions of consumers this year.

Last month at the Games Convention in Germany, EA put on a dazzling display of industry leadership. BioWare’s Star Wars: The Old Republic won the top honors at the convention from Eurogamer. We launched Madden NFL 10, which critics and fans alike reviewed as the best Madden on this generation of consoles. In my judgment, we supported this game with one of the strongest marketing campaigns of the year. Both the game quality and marketing reflect outstanding teamwork and deep commitment to excellence.

This week, market research for August will show that year over year, the industry was down in North America – and that August sales of Madden NFL 10 are down with that trend. It is discouraging that one of our highest-rated and best-marketed Madden titles in years is facing strong headwinds.

Despite the challenging environment in North America, there are a few important and positive signs in our sector. In recent weeks, both Sony and Microsoft announced significant price cuts for the Playstation 3 (the new slim) and Xbox 360. Our early read on the market is that consumers are responding and console sales are up significantly, particularly for the Sony platform where EA has historically performed well. This is encouraging, as greater hardware sales have historically translated to stronger software sales. We’re hopeful that the Madden sales trend will strengthen as more consumers go to retail to pick up their lower-priced consoles.

Also, our EAi businesses, comprised of Pogo, the new EA Social group and EA Mobile, are performing well. The Pogo Puppies social game goes live next week. On mobile, a recent analysis of the Apple App Store games show that EA is number one with the highest number of titles in the top 100 – and with the highest average price point.

What underpins most everything is the dramatic improvement in our product quality. Back in 2006, we set quality as a top priority and we have increased our average every year since then. Already this year, EA has produced 11 titles with an 80+ Metacritic average:
– Madden NFL 10
– Fight Night Round 4
– EA SPORTS Active
– Tiger Woods PGA TOUR 10
– NCAA Football 10
– BOOM BLOX Bash Party
– The Sims 3
– Battlefield 1943
– Skate 2
– Henry Hatsworth in the Puzzling Adventure
– The Beatles: Rock Band

I am confident that we will exceed the record we set last year of shipping 14 titles rated 80 or better. We will know in the weeks ahead when critics rate our big releases such as NHL 10, FIFA 10, Need for Speed SHIFT, Dead Space Extraction, and from EAP, Brutal Legend and Left 4 Dead 2.

We are now five months into the fiscal year and the most important period of the year is still in front of us. Trend lines for the industry present a challenge, but our strategy and execution give me confidence. From here, our focus is on four priorities: great product launches, succeeding on the Nintendo Wii, continued expansion of our direct-to-consumer business, and cost control.

In any economy, this is the path to success.

Let me finish by thanking all of you for your hard work and, most of all, for your success in creating and delivering the very best games consumers can play.


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