In an interview from earlier this week, CNBC sat down with EA CEO John Riccitiello to discuss his company’s stock performance, position in the marketplace and the status of the gaming industry as a whole. EA stock has been on the decline, as have the share prices of many other publishers (EA stock is currently valued at $12.03 per share, near its 52-week low of $11.28 and down from a high of $26.13). Riccitiello took the opportunity to explain some misconceptions about the industry and his company, specifically, in hopes of kicking off a turnaround.
One of the most interesting things that came out of the 15-minute discussion was the perception gap created by NPD. The reporting service tracks physical sales of packaged goods in the United States. While the entire industry has been trending downward for the past six months (at a fairly steep incline), this single statistic doesn’t show the entire picture. NPD does not track digital sales, which anyone following the Steam Summer Sale knows is an important part of the current landscape. Riccitiello went so far as to cite NPD as the source of much handwringing about the “death of PC gaming” just a few years ago, as that sector made an almost complete transition to digital delivery.
Today, the PC platform is on a major upswing, and EA is glad to take some of the credit thanks to its Origin service. Likewise, NPD doesn’t track the booming mobile and social segments, where EA has firmly planted its flag alongside Zynga. Riccitiello cited SimCity Social and Simpsons Tapped Out as two new, promising titles in the publisher’s stable.
When asked about the market research firm’s impact on stock prices, Riccitiello reiterated his belief that their reporting has very little meaning to the industry. However, he recognizes that investors rely on due to a lack of understanding. Although EA is currently in a quiet period (the time between an SEC filing and when that body deems it “effective,” also signified by strict limits placed on public information disclosures), he did speak a bit about when he believes a turnaround will happen.
“A major catalyst coming forward—the most important catalyst coming forward—is visibility on next generation console. The NPD data—that minus 10 and 20 and 25% you’ve been seeing—that can and should be reversed out at some point probably starting in the next year.”
This wasn’t the first time next generation consoles were discussed during the interview. This statement seems to indicate some belief that, we will be seeing Microsoft and/or Sony enter the ring again in 2013. Once again, though, we’re forced to wonder how this will impact Battlefield 4 and the guarantee of beta access to Medal of Honor: Warfighter purchasers (as we discussed earlier this week).
“We’re an IP company that is doing really well in digital. I think too many people see us as a packaged goods company, which is so much our past and not our future.”