Hi everyone — welcome to another issue of Naavik Digest! If you missed our last one, be sure to check out our analysis of Ubisoft’s ongoing struggles and what it might take for the company to turn its business around. In this issue, we’re breaking down EA’s recent reorganization and what it means for the sports publisher’s lineup and divisional structure.
Nexon’s CEO on Leadership, Virtual Worlds, Innovation & Antifragility
Nexon is one of the largest and best-performing companies in the gaming industry, but too few Western onlookers fully know why the business excels. That changes today. Nexon CEO Owen Mahoney joins Naavik co-founder Aaron Bush to discuss his journey in games, what he’s learned from leading a large global business, and how Nexon builds long-lasting virtual worlds. They also discuss the importance of antifragility, what “weird” new initiatives could define Nexon’s future, and why companies often face internal resistance to innovation.
You can find us on YouTube, Spotify, Apple Podcasts, Google Podcasts, our website, or anywhere else you listen to podcasts. Also, remember to shoot us any questions here.
Breaking Down EA’s Executive Shakeup
Written by Miikka Ahonen, Co-founder of Lightheart Entertainment
If there's one thing that Electronic Arts loves, it's a good reorganization. CEO Andrew Wilson outlined one such in a blog post last week.
The main outcome of the shake-up is splitting EA Sports as a separate unit and grouping the rest of EA's business into another unit called EA Entertainment. Under the new structure, EA Sports will continue under EVP Cam Weber (now president), while former COO Laura Miele will now pilot EA Entertainment as president of the division. EA Entertainment is further divided into core action games (Vince Zampella), single-player and lifestyle games (Samantha Ryan), and mobile (Jeff Karp).
It might sound like a cosmetic change, as most of these executives already had equivalent responsibilities. However, this does add a layer of hierarchy: In EA's previous configuration, the group general managers reported directly to Wilson.
Finally, Wilson’s post also details some changes at EA’s central management: Chief Experiences Officer Chris Bruzzo is retiring, and CMO David Tinson will replace him. Meanwhile, CFO Chris Suh is taking up a job at Visa, and senior finance executive Stuart Canfield will replace him. While Wilson is not explicit about it, Laura Miele’s former COO role ostensibly ceases to exist.
Based on what's publicly available, the newly formed units will look as follows (selected studios and titles only):
EA Sports
- EA Vancouver (FIFA aka EA Sports FC, NHL)
- EA Tiburon (Madden, PGA Tour, College Football)
- Codemasters (F1)
EA Entertainment
- PC and console studios
- Respawn (Apex Legends, Star Wars Jedi series)
- Bioware (Dragon Age, Mass Effect)
- DICE, Ripple Effect, and Ridgeline (Battlefield)
- Maxis (The Sims)
- Criterion Games (Need for Speed)
- Mobile studios
- Capital Games (Star Wars: Galaxy of Heroes)
- Tracktwenty (SimCity BuildIt)
- Playdemic (Golf Clash)
- Glu (Design Home)
- PopCap Games (Plants vs Zombies, Bejeweled)
EA’s New Structure
EA Sports is the company's cash cow with its crown jewels, FIFA and Madden. Its yearly tentpole releases and live-operated games provide predictable revenues and high profitability. As the cooperation between EA and the soccer governing body FIFA ends, EA's FIFA titles will rebrand as EA Sports FC for future releases. With the absence of formidable competition, the name change is unlikely to affect sales. Getting rid of the costly licensing deal might only end up increasing EA's margins.
EA Entertainment is EA Games renamed and comprises everything else at the company. The unit includes both multiplayer and single-player AAA titles, as well as EA's mobile business. EA Entertainment will thus combine spiky revenue from single-player experiences (e.g., Dragon Age, Star Wars Jedi) and steady free-to-play cash flows from live-operated mobile games. Competitive multiplayer games (e.g., Apex Legends) fall between the two business models.
Notably, EA Mobile is still fully tucked within EA Entertainment, even as its share of the company’s net revenue has risen to 17%. In fact, from Wilson’s post, it’s not perfectly clear where the mobile version of FIFA sits. After all, FIFA Mobile is EA Mobile's biggest moneymaker. The game is developed by Vancouver-based EA Sports. However, as a mobile SKU, the business technically now belongs to EA Mobile within EA Entertainment.
The news of EA's restructuring comes three months after the company announced it was laying off 6% of its workforce. Furthermore, earlier this year in January EA shut down Industrial Toys. These actions do suggest that Wilson is preparing the company to be a more enticing acquisition target. It’s only been a year since rumors surfaced about acquisition talks with NBCU and potentially other suitors. Perhaps EA thinks these divisions are more valuable as distinct units that EA could even sell off separately.
The more likely case is that this is business as usual: just a yearly game of executive musical chairs. Considering the casual communication channel and internal focus, it may well be that the biggest thing to change is the number of Wilson's direct reports.
Content Worth Consuming
Has Xbox really lost the console wars? (Tom Warren / The Verge): “The second day of the FTC v. Microsoft hearing was really all about one man: Phil Spencer. The Xbox chief took the stand to discuss Microsoft losing the console wars, Sony’s aggressive and hostile competition, and to paint Xbox in a distant third place where it’s struggling to compete. Spencer also revealed Microsoft looked at buying Zynga to improve its mobile gaming prospects and acquired Bethesda after learning that Starfield might become a PlayStation exclusive. He also, importantly, swore under oath that Microsoft won’t pull Call of Duty from PlayStation. That promise turned into some frustrations with the FTC’s line of questioning from Judge Jacqueline Scott Corley and some testy exchanges between the FTC’s lawyer, James Weingarten, and Spencer.”
Games will need a radical rethink to work in AR (Brendan Sinclair / Gamesindustry.biz): “In one sense, having games play out within our real-world environments sounds like it would be a boon for immersion. What could help convince you something is real more than seeing it in your world, interacting with things that actually are real? But when we talk about immersion in games, we're usually talking about engrossing escapism more than convincing illusion. Video games are often power fantasies, and they place a premium on things that are, for lack of a better word, cool. Lots of people find pirates cool. Monstrous or undead pirates? Even cooler. Space marines in power armor, ninja warriors, hooded assassins, scary weirdos in From Software games? All cool, and all build the kind of ‘player fantasy’ on which AAA publishers have built their businesses.”
Inside Yager Development's Failed Attempt To Make Dead Island 2 (Blake Hester / Game Informer): “Understanding what went wrong requires understanding many different factors – how Deep Silver makes deals, how Unreal Engine 4 works (or didn’t, at the time), and how unprepared the team at Yager was for the project it'd taken on. To make sense of it all, sporadically, between 2019 and 2023, we spoke to numerous people from the development and publishing side to find out exactly what Dead Island 2 was in its first iteration at Yager and what went wrong along the way. Everyone we spoke to did so under the condition of anonymity to share what they know, not wishing to publicly break non-disclosure agreements.”
King's Luken Aragon talks 10 years of keeping Candy Crush on top (Paige Cook / PocketGamer.biz): “Candy Crush Saga has become one of the biggest and most popular games on the mobile market. So, not only is it important that developers ensure that content is kept fresh for players, but marketing plays an essential role in helping to retain fans and ensure that new ones continue to catch the bug. We caught up with Candy Crush Saga’s VP of marketing, Luken Aragon, to discuss winning at the Mobile Game Awards in the best marketing/PR category and the secrets behind Candy Crush Saga’s winning marketing strategy.”
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