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SAN FRANCISCO, June 18 (Reuters) - Electronic Arts Inc. ERTS.O, said on Friday it will reorganize the world's biggest video game publisher into four units, in an efficiency drive by its new chief executive.
Under the plan by CEO John Riccitiello, EA will consist of units that focus on sports, casual games, its “Sims” virtual dollhouse franchise, and other games.
EA said the changes, which will not involve job losses, should help it save money at a time when the cost of developing a top-tier game can run up to $20 million.
“It makes a lot of sense. It streamlines the company,” said Todd Greenwald, an analyst with Nollenberger Capital Partners.
“It goes with Riccitiello’s desire to make people more accountable. When a game misses a deadline, when the quality is bad, he wants one person to explain why,” Greenwald said.
Riccitiello, the company’s former chief operating officer who left in 2004 and rejoined in April, said last month that he intended to realign the company and improve its ability to act quickly.
“He’s had a very strong and aggressive change agenda and what he’s been framing as a challenge to the management team is that we are facing a market that is incredibly diverse and complex,” said Frank Gibeau, head of the new EA Games unit.
The change “streamlines decision-making, increases speed to market, enhances accountability and allows us to be more experimental, so we can really open up and leverage our scale long-term”, Gibeau said in an interview.
The changes, based on the success of a pilot program that placed games based on “The Sims” franchise into their own unit, mean it will require fewer executives to sign off on new games or to approve launching an existing game on a different platform or in a different regions.
“We ran an organizational experiment and it was pretty damn successful. The Sims grew aggressively,” Gibeau said.
Gibeau will be in charge of the largest unit of EA games, including its “Battlefield” series of online shooters, “Need for Speed” street-racing titles, and its “Command & Conquer” strategy games.
EA Sports, which includes the company’s “Madden” football, “Tiger Woods PGA Tour” golf and “NASCAR” racing games, will be run by Executive Vice President Joel Linzner until a permanent head can be found.
Earlier this month, EA recruited Kathy Vrabeck, former head of publishing for rival Activision Inc. ATVI.O, to run its casual games unit. Such games, which are usually played online or on mobile phones, are a small but rapidly growing part of the industry.
Shares in EA were unchanged in extended trading after closing down 1.5 percent at $49.71 on Nasdaq.
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