How Electronic Arts Lost Its Way

EA is spending too much to make video games for systems that cost too much for consumers, and its new titles aren't hooking gamers. Is it takeover time?

Expectations ran high almost two years ago, when John Riccitiello took the helm of video game maker Electronic Arts (ERTS). Formerly operations chief for EA, Riccitiello had departed in 2004 to co-found private equity firm Elevation Partners. He came back with a clear mandate to slash costs, boost game quality, and distance EA from a risky strategy of overspending on titles based on big names such as Tiger Woods and James Bond.

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