When the CEO of the world's largest videogame publisher takes repeated shots at the runner-up, even a journalist must eventually take note and seek comment. That's exactly what we did after noticing three separate statements in which Activision CEO Bobby Kotick had taken a dig at Electronic Arts, including an accusation that EA has been "taking the soul" out of a lot of the studios it purchased. To address this string of criticism, we sent some questions over to Jeff Brown, EA's vice president of corporate communications, for the company's official response. Here's what he wrote back:
In a recent Q&A with Portfolio, Activision CEO Bobby Kotick had the following exchange with the interviewer:
Is there a key to Activision's growth?
It's about really being considerate of the culture in the game studios that Activision buys. That's the biggest difference between us and any of our competitors. We built a model that celebrates entrepreneurial, opportunistic, independent values. It's almost the opposite of Electronic Arts, which has commoditized development. It did a very good job of taking the soul out of a lot of the studios it acquired.
What was the reaction of the executives at Electronic Arts when they read that quote?
The truth is, everyone laughed. In the past year EA has made radical changes to decentralize the company and put creative control back in the hands of development teams. It's too early to declare victory but if you talk to people like Patrick Soderlund at dice in Stockholm, Mark Jacobs at Mythic in Virginia or Josh Resnick at Pandemic--they'll probably tell you that it's working. They get a lot of resources and creative freedom. That freedom has already contributed new start-ups like Dead Space, Mirror's Edge and Boom Blox and there's a lot of others to be announced soon.
EA CEO John Riccitiello has made numerous recent remarks about EA's shift away from a command-and-control model towards a city-state model, in which individual studios and teams have more control over their own destiny. Do remarks like this suggest that he has more to do to change the perception of EA among his peers, or is something else at work? Which studios would you point to at EA that still have their souls intact?
We've got a lot of work to do--internal and external--to let people know that EA has changed. Some of the complaints about EA employment practices had to do with us being the biggest and taking arrows for practices that were common throughout the industry. But there were things we absolutely had to change. We settled the class action lawsuits and changed how certain jobs were classified. More important, we changed the culture.
I won't speculate on the spiritual attributes of the city-states--but you should check in with friends at BioWare, Redwood Shores, the Sims, Criterion, Mythic and the Canadian studios. Most people think that big changes Riccitiello has made are very positive.
In the same Portfolio Q&A, Kotick was asked about EA's bid for Take-Two, to which he replied, "I can't comment on competitors' deals." However, when he was asked about the proposed deal in February during the Goldman Sachs investor conference, he was much more forthcoming, saying:
On the Take-Two front, we have had a well-stated criteria on what we are interested in in an acquisition. We need a history of profitability, good management, proprietary technology or franchise, history of multimillion-unit sellers, they would have to be nondilutive and operating margin credos. For us, Take-Two didn't fulfill those requirements.
That's between him and his shareholders.
But presumably, those criteria are not very dissimilar from what EA would look for in an acquisition. Why do you think that Kotick is turning his nose up at a deal that EA is so aggressively pursuing?
I wouldn't speculate on that.
Kotick has offered his perception of EA's studio management. What is the opinion among EA's top brass about how Activision has managed its studio operations?
No strong opinion. They've got three great franchises [presumably referring to World of Warcraft, Guitar Hero and Call of Duty 4--Ed.]--it's great that one of them was actually developed at Activision.
Once the Activision Blizzard merger goes through, EA will effectively be the distributor of World of Warcraft in China through your company's partnership with The9. Is there any chance that this war of words between Activision and EA could torpedo this arrangement for WoW?
We've got a small equity state in The9 and no real influence over their management. Their plans for non-EA titles don't involve us and we don't have any insight on what they plan to do.
In an interview published by Reuters last week, Kotick said the following when asked about the impact of EA's possible acquisition of Take-Two: "That's concerning, sure. When you think about one company in control of the sports category, with no competition from anybody else, that could be a challenge."
Kotick isn't the only one to raise these concerns; Level Up's legal affairs columnist Justin Blankenship has made much the same point, and presumably this is one of the major factors behind the Second Request that the Federal Trade Commission issued to EA. Why shouldn't gamers be worried about the point that Kotick has brought up?
That's really a matter for the FTC to resolve.
Loading Menu