EA Buys BioWare: Insider Views October 11, 2007 Jakub Wojnarowicz

Introduction

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A key figure at Elevation Partners was John Riccitiello, a former Electronic Arts COO who left to co-found the investment giant, and quickly spearheaded the acquisition of the aforementioned BioWare-Pandemic. Earlier this year, John returned to EA as a CEO. What has apparently been brewing since then is his desire to acquire BioWare-Pandemic for the world’s largest game publisher. Today, after weeks or even months of negotiation, the deal was announced.

At 2PM mountain time, the staff of BioWare in Edmonton, Canada, and Austin, Texas, were summoned for a company meeting. The staff, viewing each other on video conference screens, were told that as this meeting was going on an announcement was being made of the sale of BioWare-Pandemic to Electronic Arts. Elevation Partners, which had bought into the vision of a super developer dictating terms to publishers, saw John Riccitiello drive up with a dump truck of money – three quarters of a billion dollars, most of it in cash – right up to their doors. While there was an opportunity for a potentially glorious if uncertain future as owners of a giant independent game studio, Elevation Partners saw the bird in hand and decided to enjoy the almost 100% return on investment over two years, depreciation of the American dollar notwithstanding.

The meeting continued, with most consequences, the reasoning behind the buyout and the positives being spelled out for the BioWare staff as they remained mostly silent and attentive. Employees of independent game developers don’t work at independent game developers because they like conglomerates like Electronic Arts. This is doubly true in the case of BioWare Austin, where at least a third of the staff is ex-EA. The average gamer, if he could sit down with the average game industry employee, would be surprised to see how much similarity of opinion there is about certain game publishers and their practices.

The company line is no doubt something like “BioWare is thrilled at the opportunity to work with the world’s leading game developer. We have been looking forward to blah blah blah”. A dose of reality can be found by hanging out the BioWare offices and overhearing some honest and refreshing opinions. While this precludes me from naming names, I do live in Edmonton and if there’s one thing I know, it’s where the BioWare offices are.

The reaction

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John Riccitiello is also the man, who in his first interview since taking over of EA, said that ’sequels are boring’. Does that sound like a statement coming from the mouth of a traditional EA executive? I don’t think so, and apparently enough employees at BioWare agree enough to reserve any outcries of doom at least for a while.

The sober, thought-out feeling is that Riccitiello hitched his wagon to BioWare-Pandemic. They won’t be subject to the regular EA hierarchy, they won’t be given design ideas by EA, and they won’t be indulging in sequelitis (though as an aside, the Mass Effect 2 staff would love the opportunity for a sequel). In fact, the chain of communication will be John Riccitiello -> Frank Gibeau (President of EA Games) -> Greg Zeschuk & Ray Muzyka (BioWare co-founders). That’s it.

Our bet is that Riccitiello has done as much as he can at EA proper without bringing about a revolt against himself. The company is quite entrenched in its ways after a decade and a half of leadership from Larry Probst, and that is when it developed the reputation for buying a developer and milking its properties drier than a Sahara rock. Any further changes risk upsetting the shareholders and management who don’t see a creatively empty shell, but rather a highly profitable company that has found the formula for growing money off video game trees.

The BioWare-Pandemic buyout may be a bid to start EA on a new course, one already plotted by Activision: acquire a good developer, finance them, and permit them room to do their own thing, offer leadership and a kick in the ass only if necessary. Presumably the new EA CEO sees the disastrous long-term consequences of creative bankruptcy, and is seeking to remedy them by allowing BioWare and Pandemic the freedom and finances to do something spectacular on a regular basis. Specifically, during the conference John had stated that EA was impressed with BioWare’s Metacritic score, a rating in which EA has slipped in over the past few years, and a statistic which caused on analyst to say the EA brand has been tarnished

The downside, however, is that John has arguably bet his own personal political bank at EA on BioWare and Pandemic. Should they not deliver to expectations, their failure could be an excuse for traditional EA elements to remove Riccitiello and return to EA’s profitable-but-boring sequelitis ways. This, of course, will mean the doom of BioWare in the way that Westwood, Origin, Bullfrog, and Maxis were wiped out. With any change comes friction, and there is little doubt that by cutting into the bloat in EA and by bypassing the traditional EA power structure with BioWare-Pandemic, John Riccitiello has created enemies in the company. Like, say, people who think that a slow, unwieldly, but attractive interface in the name of the Almighty Brand is a good idea.

If John Riccitiello is for real, to which we’re giving a tentative nod, and if he can tame the EA Beast, it’s up to BioWare and Pandemic to see his vision through.

The challenge for BioWare will be calming all the ex-EA folk, most of whom are in Austin and left even before the days of the EA Spouse scandal which helped normalize work hours at the company. Then the company needs to work on its delivery schedule, notorious as they are for always being late.