As a strategy, it's better than being profitable: it's predictable. The forecasts for the upcoming financial quarters are much more likely to be accurate when you only work with known IP.

The CEO is more beholden to analysts and stockholders than to customers. He has more to lose by failing expectations than he has to gain by exceeding expectations. Therefore, EA adopts a strategy that minimizes variance rather than maximizing profit.

But yes, it's profitable enough. Games and studios generally have more name-recognition than publishers. EA can take existing name-recognition on a series and generate large revenue from the first bad game they turn out. They launch a large marketing campaign, and by pushing pre-orders they can get more people to spend money on a game before they have an opportunity to find out what the product is that they're actually buying. At this point it's practically a science, and the market is only starting to push back (the latest Assassin's Creed may be doing a number on pre-orders).

The way I figure it, when value is being knowingly and unnecessarily destroyed, someone somewhere in the chain is being irrational. Given that EA is a public company, the obvious candidate for that somewhere is Wall Street. Your analysis seems to confirm that.

But the stock market is supposed to be hyper efficient nowadays such that it's practically impossible to outperform it even for the experts, let alone for random punters on the Internet.

What's the resolution to this paradox? Not a rhetorical question; I'm actually curious.

The problem is the stock market is somewhat disconnected from reality.

I need to elaborate this further because now it just seems to be some anti-capitalist snark (which I do not want it to be).

The way stocks were supposed to work is that you buy a part of a company keep it and make money by getting a part of their profits every year (called dividend). Todays problem is that we want to make more money, faster (which is not "wrong" intrinsically as some people might think, but it does not work with the "traditional" stock model). The reason it does not work is that it may take some time for a company to be profitable and even then they may want to keep some of their profits to invest in research etc. which keeps dividends small (sometimes even 0). The new way one tries to make money is to buy a stock while hoping to be able to sell it to someone else for more money in the future (nothing wrong about that either). The real problem is that this price is based on supply and demand/perceived value which might differ significantly from the actual value (worth of the company's physical assets, paid dividends, ...) - it is easier to see these differences on more tangible things like luxury watches, art, etc., which are nowhere priced for their physical value (a frame and some paint - does not seem to be worth much ...) but they are there for stocks, too.

Now to the "hyper efficient"-part: yes, that's true, the market is hyper efficient, as in it is not that easy to get money out, because that would mean that someone else leaves it on the table, but everything still happens in the "perceived value" point of view, in which you would have to compete, too, to make money with stocks.

The dilemma in which CEOs find themselves is that not all actions that are good for the company itself are good for the perceived value/stock price, at least not when you are forced to do "short-term thinking" (the CEO keeping his job, the trader making money now).

I know that Wall Street is the boogey man for the HN crowd but how in the world can Wall Street be the villain in this story?

The Sims was only completed because EA was able to prop up the studio while it was underdevelopment. They were able to do that because A) they are good at selling software and B) they were a large public company.

Since then the studio has had a couple of huge flops (Spore and SimCity online) as well as a few enjoyable but disappointing from a sales perspective releases. In an industry built on the blockbuster model, I'd say its surprising they've lasted this long. They have because they have been spending other peoples money. So if there was an inefficiency here, it was that the studio got too much leeway, not that it was shutdown too soon.

There is no paradox, because you started with a completely flawed conjecture.

> how in the world can Wall Street be the villain in this story?

Two replies up, you'll find your answer there, as you probably jumped over it.

No, I read the whole thread. I'm just having trouble understanding how a studio having failed at a basic business reality of their market, and thus being shutdown, has Wall Street to blame.

Wall Street, even as the completely generalized abstraction, doesn't have anything to do with this, other than a big video game publisher used some money generated there, to back a studio that has been unsuccessful at their job. If it had been a US governmental bailout or kickstarter that the financing came from, would not have changed that.

The idea is that they were set up for failure by the relentless push to drive higher profit margins. This approach is incompatible with long-term growth, as there are only so many people who will fall victim to the idea of buying a worse game than last year's edition yet still buy more and more expansions. EA pushes for day one profits seemingly without concern as to profits over the lifetime of the product. As soon as the product is unprofitable, they shut it down.

Again, this comes from the idea that they need to make their profits look better and better because their stockholders demand it, which is sometimes at odds with what the players are looking for.

Do you think Maxis failed on its own, or is there the possibility that EA milked it dry and left it to die? If the latter, why would they do that? Not because it's good for the company long-term, but because it makes their bottom line look good just before annual profit reports are coming out. Think about it: SimCity was rushed out to meet a deadline of the end of EA's fiscal year, which happens on March 31st. SimCity was released March 7th, 2013. What's today's date?

Maxis has been owned by EA for 17 or 18 years no? As part of the ownership by the public company EA, the studio was able to release and have sequels for one of the best selling games of all time. Further, said game was distinctive in its business model in comparison to other games released at the time (it being very much about after day one profits). That is, at least on the surface, evidence that being owned by EA does not preclude long term stewardship of a game/studio.

As far as the stockholders go, I can assure you that A) stock holders have no ability to influence the release schedule of a video game or B) care how profits are generated, only that they are. There is at least a passing argument that the massively successful franchise of the studio would not have been possible without those stockholders, and the studio certainly did not turn down the money when they were acquired.

Whether EA mismanaged Maxis specifically or their management is in general too fixated on short term profits is not the issue. "Wall Street", whatever that is, does not demand that and would more happily not be involved in those decisions. So is it possible that EA is mismanaging their studios in a misguided attempt to cook their books? Maybe, but if so that has been true for Maxis for going on 2 decades, 1 of which was hugely successful.

You can blame "Wall Street" all you want, but it seems a simpler explanation that in a blockbuster driven market, Maxis failed to deliver blockbusters. This isn't surprising in the least given most software projects fail and even more so with games. I find it surprising that Maxis lasted as long as it did quite frankly. An independent studio would probably not have survived Spore, and I think Maxis did largely because they were backed by "Wall Street".

Can we stop pretending that "Wall Street" is a completely non-thinking entity (/concept/idea/etc). The reason people talk about "Wall Street" is because we're talking about public companies, who are beholden to stockholders. "Wall Street" is the generic concept of stockholders. And the one thing stockholders as a generic concept ("Wall Street") was is profit growth. Because shrinking profits leads to lower stock price. It doesn't matter that you were profitable, if you weren't more profitable than last year, the generic concept of stockholders ("Wall Street") will, in a generic fashion, lose faith in your company. And if your stockholders lose faith in your company, they vote out your board of directors and replace them with people who will bring growing profits. It's not always the case (Amazon is a major exception), but in general, it holds true.

If you still don't think Wall Street has even an indirect say in what games get published when and at what quality, then I don't see a point in continuing this discussion. But I'll leave on the point of SpaceX not wanting to go public until they make it to Mars, because Elon doesn't believe that stockholders will let him take the risk of sending humans to another planet. Or, taking a step back from Wall Street and just talking investors, the idea from this very community that any exit for a startup is good and is favorable for your investors even if it leaves your customers high and dry. Or how about when Steve Jobs was pushed out of Apple because he wasn't making enough money? Apple raced to the bottom and lost, hard, in the pursuit of maximizing profit.

I'm not trashing the idea of Wall Street or of investors. This is EA's fault. But saying that investors don't influence a company's products is insane. Of course they do, to the fullest extent that the company will let them. Again, if you don't believe EA is completely controlled by their investors, take a look at the timing of the end of their fiscal year, the rushed release of SimCity, and the announcement of Maxis being shut down. That's not coincidence.

Sounds like the people buying games from EA are the ones being irrational in that description.

> The way I figure it, when value is being knowingly and unnecessarily destroyed, someone somewhere in the chain is being irrational.

Well, the model I see people using to describe EA basically amounts to buying studios with good long-term revenue prospects (known brands that, if consistently executed at a slightly below-average level, should maintain decent sales because the fans know what they're getting every time), and deciding to extract all of that future revenue all at once, by hyping up the latest incarnation of the series to extreme degrees while not bothering to execute at all. More sales now, less work now, no sales later.

If you want to stand by describing this as irrational, I wouldn't say the obvious candidate is EA shareholders. I'd say the obvious candidate is the studios who can't manage their brand well enough that it's worth more than the EA strip-mining approach. If you think that the long-term revenue stream has more "inherent worth", the studios are the ones squandering it.

(postscript -- I'm pretty sure I accidentally downvoted you when selecting a quote from your comment. I wish I could undo that.)

>But the stock market is supposed to be hyper efficient nowadays such that it's practically impossible to outperform it even for the experts

That's not true at all. Maybe in commodities, or foreign exchange or indexing, where algos can trade solely based on prices and public information it is true. But definitely not in individual stock picking. Domain knowledge is king here.

I'm not an efficient market hypothesis proponent in the least, but nearly every study, simulation, etc does in fact show that it is nearly impossible to beat the market via stock picking.

Also as an aside, commodities and foreign exchange are places where it is explicitly allowed to have non-public information...

The average retail investor does not have, nor seeks domain knowledge. He's 21-black type of guy. Of course indexing will beat him.

This is pretty much how a deadly virus works, right? Infect a particular game brand (cell) by buying (infecting) it, generate enough new copies of the virus (selling the game), then destroy it and release the virus onto the next cells. If the analogy is correct, the game market will either die, find a cure and eject EA or EA adapts and finds a way to coexist such as not to kill the host cells anymore.

Not really: in this case the games sold by an infected game studio aren't copies of the original entity that go on to infect other game studios. They're more of a waste product. EA consumes game studios for sustenance and excretes a steady stream of sub-par sequels as it slowly digests its prey.

Apparently I haven't been clear enough, so let me rephrase: What DNA is to a virus, money is to EA. Selling games is how they get their money, which is then used to infect more games and destroying them all in the process. Well that's at least how my analogy was supposed to work.

I understood you, but your analogy doesn't work. Viruses are replicators, they infect cells to spawn new generations. EA is a monolithic entity that consumes studios to sustain itself, all without creating a single copy of itself. Money is food, not DNA.

So cancer, then.

I like how it all just went worse and worse for EA - from virus to a predator shitting out bad games to a cancer of gaming.

To be honest, the virus might actually be more apt, if you change the kind of virus.

Take HIV for example: it attacks the immune system of the host, but is fairly difficult to transmit and relies on insufficient protection for that.

A studio that accepts a buyout from EA is like a person mainlining heroin using a needle that's been passed around a hundred different HIV+ heroin addicts. It gets the bug.

Sometimes it takes years for symptoms of illness to show. Some studios last decades before they waste away - and they last longer if they have proper treatment (in the case of Maxis, this was having Will Wright stay on board). But in the end it's incurable and terminal once treatment ceases, and the studio becomes weaker and skeletal before finally passing.

Except when a company dies, no people actually die. They can go on and create new games and new companies.

>Except when a company dies, no people actually die.

except that isn't always true. [0]

Suicide Rates Rising for Older U.S. Adults - Rates for 40-64 year-olds may be increasing due to financial circumstances, according to American Journal of Preventive Medicine

[0] : http://www.elsevier.com/about/press-releases/research-and-jo...

Are we really talking about suicide in a discussion about a company unsurprisingly shutting down? It is not because it is EA, which have a really bad reputation (which they partly deserve), than we should have a discussion of such a low quality.

this is nonsense

Excellent rebuttal. I like how you clearly outlined and explained your counterpoints.

There isn't much to outline or explain, because the original comment (creating an analogy between EA and a virus?) simply doesn't make any sense...

Care to elaborate?

Yeah, you nailed it.

Hahah excellent analogy.

If that's the plan... why even get out of bed in a morning. It's depressing? Stop giving these people money people.

EA bought Maxis in 1997. The Sims was released in 2000. We're now in 2015. I don't think that timeline is compatible with your theory.

My second-hand understanding of the arrangement is that from 1997 until roughly the mid 2000s, Maxis's autonomy was mostly protected by Will Wright's personal clout (plus possibly some terms around the acquisition, if there were any). He was high-profile, a charismatic media figure, and very against moving to EA's main campus in Redwood City—partly to retain Maxis's autonomy, and partly just because he lived in the East Bay and didn't want to commute to the Peninsula.

It helped that the first post-acquisition new title from Maxis was The Sims, a massive financial success, which allowed EA to feel comfortable taking a hands-off approach and allowing the studio to do weird things, so long as the weird things brought in piles of revenue.

From the mid-2000s, though, EA started merging bits of Maxis in, closing the Walnut Creek office and moving those staff to Redwood City, but still leaving a smaller Maxis remaining in Emeryville, which continued to be headed by Wright, with considerable autonomy. He used that autonomy to lead the Spore (2008) development, an ambitious concept that was not a financial success (though it arguably kicked off the current resurgence of procedural content generation in games). And then he left the company in 2009. At that point I think many people in the industry considered it inevitable that the remaining Maxis would be moved to the main EA campus sooner or later.

Your second hand understanding is pretty accurate.

In the case of Maxis, it's not accurate or fair for the person to say that EA's strategy is to "Buy studio, make them shovel a couple incomplete games out of the door, close studio, repeat."

That ignores the fact that EA buying Maxis enabled Maxis to successfully finish and ship The Sims, which became the best selling PC game of all time. And that The Sims division was a major part of EA (one of three main studios), which made a huge amount of money over a long period of time.

You're correct to say that Maxis and The Sims franchise enjoyed autonomy and protection thanks to Will Wright, while he was at the company. But after he left, he didn't have much to do with it, and it was on its own.

Many of the people working The Sims and SimCity franchises were the original people from Maxis or the early days of The Sims at EA, and they did a wonderful job of carrying on without Will. The infamous problems of latest SimCity release were actually Origin's fault, which the Maxis people unsuccessfully fought against, and had to take the rap for.

Lucy Bradshaw managed The Sims and SimCity since EA acquired Maxis, but EA threw her under the bus by insisting that she make public statements that simply and obviously weren't true, in an attempt to justify Origin's idiotic and non-negotiable mistakes that they pushed on Maxis.

Ocean Quigley was the lead artist for SimCity and The Sims at Maxis since before EA acquired us. Ocean invented the beautiful yet practical hybrid z-buffered 2.5D / real time 3D "holodeck" technology that enabled The Sims 1 to run well on non-accelerated low-end PCs in 2000, which enabled it its widespread success and appeal to casual gamers and young kids (who inherit their older sibling's low end PCs).

Ocean's technical and artistic contributions were as important as Will's game design contributions, and he stuck around for much longer. He led the ground-up redesign of SimCity (2013), which I think was both true to the original game, and took it into a totally new territory, away from the terrible tiles, and re-oriented around free-form roads.

Ocean and other Maxis employees were rightfully frustrated by Origin's interference in SimCity (specifically their insistence on online play, and their initial public pretension that offline play was impossible). After the release, Ocean left to pursue his own projects. After working on Will's ideas for so many years, he has a lot of his own original ideas that he wanted to work on. He explained how it was time to step out of Will's shadow in this article [1], which I empathize with.

[1] http://venturebeat.com/2013/07/19/ocean-quigley-steps-out-of...

Maxis hired me in January 1997 to work on The Sims (before it was given that name), then EA bought Maxis in July 1997, then we shipped The Sims 1 in February 2000, and I left soon after the release.

Then I did some contracting for EA to develop user created content tools like The Sims Transmogrifier, and I worked for Will's own company, the Stupid Fun Club, while he was still working for EA on The Sims expansion packs and Spore.

At the time, SFC was just Will's side project for, well, doing stupid fun stuff. We did things that were outside of EA's scope like robotics and reality TV shows, including Empathy [2] and Servitude [3] (which were never aired), and researched and developed some of his entertainment, toy and game ideas.

[2] http://donhopkins.com/home/RobotMovies/Empathy.mpg

[3] http://donhopkins.com/home/RobotMovies/Servitude.mpg

After Will finished Spore, he left EA in 2009, and EA invested in SFC. Then I joined SFC full time, where we worked on various projects including producing a viewer-scripted TV show, Bar Karma, with Current TV. [4]

[4] http://en.wikipedia.org/wiki/Bar_Karma

SFC was shut down after problems spinning off a company called HiveMind, that ended in lawsuits due to the melt-down and failure of a self-described "Serial Hackerpreneur" (cough, cough), who neglected to pay the rent, let alone secure the investments he was contractually obliged to, after which he baselessly accused Will of "atrocity" and "genocide", then failed to deliver on his blustering threat that he tweeted: "Looking for PR professionals to build awareness for "THE INCONVENIENT TRUTH ABOUT WILL", an exposé documentary, releasing on YouTube 6/2012."

>HiveMind [5]

[5] http://en.wikipedia.org/wiki/HiveMind

>It was announced in early June 2012 that the entire project was on hold due to ongoing legal disputes between company executives. Said Wright, "Hivemind is still a company. But it has no money. No nothing. It's just sitting there because of the litigation. It is frozen. It's so complex and there's quite a bit of disappointment... We have to find out where this is going in the near term." On October 26, Wright and HiveMind co-founder Jawad Ansari stated they had settled their disagreements regarding the company. Wright said, "We are pleased to have reached a friendly and respectful resolution. Jawad’s entrepreneurial energy, passion for the expansion of the online game industry and tenacious execution brought the necessary elements together to build Hive Mind to where the operating team can take the Company forward."

>Game pioneer Will Wright’s personal gaming startup falls apart in litigation (exclusive) [6]

[6] http://venturebeat.com/2012/06/03/game-pioneer-will-wrights-...

>“It didn’t work out at all,” Wright said. “Hive Mind is still a company. But it has no money. No nothing. It’s just sitting there because of the litigation. It is frozen. It’s so complex and there’s quite a bit of disappointment.”

>Ansari withdrew his lawsuit in Alameda, Calif., and in Delaware, the court appointed Wright, Randy Breen and Ansari as the board of Hive Mind. The litigation is still ongoing.

>Will Wright's Social Game Is In Legal Limbo [7]

[7] http://uproxx.com/gammasquad/2012/06/will-wrights-social-gam...

>To give you an idea of just how ugly this is getting, the guy who started all this, Jawad Ansari, recently tweeted that he’s looking for PR professionals to help him plug a YouTube “documentary” called “The Inconvenient Truth about Will”. Yeah, Jawad, if you have to start with the smear tactics, we’re just going to go ahead and assume you don’t have much of a case and are a bit of an ass.

>SimCity creator Will Wright settles lawsuit over Hive Mind studio control [8]

[8] http://www.polygon.com/2012/11/2/3589520/simcity-creator-wil...

>Ansari released his own statement, adding: "During my 18 years in the business I have never met anyone who has the creativity and vision of Will Wright. Over the period of several months working with Will Wright, Will's mentorship helped me develop a deep understanding of players' psychology and thus the ability to see the world in dimensions that I did not know even existed. For this I would always be thankful to Will!"

Yeeeeeah, and he's sooooo sorry he took the money. [9]

[9] https://www.youtube.com/watch?v=XA8PXbTb7OQ

EA has at least one other strategy, with EA Sports: every year they come out with a new and improved Football, Basketball, Hockey, Golf, etc. and people get it. Madden NFL has been going since 1988.

To be fair, EA Sports did discontinue some of their less popular games, such as Rugby and Cricket.

Actually the real strategy for those games is to buy exclusive multi-year contracts with the professional sports so that there is 0 competition.

And despite all of their shiny improvements, Madden 2005 and 2008 are considered the best from a gameplay and mechanics standpoint.

i can't speak for Madden because i'm not a fan/player. But for FIFA (a franchise that i've been playing since Road To World Cup 98), 2014 is easily the best one. They improved a shitton of stuff.

Also, they have FIFA Ultimate Team which has a whole meta game of players and cards (which i love).

Sadly that looks like it's enough... https://www.youtube.com/watch?v=Cxhs-GLE29Q

They also discontinued Baseball, which pretty much made the Xbox platform crap for a baseball fan (my son).

The SimCity reboot and The Sims 4 were a bad joke. So it's not surprising. It was definitely EA's fault to guide SimCity and Sims 4 in the wrong direction. Less content, fake simulation, even more DLCs, always-on-DRM, smaller game worlds, more casual gameplay. EA was also named the worst company to work for in the U.S.

EA did a fairly poor job with SimCity, I agree. A very, very poor job. EA was named the worst company to work for in the US, but that was years and years ago. They've really done a better job at keeping their developers happy (I worked there two years ago as a dev). I mean sure, Alpha and Beta can still be brutal, but what game studio isn't like this? Overall, I enjoyed working at EA and would work there again if they didn't offer me such a shitty salary. A shitty, shitty salary. Pretty much the only thing I can complain about. Oh, and no free food.

> EA was named the worst company to work for in the US, but that was years and years ago

Apr 09, 2013: EA wins Consumerist's Worst Company in America poll for second year in a row

http://www.polygon.com/2013/4/9/4205402/ea-wins-consumerists...

there's a difference between "worst company" and "worst company to work for". worst company is voted upon by everyone. Everyone on the internet, which is the most vocal group, hates EA which is totally understandable.

Worst company to work for is voted by employees. Most people who work at EA enjoy their time there. They might not agree with some company decisions, but overall, it's a great place to work.

Please realize there is a difference and that list is also fairly biased. I mean, its fucked up how a video game company is worse than banks who take billions of money from people through fees, interests, and all other random shit.

Worse than average for the game industry?

I'm making less than 60k over here :(

(But honestly I'd rather do something I enjoy and make less than something I don't even if it pays more)

yeah :( they offered me starting pay of 60k, which granted is not the worst. It's alot more than other jobs, but I just had a better offer somewhere else that I couldn't say no to (though not in games). I had other priorities that had to come first than my love for games :(

Some people think this is happening to Bioware, too. See: http://i.imgur.com/e8Wp0yZ.jpg

Bioware have successfully pivoted from rich story-driven RPG territory into modern military shooter (butwithlasers!) territory, which seems like it will be predictably profitable for at least another decade.

Interesting how no one has mentioned stock buybacks yet. These job cuts are a cost cutting exercise, giving the company more funds to buy back stock with, making the stock price go up, meaning the executives get heftier bonuses.

The "fire people to buy back stock in order to make the stock price go up" strategy is extremely popular in this economic environment.

This story about their $750M stock buyback plan supports the assertion: http://www.streetinsider.com/Stock+Buybacks/Electronic+Arts,...

On the plus side, it looks like there is a vacancy in the simulation game market...

Coincidentally I was just looking back into the state of city simulation games the other day. On my list of "Games I have played beyond any reasonable number of hours" is Sim City 4 with the various mods available. I was, like most, disappointed with the 2013 offering. Cities XL never really piqued my interest, and I've also switched entirely to Linux for my desktop needs.

Then the other day I heard about an upcoming title called "Cities: Skylines", which seems like it has promise from a gameplay standpoint. Even better, it's cross-platform to both Linux and Mac.

Edit: It's interesting that the recommended hardware for Linux is a lower bar than on Windows (see bottom of https://www.paradoxplaza.com/cities-skylines). Can anyone with a game dev or graphics background speculate on that?

I quite like sim building games. My most recent favourite is Banished http://www.shiningrocksoftware.com/game/ Not nearly as complex as sim city but still very enjoyable

Wow, this looks great. I think I've actually seen this earlier sometime, but dismissed it since it was only available on Windows. Now that I actually have a decent Windows laptop, I'll definitely try it out.

I love games from Paradoxplaza some of the best strategy games such as Hearts of Iron 3 and of course my all time favorite Europa Universalis 4 which sucked away hours and days of my life are made by them

I've also been following the development of CityBound:

http://blog.cityboundsim.com/

I am cautious about C:SL. I mean, it's a day one buy but my hopes are not super high. Their last title, Cities in Motion 2 - was something of a hot mess, with a design that really didn't gel and was in most respects worse and less fun than CiM 1.

Plus, they build their games in Unity, which is....not the best for these sorts of games.

One wonders whether it'll have the traditional Paradox steep learning curve (i.e. vertical)

> I was, like most, disappointed

but can you even??

He wasn't, like, totally most disappointed, duh. pops bubblegum

He was disappointed, a sentiment that was shared by many others.

> is this really more profitable than actually making good games?

I know I'm going to sound like a terrible elitist snob, but the target audience for today's mainstream video games are not exactly the top layer of humanity. It's pretty much a tale of milking the stupid, i'm afraid.

Is it EA or just how game studios work?

Historically, studios either put out zero games or one game. I think it's the fairly extreme outliers that do it over and over and most of them deal in sequels. If you look inside the game industry, I think I would be hard pressed to do a second game if I made games. It doesn't look like an easy feat to keep the team magic working. Likewise, there seems to be no shortage of up and comers that want to make a new game. The studio might not be as valuable as we want to think.

Which would you bet more money on: Maxis coming up with a new hit game concept or the masses going ape over sim city 2015 on ps4? And by "ape" I mean willing to buy it for over $30. I have a hard time with both options, just like ea.

Eliminating competition.

Pretty good strategy from a financial perspective if you consider game purchasing to be a zero-sum game. If your average consumer is willing to spend $XX on games, and $YY is going to solid competitor ZZ, then acquiring and shutting down ZZ, removing them from the game industry, frees up that $YY to be spent on EA games.

What I don't understand about that strategy is what prevents the acquired employees from re-forming as a new company? Are there non-competes in place? Is it difficult to get financing to form a AAA game company? I'm presuming that, regardless of what happens, it takes a while.

>What I don't understand about that strategy is what prevents the acquired employees from re-forming as a new company?

Nothing prevents this, there had been many studios by former employees of a shut down studio (e.g. Ensemble -> Robot, Pandemic -> Killzone, Incognito -> Lightbox, Big Huge Games -> Impossible etc. etc). However, usually the reason a studio had been shut down was its poor performance and not some evil marketing plan so the respawned studios inherit the problems of the original studio complicated with the talent drain that happens during such a transition.

It is very difficult to get financing for a AAA game company since the industry is so hit-driven. Moreover, it'd be rather difficult to find investors just after the studio you worked for just shut down due to poor performance.

Financing AAA games through a studio is similar to dealing with a record label, the cards are stacked agains you unless you really make it big.

I hope that is EA's strategy, as it will end them.

The overhead of entering the games industry is cheaper than ever, and as a result we are seeing more and more independent game developers successfully penetrating the market.

EA has been around for 30 years though, so whatever they are doing, it works - what I don't understand is why does it work.

EA survive off of Madden and FIFA licenses. They don't have to spend that much money on improving the game year after year, but millions of people purchase them almost religiously.

They don't spend a lot on development but they certainly do on licensing fees.

Agree with @interesting_att - it's all about EA Sports. As much as I despise EA, even I get sucked into FIFA. Their sports franchise will support one hundred studio fuck-ups - annual minor updates are as good as owning a money printing press.

I personally agree. But consider none of this is on the radar of the stereotypical MBA/middle manager/C-level execs/...

Maxis had a nearly 18 year run after the EA purchase. A lot of independent studios die over that sort of timeframe. They released every entry in the fairly successful Sims series, as well as two well regarded entries for SimCity.

It's been a while since they put out anything special, but overall the company seems to have done well by EA.

I think that is the point - it isn't making them money!

When you think of the brand "Maxis", what do you think? Either the Sims or Sim City.

But the brand EA is a far more recognisable (and valuable).

Like it or not, EA buys a company, milks it for what its worth, then kill it off.

I doubt the EA name will continue to be valuable. I've already learned not to buy any EA games as it'll be garbage. I have no doubt that the average consumer will start to see that soon.

It was a blessing in disguise when EA started Origin and stopped selling their shovelware on Steam. Now I don't need to worry about accidentally purchasing one of their games!

I think about old Apple and Amiga games like SimLife... the Sims wasn't really in character for Maxis, it was a perfect EA game

I don't think the EA brand is worth much. It took a big hit to its reputation with the always-on DRM strategy, and it's widely regarded as a crappy place to work.

Business says "we exist to make a profit".

People don't tend to be profit maximisers in their actual work.

I don't know many workers who think "which one of these choices is most profitable for the company"

Is this a joke?

No. It's one of the core beliefs of Behavioral Science

Sales, Marketing and Accounting departments are filled with people whose only job is to think how to make more money for the company. Is that covered in the core beliefs of Behavioral Science?

You're missing the point. They don't think about how to maximise profit. They think about how to hit their sales target, how to run successful marketing and how to perform their accounting function.

Assuming they even do that. Their daily thoughts are more likely to be : How can I make sure my superiors notice I perform my role. How can I make sure I don't fuck this up. What do I need to do to get a promotion. I don't feel fulfilled, I think I'll go find a job elsewhere, I wonder where I should start looking. etc. etc.

When you posted these comments were you thinking : how does posting on HN maximise my profit ?

The fastest way to show that you don't understand what you're talking about is through analogy.

I'm paraphrasing heavily, not to hurt your feelings. Less voodoo science, more thinking.

I'm not hurt in the slightest.

To paraphrase: Your opinion is meaningless to me.

Let's not forget about human resources: filled with people whose only job is to think how to make more money for the company by spending less on employees.