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EA CEO's Departure Might Be Good For the Company

Soulskill posted about a year and a half ago | from the profit-chasing-behavior-backfires dept.

Software 84

Nerval's Lobster writes "Electronic Arts CEO John Riccitiello might have resigned in the wake of the company's disastrous SimCity launch, but his departure might not be a bad thing for EA as a company. On Glassdoor, his 59 percent rating was 9 points below the average. One outside recruiter says Riccitiello's taken the fun out of the game maker's culture. 'They've never had a problem getting good talent and that's not likely to change,' says the recruiter, who requested anonymity because of his business dealings with the company. 'But, they've had problems getting great talent and that's not likely to change.' Let this be a lesson to gaming executives everywhere: if you're going to launch a popular title that needs to be constantly connected to online servers, make sure you have enough backend infrastructure in place to actually handle the load." A related article suggests EA needs to worry less about piracy and more about the company's apathy and legitimate customers who demanded a refund.

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definition of "needs" (3, Insightful)

Anonymous Coward | about a year and a half ago | (#43218367)

>>if you're going to launch a popular title that needs to be constantly connected to online servers

It all comes down to "needs"

Yeah - more like (3, Funny)

fyngyrz (762201) | about a year and a half ago | (#43218729)

if you're going to launch a popular title that PRETENDS to need to be constantly connected to online servers

...and you get caught

Prepare for some incoming.

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Re:definition of "needs" (-1)

Anonymous Coward | about a year and a half ago | (#43224951)

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Please die ea (0)

Anonymous Coward | about a year and a half ago | (#43218369)

i for one uninstalled origin and have no intent of ever seing an EA logo appear on my screen again

Re:Please die ea (0)

Anonymous Coward | about a year and a half ago | (#43222489)

Why did it take you so long? In all seriousness, why was this the tipping point? Why didn't you do this earlier?

Online only lies (2, Insightful)

Anonymous Coward | about a year and a half ago | (#43218381)

The reason they gave for being online was that they were running parts of the simulation your computer couldn't handle. That was a lie. They aren't simulating anything. People go to the nearest open job or house. Pathfinding is broken. It has nothing to do with their "infrastructure" and everything to do with them trying to sell you an unfinished product with no demo under the guise of DRM.

Re:Online only lies (2)

chromas (1085949) | about a year and a half ago | (#43218519)

The reason they gave for being online was that they were running parts of the simulation your computer couldn't handle. That was a lie.

Well, duh. If that was the case then they'd need compute power greater than that of all the expected thousands of users combined (well, minus whatever processing can be shared).

Re:Online only lies (1)

MightyMartian (840721) | about a year and a half ago | (#43218867)

This is beginning to sound like a Dan Simmons novel.

Re:Online only lies (1)

Anomalyst (742352) | about a year and a half ago | (#43219333)

D'oh

Really? (-1)

Anonymous Coward | about a year and a half ago | (#43218383)

Ya think??

Pretty sure he left because of... (3, Informative)

ASimPerson (138798) | about a year and a half ago | (#43218385)

Re:Pretty sure he left because of... (1)

baka_toroi (1194359) | about a year and a half ago | (#43224355)

Uhm... What happened in the last quarter of 2008?

Re:Pretty sure he left because of... (0)

Anonymous Coward | about a year and a half ago | (#43225083)

Really? You don't remember that the US economy tanked?

But bad for Mirror's edge (0)

interkin3tic (1469267) | about a year and a half ago | (#43218397)

The chances of a sequel for Mirror's edge dropped from maybe 1% to 0.5% or less. He had said it was a good game and wanted to see a sequel, even though it sold not very well.

As someone who really liked that game, that makes me a little sad, though overall, fuck that guy.

I'm a developer in Vancouver... (4, Interesting)

ADRA (37398) | about a year and a half ago | (#43218401)

and I would never work for EA. They're a sweat shop. I realized earlier on that I wasn't meant to be a game developer, but I've know several friends that have bumped through the EA treadmill who've left burnt out and miserable.

This may very well be the life of a most game devs, but I don't feel like 60 hour weeks is conducive to a healthy long term career with a company.

As a user, since they've introduced Origin, I've bought one game (ME3) reluctantly, and quite frankly the EA label is a LARGE detriment to my decision for buying games. I was in fact intrigued at buying Sim City for $40 from Amazon before launch, but I was a little Leary about it. Now I think Ubisoft's a little rotten with this whole push for uPlay, but at least they're playing ball with Steam if nothing else.

All that said, I'm VERY glad that the Indy scene seems to be picking up steam both in volume and quality. I'm sure Kickstarter and other such initiatives are helping lead us to a hopefully more diverse and healthy product ecosystem.

Re:I'm a developer in Vancouver... (5, Interesting)

SpaceMonkies (2868125) | about a year and a half ago | (#43218467)

Back in 2004 Electronic Arts was criticized for employees working extraordinarily long hours—up to 100 hours per week—and not just at "crunch" times leading up to the scheduled releases of products. The publication of the EA Spouse blog, with criticisms such as "The current mandatory hours are 9 a.m. to 10 p.m.—seven days a week—with the occasional Saturday evening off for good behavior (at 6:30 p.m.)". The company has since settled a class action lawsuit brought by game artists to compensate for unpaid overtime. The class was awarded US$15.6 million. As a result, many of the lower-level developers (artists, programmers, producers, and designers) are now working at an hourly rate. A similar suit brought by programmers was settled for US$14.9 million.

Re:I'm a developer in Vancouver... (0)

Anonymous Coward | about a year and a half ago | (#43224231)

VMware had a similar lawsuit for their support staff, which VMware lost, which made them close down the support center in CA, cut everyone's pay and drop them to hourly.

Re:I'm a developer in Vancouver... (-1)

Anonymous Coward | about a year and a half ago | (#43224911)

http://www.makemytourntrip.com/domestic.html

www.makemytourntrip.com

Re:I'm a developer in Vancouver... (0, Insightful)

Anonymous Coward | about a year and a half ago | (#43218477)

60 hour weeks for developers, especially game developers, is not unusual. If anything that is actually a pretty comfortable gig, I have watched some devs especially towards the death march of release working 80-100+ hour weeks on a regular basis.

Re:I'm a developer in Vancouver... (4, Insightful)

Anonymous Coward | about a year and a half ago | (#43218563)

Any company where developers work those kinds of hours regularly is doing it wrong. I would never consider a job where I constantly work 60 hours per week a "comfortable gig". If your project planning is done properly and resources allocated accordingly, a normal work week should suffice. Of course there are companies where that planning fails at some level, but if that happens regularly those companies aren't likely to be able to stay in business anyway.

Re:I'm a developer in Vancouver... (3, Insightful)

barc0001 (173002) | about a year and a half ago | (#43218795)

60 hours a week is NOT a "comfortable gig" unless you're fresh out of uni with no appreciable outside life. I did that for almost 10 years and looking back on it can't believe I did it as long as I did. There are plenty of tech companies around that "get it" and don't squeeze every last waking minute out of their people. One thing I definitely noticed was that the longer you make people work, the less work/hour they did since they were planning to be there for 12 hours a day anyway. Or if they were being pushed hard during those 12 hours, toward the end of the week they started to make costly mistakes that took hours to find and correct. In both cases the company was making minimal gains at large personal cost to the employees.

Re:I'm a developer in Vancouver... (2)

JSombra (1849858) | about a year and a half ago | (#43218885)

Most game developers expect that around crunch time, problem with EA is it was "crunch time" 24-7 365 days a year. That's not due to nature of industry or even bad planning, that's planning to intentionally screw over staff for profit (especially as they generally avoided paying OT as well)

Re:I'm a developer in Vancouver... (2)

mark-t (151149) | about a year and a half ago | (#43218987)

BC Employment Standards Law, section 39. "Despite any provision of this Part, an employer must not require or directly or indirectly allow an employee to work excessive hours which are detrimental to the employee's health or safety". This even includes so-called "high technology professionals".

Re:I'm a developer in Vancouver... (1)

Mashiki (184564) | about a year and a half ago | (#43219071)

BC Employment Standards Law, section 39. "Despite any provision of this Part, an employer must not require or directly or indirectly allow an employee to work excessive hours which are detrimental to the employee's health or safety". This even includes so-called "high technology professionals".

Well here in Ontario, we have a similar section. Back about 5 years ago the Liberals changed the law allowing companies to pay a very small fee and get a waiver so they could work you into the ground. $20 says that there's also a waiver system out there as well, making that section null. I know this "mandatory" bypass of sections of law like this exist in places like NFLD as well.

Re:I'm a developer in Vancouver... (1)

qparadox (1105733) | about a year and a half ago | (#43219287)

Its even worse than that in BC. Here we have what's often referred to as the "EA Exemption;" if you're a "high technology professional," then the ESA doesn't apply. I'm pretty sure the Section 39 (mentioned above) also doesn't apply as Part 3 of the Act is essentially ripped out.

"The hours of work provisions of the Act, including those governing meal breaks, split shifts, minimum daily pay and hours free from work each week, as well as the overtime and statutory holiday provisions, do not apply to “high technology professionals”.

You can find more about it on the governments fact sheet here: http://www.labour.gov.bc.ca/esb/facshts/high_tech.htm [gov.bc.ca]

Re:I'm a developer in Vancouver... (1)

mark-t (151149) | about a year and a half ago | (#43219465)

No. The issue with regards to not negatively impacting employee health and safety applies to *ALL* employers in BC, even "high tech professionals".

If you work at such a job, and you find that your working hours are affecting your health, you can file a complaint with the Director of Employment Standards. You had better have a fairly objective proof of your claim, however. This generally involves keeping a paper trail of how your health has been impacted over the course of time since excessive hours began, and will probably require confirmation by an outside medical professional, who can examine the evidence at hand and present their unbiased conclusions.

If the director finds that your claim has validity, they can and *WILL* impose hour restrictions on the company for how long they are allowed to let employees work, bringing it right down to the standard 40-hour week, 8 hours per day for an indeterminate period of time. Of course, the company may be just as liable to simply dismiss somebody who they feel may be likely to file such a complaint, coming up with a convenient plausible excuse before it is ever an issue.

Re:I'm a developer in Vancouver... (1)

Mashiki (184564) | about a year and a half ago | (#43231149)

Good link, thanks man.

Re:I'm a developer in Vancouver... (0)

Anonymous Coward | about a year and a half ago | (#43219077)

but I was a little Leary about it.

Were you a little Dennis Leary about it?

Always on, doesn't need to be ClientServer (2)

GoodNewsJimDotCom (2244874) | about a year and a half ago | (#43218411)

I hate giving the bad guys ideas, but P2P really can reduce your server load by a great deal. Essentially, use other random players to simulate a server for you, or just check for hacks and keep your state. Then when the game is shutdown, if you don't do an eloquent shutdown yourself, the other players check their data against each other to make sure they're not hackers, then they send your state to the main server.

It sounds like these guys tried to use an always on clientserver architecture which works for World of Warcraft, but the costs of which aren't sustainable for a game people might want to play 5-10 years down the road. Maybe EA just banked on the "fly by night" sim city where they take your money, then laugh in 2 years when people get cut off like they do with their EA sports games.

Re:Always on, doesn't need to be ClientServer (1)

medv4380 (1604309) | about a year and a half ago | (#43218489)

That only works if you remove the DRM. I'm pretty sure Always On P2P wont work well with DRM.

Re:Always on, doesn't need to be ClientServer (1)

gl4ss (559668) | about a year and a half ago | (#43218669)

uh but then the always on would have no point.

point of drm always on is exactly that you can move code that is essential for gameplay to servers you control, so that people can't just reverse engineer binaries but have to do a full rewrite of the black box that is the server(but ea fucked that up too with simcity it seems from some reports).

Choose one already (1)

Nightjed (1102995) | about a year and a half ago | (#43218413)

Either he failed and got sacked or he was the bestestest goddamn CEO of them all, choose one already

I don't understand why they are doing all this adulation, it makes EA look like they are letting their best man (in the whole damn company!) go, just say "No more work for you!, NEXT!"

come on guys can't we remove the BS before posting (4, Interesting)

bloodhawk (813939) | about a year and a half ago | (#43218421)

"if you're going to launch a popular title that needs to be constantly connected to online servers"

Seriously who lets this shit past review. While I would love EA to be suffering and the CEO to be ousted because of the DRM BS it simply isn't true. The CEO has been underperforming for some time, the companies shares are down as is its financial performance and it has little to do with SimCity.

Re:come on guys can't we remove the BS before post (2)

vux984 (928602) | about a year and a half ago | (#43218463)

All true. Although if the sim city launch hadn't been botched so badly and instead had gone off brilliantly then perhaps the 'underperforming shares' trend might have reversed enough to preserve him.

Re:come on guys can't we remove the BS before post (2)

bloodhawk (813939) | about a year and a half ago | (#43218505)

It would take far far more than a single games success to turn them around. The problem with multi billion dollar companies is it is like a bus hurtling down a hill, SimCity if successful would be like downshifting gears. It may slow the decent but it would take a shit load more to stop the bus let alone turn it around.

Re:come on guys can't we remove the BS before post (1)

Killjoy_NL (719667) | about a year and a half ago | (#43222793)

With a big name like Simcity, it could have turned around the company quite a bit I think.

Re:come on guys can't we remove the BS before post (0)

kamapuaa (555446) | about a year and a half ago | (#43218469)

Actually, the board of directors carefully pondered each and every one of the 1-star reviews on Amazon before coming to a final decision.

Re:come on guys can't we remove the BS before post (0)

Anonymous Coward | about a year and a half ago | (#43218471)

I'm glad I'm not the only one who thinks the sensationalism in /. stories has got worse as of late. It's almost like a story can't make the front page unless it's an exaggeration of an example of something people dislike or an event spun in a manner that confirms the site's groupthink.

Re:come on guys can't we remove the BS before post (1)

gl4ss (559668) | about a year and a half ago | (#43218703)

simcity was just the turd on the shit mountain.
if it failed to hit it's targets because of drm or not doesn't really matter, only that it didn't sell crazy matters.

it's kinda funny though since their servers were doomed just with the load they knew was going to hit them.. much less if it had become a runaway hit(I don't really see it hitting it as big as sims... it's not really a game for the sims players nor for the simcity fans it seems).

Re:come on guys can't we remove the BS before post (1)

HumanEmulator (1062440) | about a year and a half ago | (#43219273)

As I posted (with supporting links) in another comment: The reason EA is giving for his departure is he's responsible for their performance being about $100 million short of what they expected. A successful game launch like Skyrim (at 3.3 million copies) earned $450 million dollars, so if SimCity sold 1.1 million at launch and this was immediately followed by Amazon pulling the game from sale and even once it was back, doing things like temporarily discounting the game to $46 bucks.. then sales are likely bad enough that they're losing more than $100 million from where they expected to be on this one game alone.

Re:come on guys can't we remove the BS before post (0)

Anonymous Coward | about a year and a half ago | (#43219867)

would like to know where you get your maths from. for 450 mill for skyrim at 3.3 million copies means the average price of the game was just shy of $140. Don't know where you live or how much you paid for it but here it was about 70-80 dollars. to lose 100 million they would need to lose close to 2 million copies sold, that simply isn't happening, at most it has cost them a few hundred thousand sales (something in the order of 10-20 million), most likely the lost sales are far lower than that as the sheep don't read reviews online before buying.

Re:come on guys can't we remove the BS before post (1)

ganjadude (952775) | about a year and a half ago | (#43220415)

I for one say good. The last good EA game I can think of was tony hawk 2

Re:come on guys can't we remove the BS before post (1)

gmhowell (26755) | about a year and a half ago | (#43219681)

Unless you were sitting on the phones and emails while the discussions were going on, you have absolutely no proof of the real reason he was fired. Everything coming from him and the company is PR. Conjecture that he had to leave due to SimCity is just as valid as conjecture that he left due to poor financial performance. Or it could be some combination of the two. Or something wholly unrelated.

Re:come on guys can't we remove the BS before post (0)

Anonymous Coward | about a year and a half ago | (#43221959)

His performance over the past year or so is NOT conjecture, it is a matter for public record. However everything about SimCity being a cause is definitely conjecture and highly unlikely as well. EA are not backing away from always online DRM, he is unlikely to be the person responsible for the bad code or the poor server capacity, that responsibility is likely with someone a level or 2 lower though as the CEO he would burden some o the backlash. Regardless SimCity has been a success so far sales wise. So NO it is not just as valid to say he left due to SimCitym it is idiotic.

Re:come on guys can't we remove the BS before post (1)

ganjadude (952775) | about a year and a half ago | (#43220403)

diablo 3 release was just as bad, I spent a month trying to get a refund with no luck. I dont know why more people are not still bitching about them as well to be honest. I saw sim having a problem, so i waited and im glad i did.

Re:come on guys can't we remove the BS before post (1)

tlhIngan (30335) | about a year and a half ago | (#43224157)

diablo 3 release was just as bad, I spent a month trying to get a refund with no luck. I dont know why more people are not still bitching about them as well to be honest. I saw sim having a problem, so i waited and im glad i did.

Because Diablo 3 is old news - it was released last year.

And that Activision are just as money grubbing, but have "better PR" and have acquired many "likes" through acquisitions like Blizzard and exclusivity of developers like Bungie.

If Bungie can get Destiny out within the year, it'll probably do well. If not, it'll be a horrendous mess of nickle and diming and DRM in attempts to monetize the heck out of it and capitalize on all that goodwill Bungie has. They have 10 years to do so, after all.

I wouldn't get my hopes up... (5, Insightful)

Lendrick (314723) | about a year and a half ago | (#43218439)

Given EA's corporate culture, it's entirely possible that the CEO is just a fall guy. The investors want blood, and somebody has to get fired. Unless their next CEO is someone who loves gaming things are just going to stay the same. The trouble with media companies in general is that their upper management seems to think differently from normal people; that is, they think in terms of monetizing things as much as possible without regard to how their customers might feel about that in the long term.

EA's nasty DRM doesn't just prevent people from pirating their games, it also prevents customers from modding their games. Preventing mods allows them to make more money from "microtransactions", by selling silly little things that the player community could easily mod in if the game allowed it (and the value of these add-ons in terms of gameplay tends to be extremely poor). Conversely, you have companies like Bethesda who (while still copy protecting their games) allow people to create their own modifications, and then make money selling legitimate DLC with tens of hours of content each.

Point is, I highly doubt it's just the CEO who's thinking that the best way to maximize profits is to sell a game and then nickel and dime people with stupid, worthless addons that take no effort to create. I'm guessing this is the attitude of the board of directors and upper management as well, and just replacing one dude isn't going to fix that.

Re:I wouldn't get my hopes up... (1)

rahvin112 (446269) | about a year and a half ago | (#43218535)

DRM's main purpose has always been the elimination of the used game market. They couldn't actively be talking about shutting down Gamestop so they instead talk about shutting down piracy when the goal is to actually get rid of Gamestop. They see used games as a lost sale, a real lost sale where the person would really spend money. They know with certainty there is nothing they can ever do about Pirates, so they go after the low hanging fruit. Why do you think the DRM usually come with install limits? DLC, in particular included DLC are one of the other methods.

Go through any DRM and look at each condition and you'll see most of them are designed to hamper the sale of used games, not piracy.

Re:I wouldn't get my hopes up... (1)

Lendrick (314723) | about a year and a half ago | (#43218609)

I'm sure that's part of it, but it's possible to prevent used game sales with less nasty DRM (not that the prevention of used sales is in any way good or fair). Steam doesn't allow used game sales either, but it doesn't require always-online DRM for users to play their games (in fact, most of the games can be played in offline mode, without even needing an internet connection to start them).

Re:I wouldn't get my hopes up... (1)

SimonTheSoundMan (1012395) | about a year and a half ago | (#43218893)

I'm seeing more and more one time activation codes for PS3 games, not sure if this happens on the Xbox. If you do sell on the game, the person that bought it has to purchase a new code from the PS Store for around £10. It makes second hand games almost worthless to sell to stores that buy used games.

Re:I wouldn't get my hopes up... (1)

kamapuaa (555446) | about a year and a half ago | (#43221161)

What makes you say this? I got Battlefield 3 from a friend who does business with EA, to get some extra content you had to enter a one-time code from a printed card. EA could implement something like this just to get basic content, and kill the used market overnight (for new games, anyway).

Piracy basically destroyed the music industry, PC games need to implement anti-piracy strategies as well.

Re:I wouldn't get my hopes up... (1)

ax_42 (470562) | about a year and a half ago | (#43222453)

And killing the used market overnight would be a bad thing for consumers and ultimately also for publishers/devs -- you are taking away a part of the value of the game (namely the resale value), without lowering the price of original purchase. Giving lower value at the same price should lead to lower sales, lower profits and (hopefully) a change in business model which involves the publishers getting their head out of their asses.

BTW, piracy has made large inroads into the music "industry", where the "industry" is the publishers/distributors who were extracting economic rents from the artists who actually produce the product. I personally have no problem with the "industry" going to the wall if it fails to adapt to changing circumstances (and in fact uses every means at its disposal, fair or foul, to maintain the status quo which suits it).

Re:I wouldn't get my hopes up... (1)

tlhIngan (30335) | about a year and a half ago | (#43224189)

PC games need to implement anti-piracy strategies as well.

Depends. The traditional AAA titles are a lot fewer on PCs if you don't count "we'll release PC to make a few extra bucks" console ports. However, the PC has a vibrant indie community (no doubt helped by mobile app stores that feed off each other - successful mobile games often get PC ports and vice-versa) that then slowly trickle to consoles.

For the most part, other than a few PC exclusive game types, the PC game market is "dead" to all but indie games. But ease of development will keep the PC gaming scene alive.

Re:I wouldn't get my hopes up... (1)

Hyperhaplo (575219) | about a year and a half ago | (#43246587)

That certainly worked in my case. I loved Diablo and Diablo 2. I would most certainly buy Diablo 3. However, I can't. The always on DRM is a step too far for me. So, I did not purchase Diablo 3. I will never buy it. Their scheme has worked perfectly in my case. No piracy here folks. No game sale either. Oh well.

Re:I wouldn't get my hopes up... (1)

ganjadude (952775) | about a year and a half ago | (#43220433)

Great point. I was never a half life fan, but i did love how things worked with half life. Hell I even made a few mods for the game (working with a friend on an ICP mod level and characters) because it was so easy. I miss the days of DK quake and HL

Re:I wouldn't get my hopes up... (1)

PyrousLavawalker (1716674) | about a year and a half ago | (#43223281)

For me the true horror is how much money EA makes while still doing all these things. Who is getting suckered into this? Its has to be in the millions of suckers!

Re:I wouldn't get my hopes up... (0)

Anonymous Coward | about a year and a half ago | (#43253023)

The moronic thing about the mentality that preventing mods makes them money on DLC is that the community will *always* provide vastly more content than any developer can. Mods have shown time and time again that they are absolutely invaluable for extending the sales life of games. Some games are even less popular than mods they spawned (Counter-Strike for instance).

Preventing mods in a bid to sell DLC is the dumbest possible thing a developer can do, because not only is it transparent to gamers (why buy this when it has no mod support in order to push crap DLC?) and it also limits the long term sales of the game by huge amounts.

And the free game scam... (0)

Anonymous Coward | about a year and a half ago | (#43218509)

is going to haunt them for a long time. Promising it then refusing to honor it is something that their customers are never going to forget. I received the e-mail notification yesterday about the free game. They don't actually promise a free game. The language in the e-mail is intentionally confusing, noncommittal, and contradictory. As they admitted, they will rip-off their customers at "March 30, 2013 at 11:59PM PST" if they haven't already been able to force EA to provide them with the free game. After Saturday after next, EA has committed in writing to not honor the free game.

Re:And the free game scam... (1)

Ideler (1966844) | about a year and a half ago | (#43222181)

It's not a scam. Just got an Origin popup and was able to pick my free game, were able to choose from multiple options; ie NFS most wanted, BF3, MOHA, Dead space 3, Mass Effect 3 and some Bejeweled thing.

Taking issue with one bit of the SuperMeatBoy post (1)

FooAtWFU (699187) | about a year and a half ago | (#43218521)

You cannot prove even one lost sale because there is no evidence to state that any one person who pirated your game would have bought your game if piracy did not exist. From an accounting perspective itâ(TM)s speculative and a company cannot accurately determine loss or gain based on speculative accounting. You canâ(TM)t rely on revenue due to speculation, you canâ(TM)t build a company off of what will âoeprobablyâ happen. Watch âoeThe Smartest Guys in the Roomâ and see how that worked out for Enron.

Okay, so Enron fudged it, but insurance companies in general are all about building a business speculating on what will "probably" happen. The things that let them keep going are in-depth risk analysis, diversification, and a fat cushion of capital. As long as they're right sufficiently more often than they're wrong, then they win overall.

Not that this will help EA out any, but that bit bugged me.

Re:Taking issue with one bit of the SuperMeatBoy p (1)

rahvin112 (446269) | about a year and a half ago | (#43218667)

Warren Buffet backstops earthquake insurance in the state of California. He takes in millions every year in free money to provide reinsurance to California insurance companies.

What this means is that if there is ever an earthquake in California that exceeds more than $5 Billion in insurance payments, Berkshire Hathaway is on the hook for any payments exceeding that amount. AFAIK he has no upper ceiling on his liability. If the big one hit southern California it's conceivable that his entire company would go bankrupt backstopping the insurance market.

Does Buffet worry about it? No. His reason boils down to the odds of that earthquake ever happening. He gets millions of dollars of free money to invest every year by taking this risk. In fact almost his entire empire has been built leveraging insurance money of one form or another. He's so important in the insurance industry that when he refused to insure losses due to terrorist attacks that policy was then adopted by nearly every insurance company in America.

Re:Taking issue with one bit of the SuperMeatBoy p (1)

MtHuurne (602934) | about a year and a half ago | (#43219825)

What this means is that if there is ever an earthquake in California that exceeds more than $5 Billion in insurance payments, Berkshire Hathaway is on the hook for any payments exceeding that amount. AFAIK he has no upper ceiling on his liability. If the big one hit southern California it's conceivable that his entire company would go bankrupt backstopping the insurance market.

That sounds like a large earthquake would be a humanitarian disaster followed by a financial disaster. Someone will have to absorb the amount not paid out in case of a bankruptcy. Whether it's the insurance companies, the citizens of California or the government, it's going to be painful, since they will all be short in cash after a large earthquake.

Re:Taking issue with one bit of the SuperMeatBoy p (1)

rahvin112 (446269) | about a year and a half ago | (#43220829)

Given Berkshire's net worth that would be one hell of an earthquake. At current value that would mean about 250 billion + 5 billion for the insurance liability. So a total of 255 billion in damage to private property (public infrastructure is backed by the government). Hurricane Sandy did a tremendous amount of damage at about $70 billion (I think that includes public infrastructure). So you would need the equivalent of about 3.5 times the damage of Sandy only to buildings and personal property (land value isn't insured). Probably the total destruction of the entire LA valley to achieve that level of damage.

I don't think it's very likely an earthquake could generate that level of damage that it would ever exceed that figure just because it's such a large number. I mean seriously could you conceive an earthquake that destroyed every single human made structure within the entire area between Mission Viejo to Bakersfield? God knows I can't, especially considering Northridge (a 7.1 quake) did about 25 billion in damage (where more than half that cost was public infrastructure that failed). You'd need a 9.5 at more than 5 minutes long to even get close to that kind of damage in earthquake insured private property and I don't think the san andreas can generate that kind of motion. (Keep in mind not everyone has earthquake insurance)

Re:Taking issue with one bit of the SuperMeatBoy p (2)

CCarrot (1562079) | about a year and a half ago | (#43219047)

You cannot prove even one lost sale because there is no evidence to state that any one person who pirated your game would have bought your game if piracy did not exist. From an accounting perspective itâ(TM)s speculative and a company cannot accurately determine loss or gain based on speculative accounting. You canâ(TM)t rely on revenue due to speculation, you canâ(TM)t build a company off of what will âoeprobablyâ happen. Watch âoeThe Smartest Guys in the Roomâ and see how that worked out for Enron.

Okay, so Enron fudged it, but insurance companies in general are all about building a business speculating on what will "probably" happen. The things that let them keep going are in-depth risk analysis, diversification, and a fat cushion of capital. As long as they're right sufficiently more often than they're wrong, then they win overall.

Not that this will help EA out any, but that bit bugged me.

True that, but there's a huge difference between the accuracy of actuarial tables and that of marketing projections.

The insurance companies have to have the best, verifiable numbers possible to get a reasonable idea of how much they will have to pay out in an average year, so they can size their premiums accordingly. If they just say fugit and place the premiums at a hundred times what they figure they might pay out in a year, people simply won't buy their product. Those projections have to be based on the best information the companies can find, with very little room for corporate delusions.

Marketing and software development, on the other hand, is rife with self-delusion and speculation. With the advent of computers, that branch of salespeople now have a ready-made troll to beat when their overly optimistic estimates don't come close to the actuals...it must be them dam dirty pirates again, boss!

The existence of a pirated copy of a game does not equate directly to a lost sale any more than tripling the insurance premiums equates directly to profit. Some people will go ahead and pay the cost, while many, many others will refuse at any cost. True, they shouldn't be looking to benefit from the product without paying some price, but the gaming company cannot seriously claim that everyone who tries a game for shits and giggles would have bought it if they couldn't play the pirated version. That's like Luis Vuitton claiming that everyone who buys a knock-off handbag would have bought a real handbag if the knockoff weren't available...yeah, fat chance of that! It's much more likely that the game would have simply faded into obscurity, because people weren't interested enough to buy it so nobody's talking about it...

What the company does gain from piracy, however, is word of mouth marketing for their game. Pissing off their customers with DRM nightmares...well, that's also a form of word of mouth marketing.

Taking issue with the WHOLE SuperMeatBoy post (1)

Anonymous Coward | about a year and a half ago | (#43222173)

TL;DR - seriously, he makes three points:

1). You can't estimate loss of digital wares like you can with physical inventory. Thus a pirated game may not be a lost sale

2.) DRM doesn't prevent this "loss" anyway so it's not worth putting resourced into.

3.) Ill will from customers will damage your sales more than piracy, so don't piss off customers.

He repeats these same points about 10 times each.

I'm suing /. (0)

sgt scrub (869860) | about a year and a half ago | (#43218523)

I realize and accept that a pirated copy of a digital game does not equate to money being taken out of my pocket. Posting links to articles that make you fall out of you chair should be prohibited. As soon as I find a lawyer that doesn't laugh when I tell them why I'm suing /. you're going to get it. :P

Piracy Should Be the LEAST of A Company's Worries (1)

sehlat (180760) | about a year and a half ago | (#43218607)

Turning customers off, driving them away, getting them into the habit of going elsewhere for whatever they're after is the REAL problem for any business.

EA's suffered from the common attitude of Corporate America: "We own our customers." SimCity 5 is a symptom, attitude is the cause.

I really don't understand why people were insane enough to buy SC5 in the first place, given EA's rep for crappy games and crappier treatment. You can live a couple of weeks without buying a luxury and thereby save yourself the trouble of demanding a refund or taking EA up on their "here's a crappy game to make up for the crappy game you bought" offer.

DRM Sucks (0)

Anonymous Coward | about a year and a half ago | (#43218621)

I'm glad someone's losing their job because of DRM. He isn't the first, and he won't be the last. Stop buying DRM-crippled games, people, and say no to pre-ordering until a game has shipped without DRM. Then, reward them with money. That's how to bring gaming back.

Friends Don't Let Friends Buy DRM (0)

Anonymous Coward | about a year and a half ago | (#43218653)

Seriously.
That's it.
When companies can't make money if they include DRM, they will stop including it (or go out of business).
Don't buy DRM.
Encourage your friends not to buy DRM.
Then we all win.

Re:Friends Don't Let Friends Buy DRM (1)

mark-t (151149) | about a year and a half ago | (#43219089)

Ideally, yes...

Unfortunately, the people who don't give a damn about DRM, which is a staggering majority, don't generally care what the people who loathe DRM think about it, even if it's only because they aren't technically competent enough to understand all of the ramifications... and trying to explain it to them is not terribly unlike trying to educate a dead tree on the merits of your political views. So that' s the flaw in your otherwise very reasonable-sounding plan.

Because of SimCity? (1)

HumanEmulator (1062440) | about a year and a half ago | (#43218759)

SimCity is a really bad game and I certainly hope that heads will roll for ramming an unfinished, needlessly server dependent game into the fans eager hands just to try and make some numbers for the quarter... but is Riccitiello really leaving directly as a result of it? Yeah, there's the timing of it, but the reason EA gives for the departure is they're going to be about $100 million lower on their guidance than they expected. Could they really be $100 million short this quarter from SimCity?

So what are the numbers... SimCity sold 1.1 million copies [arstechnica.com] at launch. For comparison the super-popular Skyrim had a $450 million dollar launch at 3.3 million copies [gamespy.com] . From that perspective, it certainly looks like SimCity really did make that dent... And considering SimCity 4 is still selling 10 years later, the money they're missing out on over the next 5 to 10 years could be ridiculous.

Common sense (1)

Daetrin (576516) | about a year and a half ago | (#43218767)

Look, the consensus seems to be that he was "CEO fired", which involves a lot more politeness and face saving then when the common worker drones are fired.

So if the board did in fact "fire" him, then if his departure is _not_ good for the company then they made the wrong decision. You don't fire any employee, CEO or drone, in the belief that it's going to make things worse for the company (or rather the owners/board of the company) than the alternatives.

Informative Slashdot Headline Very Informative (0)

Anonymous Coward | about a year and a half ago | (#43218785)

Thank goodness, it cleared things up for me immensely! I initially thought the board canned him because they thought it may be detrimental to the company. Whew! Good thing there is that link to a DICE article about it, to help clear up any confusion I had. Gee golly gosh!

Over-complicated (1)

RogueyWon (735973) | about a year and a half ago | (#43218841)

I think people are overcomplicating this departure. I'd be surprised if it had the slightest thing to do with the latest upsets involving the company (SimCity and Real Racing 3). Rather, I think the share price decline - and hence the departure - is being driven by one very simple thing.

spunkgargleweewee [escapistmagazine.com]

Forget all the "free to play" and "pay to win" crap. Investors know where the money in gaming is right now. It's in spunkgargleweewee. They look at Activision's profits from Call of Duty and think "I want a bit of that".

Until late last year, EA had a story to tell on this. The Medal of Honor reboot did ok. Not brilliantly, but ok. It got a foot in the door. Battlefield 3 did a bit more than that. It did quite well; it got a lot of the casual spunkgargleweewee drinker crowd playing because it tickled their tastebuds and it got a good degree of core-game interest because it was clear that the tech powering it was likely to be the starting point for the next console generation.

But then Medal of Honor: Warfighter happened. Crap marketing. Crap game. Profoundly negative appeal (for all sorts of cultural reasons) to the non-US market. Critical disaster. Commercial disaster.

Suddenly, EA no longer has a story to tell its investors on spunkgargleweewee. In this most important of markets, the graph no longer trends upwards.

That, more than anything else, will be what has driven this. Not proactive consumer boycotts. Not online protests. But the fact that their spunkgargleweewee ended up as a disappointment.

Couldn't get any worse. (0)

Anonymous Coward | about a year and a half ago | (#43219769)

This guy has basically shown every way to NOT be a CEO. The worst a replacement can be is just as bad.

a tiger cannot change his stripes (1)

Dan667 (564390) | about a year and a half ago | (#43219955)

at this point you know you are going to be treated badly. Don't buy ea games.

59 percent rating? (2)

manu0601 (2221348) | about a year and a half ago | (#43220551)

On Glassdoor, his 59 percent rating was 9 points below the average

Someone can explain me this sentence? Visiting glassdoor web site does not enlighten me about this 59% rating

Good for them (1)

Parlett316 (112473) | about a year and a half ago | (#43222549)

Get rid of management that spends their time stepping over dollars to pick up pennies.

Battlefield 3 (1)

Westwood0720 (2688917) | about a year and a half ago | (#43222913)

Been playing Battlefield 3 every night for the past month or so. Its alright I guess. Setting up Origin sucked. But once running it was fine. meh

Called this last week (1)

TheSkepticalOptimist (898384) | about a year and a half ago | (#43225757)

SimCity was an epic fail for a game release and there is no way a CEO of a company failing this hard should be allowed to continue at this company.

But this should be just the first of many firings or leavings that this company should expect.

Bottom line is, any new CEO stepping in needs to end the bullshit of imposing always on and stupid DRM schemes, accept that some percentage of content will be stolen, but if you focus on creating good compelling games and offer them at prices people find affordable and high value then you will get more people interested in paying for content rather then stealing it.

SimCity is a beloved game ruined by corporate greed. EA has ruined more games in this way and need to re-evaluate the point of being a game distributor if gamers just find their products repugnant.

Running a giant online gaming company (0)

Anonymous Coward | about a year and a half ago | (#43227977)

It's nearly impossible to run a giant online gaming company.

However, if I were EA, I'd eliminate the TheoryX management style (they have a culture of firing people there), titles, unpublished salaries, and the general lack of oversight among the dev-shops and their "separate-but-somehow-equal" studios.

They (especially the technical people) need the right to work remotely. Devs need access to CIS-benchmarked and OWASP-ASVS-benchmarked GitLab repos with strong accountability controls in place including rotation/separation of duties.

DRM is pointless when you attempt to (note this never works past 3-4 weeks after launch, if at all) client-side it. It's also pointless to try to keep your secrets safe when your server-side allows for remote code execution. EA in particular builds environments that weren't designed with performance or security in mind. This is a software quality/security problem -- not an IT problem; not an Ops problem.

EA is obsolete (1)

Artemis3 (85734) | about a year and a half ago | (#43231595)

Who needs EA when there is crowdfunding? The good people left long ago, and are making strong comebacks on their own, even banding together like they used to without answering to idiots.

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