EA Lays Off Hundreds

EA Announces Layoffs and Studio Closures

On Tuesday, EA lays off hundreds of staff impacting roughly 670 workers across the company. EA is also closing several studios as part of a major restructuring to “streamline the organization.”

According to an internal email from CEO Andrew Wilson, EA is “moving away from licensed IP and doubling down on [their] own original IP.” The changes will allow EA to “provide greater focus and accountability.” The restructuring comes amid declining sales and profits.

The studios being shut down include Full Circle and Firestorm. Employees at the studios, as well as contractors across EA, will lose their jobs. EA says they will try to find new positions for as many employees as possible.

The decision is a pivot in strategy for EA, which has relied heavily on popular licensed properties like Star Wars and FIFA Football in recent years. While the licensed games have been commercially successful, they come with costly licensing fees and less creative control.

The layoffs and closures are a painful but necessary step to ensure EA’s long term success. By refocusing resources on internally developed properties, EA can invest in innovative new experiences and build franchises that stand the test of time.

Though difficult, these strategic decisions will help EA thrive creatively and financially going forward. The company remains committed to making amazing games, providing an inclusive work environment, and supporting employees during this transition.

EA Shifts Focus Away From Licensed IPs

Reducing Licensed IPs

Electronic Arts (EA) announced a shift in business strategy that will see the company move away from licensed intellectual properties (IPs) in favor of focusing on its own IPs. EA CEO Andrew Wilson stated that the company will be "shifting our focus and resources to franchises that we own and control." This means EA will be reducing investments in licensed IPs like Star Wars in order to devote more resources to its own IPs such as The Sims, Apex Legends, and Battlefield.

Focus on Live Services

EA also announced an increased focus on live services and mobile games. Live services, which include battle passes, virtual currencies, and downloadable content, have been a lucrative source of revenue for EA. Games like FIFA Ultimate Team and Apex Legends have generated billions of dollars through live services. EA aims to implement more live services in their games going forward.

Mobile Gaming Expansion

Finally, EA plans to expand into the mobile gaming market. The mobile gaming industry is the fastest growing segment in gaming and EA seeks to gain a larger foothold. EA recently acquired Glu Mobile, a mobile game developer, for $2.1 billion. The acquisition of Glu combined with EA's increased focus on its in-house mobile gaming studio, EA Mobile, signals the company's ambitions in the mobile gaming space.

In summary, EA is shifting its business strategy by reducing licensed IPs, focusing on live services, and expanding into mobile gaming. The coming years will see EA pivoting to focus on the parts of the gaming industry with the most potential for growth. While this new strategy is risky, if successful it could solidify EA as an industry leader for years to come.

What This Means for the Future of EA Games

Shift to Live Services

EA’s decision to lay off employees and sunset some game titles signifies a strategic shift to focus more on live services. Live services refer to games that continue to operate and generate revenue for a long period of time after their initial release. This includes offerings like downloadable content, subscriptions, microtransactions and virtual goods. EA has found success with live services in games like FIFA Ultimate Team, The Sims 4 and Apex Legends. By emphasizing live services over packaged goods titles, EA aims to build a more consistent and predictable revenue stream.

Licensed IPs on the Decline

EA also announced they are “moving away from future licensed IP.” Licensed intellectual properties refer to brands, characters and stories EA does not own but pays to feature in their games. Some examples are the Star Wars, Marvel and NFL licenses. While licensed games have been very profitable for EA in the past, they come with substantial costs to maintain the license and less control over the creative direction. Shifting focus away from licensed IPs will give EA more flexibility and control over their game offerings going forward.

Refocus on EA’s Owned IPs

With less emphasis on licensed properties, EA will refocus efforts on growing and supporting their own IPs. Franchises like Battlefield, The Sims, Apex Legends and EA Sports titles are wholly owned and operated by EA. Investing in these properties provides more stability and higher profit margins for the publisher in the long run. Supporting owned IPs also allows EA to build direct relationships with players and keep them engaged within the EA ecosystem.

Overall, the changes at EA signify a push toward more sustainable business models that provide steady revenue streams and higher control over creative works. While this shift may be painful in the short term, focusing on live services and owned IPs could position EA well for continued success in the future.