The Ultimate EA Retrospective: In-Depth on Riccitiello’s Legacy
The Activision-Vivendi Merger
As Electronic Arts entered 2008, the company’s status as the largest American publisher of video games was undisputed. It was at this point that Activision, EA’s biggest rival, upset its reign by merging with Vivendi, owner of World of Warcraft developer Blizzard, to create Activision-Blizzard. Overnight, Electronic Arts slipped into the No. 2 spot.
Before the merger with Blizzard, Activision already had an enormous share of the market. It’s notable that only the year before, Call of Duty 4: Modern Warfare exploded onto the scene, going on to sell 13 million copies and locking down the military first-person shooter genre for Activision indefinitely. Joining forces with Blizzard brought the 10 million-plus-subscriber title WoW under the Activision umbrella as well.
Many of the decisions made at Electronic Arts from this point forward suggest that whatever had been decided at the start of Riccitiello’s tenure, EA’s new game plan was to find a way to mimic or surpass Activision’s success in both the multiplayer genre and the massively multiplayer online genre.
For its part, EA tried a merger of its own with publisher Take-Two Interactive under Riccitiello’s leadership in 2008. EA was estimated to have offered $2 billion in the merger, but negotiations with Take-Two ultimately failed.
To add to the troubles EA was facing against a newly energized Activision that now had control of the two biggest franchises in gaming, Riccitiello had another major problem: the Great Recession. As the global economy was hit hard by the collapse of the housing bubble, EA and the rest of the gaming industry found their stock taking a massive hit. EA’s price dropped from a high of about $53 to a low of about $15 by the start of 2009; to this day, it hovers at around $18.
Also damaging its stock price was a serious slump EA hit as it failed to meet its revenue projections for 2009. The company has had problems meeting them ever since.