Electronic Arts (NASDAQ:
) CEO John Riccitiello resigned from his post on Monday after the
market close, taking responsibility for the company's decline.
The company also provided a downbeat outlook for the current
Over the last five years, the stock has lost around 60 percent
and EA has not been able to recover from losses incurred in late
2008. The company's current Chairman Larry Probst, who previously
worked at EA as an executive, will take over Riccitiello's
position until a permanent replacement can be found.
In a letter to employees, Riccitiello said that he was taking
responsibility for "shortcomings" in the company's financial
results this year. "It currently looks like we will come in at
the low end of, or slightly below, the financial guidance we
issued to the Street, and we have fallen short of the internal
operating plan we set one year ago," he said in the letter. "For
that, I am 100% accountable."
In late trading on Monday, EA shares were up better than 2
percent to $19.18 in the wake of the news.
Mr. Riccitiello had been the company's CEO since 2007. Under
the executive, the company has attempted to transition from
focusing on disc-based games for consoles such as the PlayStation
and XBOX to developing games for PCs, social networks and mobile
devices. For years, the company was able to boost its stock price
with the success of title such as the Madden NFL football
franchise and other popular sports titles.
Under Riccitiello, EA invested heavily to try to re-position
the company. The game publisher purchased PlayFish Ltd. for $275
million and spent $1.3 billion on PopCap Games. Mr. Probst was
the CEO of Electronic Arts prior to Mr. Riccitiello's hiring in
2007 and also worked for the company in various roles since
In a statement, he said that Mr. Riccitiello's tenure at EA
was marked by "bold decisions, a big vision for online games, a
passion for product quality and an enduring respect for the
people who work here."
Electronic Arts also provided updated guidance for the current
quarter. The company said that results will likely be at the low
end or slightly below its January forecast calling for earnings
per share in a range of $0.57 to $0.72 and revenue of $1.03
billion to $1.13 billion.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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