EA: The Human Story
My significant other works for Electronic Arts, and I'm what you might call a disgruntled spouse.
EA's bright and shiny new corporate trademark is "Challenge Everything." Where this applies is not exactly clear. Churning out one licensed football game after another doesn't sound like challenging much of anything to me; it sounds like a money farm. To any EA executive that happens to read this, I have a good challenge for you: how about safe and sane labor practices for the people on whose backs you walk for your millions?
I am retaining some anonymity here because I have no illusions about what the consequences would be for my family if I was explicit. However, I also feel no impetus to shy away from sharing our story, because I know that it is too common to stick out among those of the thousands of engineers, artists, and designers that EA employs.
Our adventures with Electronic Arts began less than a year ago. The small game studio that my partner worked for collapsed as a result of foul play on the part of a big publisher -- another common story. Electronic Arts offered a job, the salary was right and the benefits were good, so my SO took it. I remember that they asked him in one of the interviews: "how do you feel about working long hours?" It's just a part of the game industry -- few studios can avoid a crunch as deadlines loom, so we thought nothing of it. When asked for specifics about what "working long hours" meant, the interviewers coughed and glossed on to the next question; now we know why.
Within weeks production had accelerated into a 'mild' crunch: eight hours six days a week. Not bad. Months remained until any real crunch would start, and the team was told that this "pre-crunch" was to prevent a big crunch toward the end; at this point any other need for a crunch seemed unlikely, as the project was dead on schedule. I don't know how many of the developers bought EA's explanation for the extended hours; we were new and naive so we did. The producers even set a deadline; they gave a specific date for the end of the crunch, which was still months away from the title's shipping date, so it seemed safe. That date came and went. And went, and went. When the next news came it was not about a reprieve; it was another acceleration: twelve hours six days a week, 9am to 10pm.
Weeks passed. Again the producers had given a termination date on this crunch that again they failed. Throughout this period the project remained on schedule. The long hours started to take its toll on the team; people grew irritable and some started to get ill. People dropped out in droves for a couple of days at a time, but then the team seemed to reach equilibrium again and they plowed ahead. The managers stopped even talking about a day when the hours would go back to normal.
Now, it seems, is the "real" crunch, the one that the producers of this title so wisely prepared their team for by running them into the ground ahead of time. The current mandatory hours are 9am to 10pm -- seven days a week -- with the occasional Saturday evening off for good behavior (at 6:30pm). This averages out to an eighty-five hour work week. Complaints that these once more extended hours combined with the team's existing fatigue would result in a greater number of mistakes made and an even greater amount of wasted energy were ignored.
"The last transition I bought $50 shares for $25!"
cogratulations, you got a bargain
" Look what happened in March - from $70 down to $50 in a couple days, for lost expectations."
yup, right again and right back up again, in case you haven't been looking we're back in the $60s
"a 10000 post blog would disagree with you."
you'll ALWAYS find someone that has the reverse opinion or is on the other side of the trade, that's just the way it goes...
"I can't tell you my relationship with this industry, but I speak what I know."
oh yeah, and don't reveal yourself...it's just too much information
>>Now you tell me what you think will happen, please.<<
ERTS dances with $70 by the end of the FY05 based on the strength of the Xmas 05 SKUs and the run-up to E3 '06. $80 by Xmas 06 is entirely achievable.
"been thru many, many transitions and has fared very well..."
The last transition I bought $50 shares for $25! ERTS cut in half because they COULDN'T SUSTAIN 20% yoy growth and the street punished them, at least temporarily. With a pe of 45 they cannot
I agree that ERTS does a lot right, and has a huge catalog that ATVI and TTWO cannot touch combined. I also agree that there are some enormously talented folks there. The fact remains - with Godfather out of Xmas ERTS cannot achieve the 20% growth the street wants. The examples I cited were not just small absorbable titles. They represented 10% of net!
So what do I think will happen? I think in spring we'll find out that ERTS grew by single digits this fiscal year, and forward guidance will be cautiously reduced leading into a trans year. That puts the price at $50 for awhile. Now you tell me what you think will happen, please.
"..they take care of their own and i'm NOT the only one that thinks that"
THREE class action lawsuits and a 10000 post blog would disagree with you. I can't tell you my relationship with this industry, but I speak what I know. Two out of 4 of EA's major studios are in trouble, and without them running full force ERTS will hurt next year.
>>How about those examples from the past: MOH and Goldeneye. EALA was forced to lay off nearly 100 people at the "Premiere Hollywood Studio" because of the above blunders. There's another full team not working.<<
You misunderstand the situation. EALA wasn't "forced" to lay off these teams. They cleaned house. I salute the fortitude EA showed by refusing to accept mediocrity.
"Why do I own ERTS? Because I believe they will have a great Xmas this year."
and then what?..they drop the ball and make no more viable products because YOU say so?..this company has been around a long time and has been thru many, many transitions and has fared very well...
contrary to what you believe, they have a deep bench of talent and until YOU work for them, i don't believe you have anything to say about their labor practices..they take care of their own and i'm NOT the only one that thinks that, read the post by SINEII, he wrote it in response to YOU
Thanks for your opinions orange.
I always find it interesting when EA takes a bashing based on titles representing a small percentage of their folio. If you compare across the industry, they have a higher percentage of titles that ship on time, a higher percentage of hits, and very few scrapped titles. Then look at the revenue numbers (as just posted for this month), Madden has probably taken more in revenue than the rest of the *top 100 games added together*. And that's just one of a huge portfolio that no other company comes close to.
re: Loosing their best assets, I don't know what the retention rates are, but until I see some figures which compares them against their competitors I will assume they are no worse, (if not better, looking at their excellent facilities, and knowing engineers and artists who work there and are well looked after).
It's easy to pick up on a few failings (as in any company), but from my experience they're getting a lot more right than they are wrong.
The examples I cited were within the past 12 months; I'm not talking about fiscal schedules here, I am talking about patterns and bad habits that will catch up to EA. YOU made the comment that negative talk about EA labor practice has no business on this board; I am trying to tell you why it does. Why do I own ERTS? Because I believe they will have a great Xmas this year. I think you'll agree that a title like Godfather won't make as much money in spring as it would at Xmas, nor will it have the fiscal shelf time. The game looks to be in fiscal 06 for about 3 or 4 weeks. That will ultimately hurt fy06, it is plain as day, and it is in "the future". So what about 07? I hear Godfather has almost 250 people working on it. Such a luxery to have those kind of resources! Too bad that's three or four full teams that aren't yet working on next year's projects. How about those examples from the past: MOH and Goldeneye. EALA was forced to lay off nearly 100 people at the "Premiere Hollywood Studio" because of the above blunders. There's another full team not working. I still have an article from a year ago that talks about how this studio was supposed to be grabbing hot Hollywood properties. Guess not.