Electronic Arts Inc. (EA:US) named Andrew Wilson, the head of its sports games and a leader in the emerging digital businesses, as chief executive officer, passing over two more senior officials.
Wilson, 39, succeeds John Riccitiello, who left in March amid disappointing results. His appointment was announced yesterday on the company’s website by interim CEO Larry Probst, who will remain executive chairman.
Electronic Arts is turning to a manager who successfully made the transition to online games with some of the company’s most important franchises, like “FIFA” soccer, a strategy that Wilson said won’t change. He vaults past two superiors, Peter Moore and Frank Gibeau, who are more closely identified with the stumbles under Riccitiello.
“You might see some of what remains of EA’s management go as part of a shakeup, but that might not be the worst thing in the world,” said Michael Olson, a Piper Jaffray Cos. analyst in Minneapolis who recommends the stock.
Before his most recent position overseeing EA Sports and the company’s online gaming portal Origin, Wilson worked in the Asia online publishing group and development studio in Seoul. He’s been with the company since May 2000.
“Andrew’s appointment is a clear demonstration of the deep bench of management talent at EA,” Probst wrote in a letter to employees of Redwood City, California-based Electronic Arts, the second-largest U.S. game publisher.
Electronic Arts was little changed in extended trading yesterday after the announcement. The stock (EA:US) rose 2.4 percent to $27.60 at the close in New York and has almost doubled this year.
Wilson’s appointment comes as the industry prepares for the introduction of a new generation of consoles, with Sony Corp. and Microsoft Corp. planning to release new players this year. U.S. sales of video games and related products rose 1 percent last month to $521 million, the first gain in almost two years, according to researcher NPD Group Inc.
The months-long search for the new CEO was complicated after another potential candidate, Don Mattrick, left Microsoft Corp. to take the top job at Zynga Inc. (ZNGA:US), said Michael Pachter, an analyst at Wedbush Securities in Los Angeles who also recommends the shares.
“Andrew’s a capable guy, but I don’t know why a subordinate leapfrogged the others,” Pachter said. “In order for him to succeed, we’re going to have to see that he’s tough, that he holds people accountable.”
The company said it considered “several talented executives from outside the company and from within EA.” John Reseburg, a spokesman, declined further comment.
Wilson, who will receive a base salary of $800,000, also gains a seat on the company’s board, effective yesterday, Electronic Arts said in a filing (EA:US).
The new CEO signaled there would be little immediate change within the company.
“EA’s strategy is sound,” Wilson wrote to employees. “Our focus on our talent, our brands and our platform, together with our investment in next-generation consoles, mobile and PC free-to-play, as part of our ongoing transition to digital, is right.”
As head of the business that generated much of Electronic Arts’ $3.8 billion in fiscal 2013 revenue, Wilson has overseen some of the biggest hits and some disappointments. He was named executive vice president of EA Sports in August 2011, according to the filing (ATVI:US).
The most recent “FIFA 13” soccer game rose to 17 percent of total sales in the latest year, from 13 percent in the previous 12 months, according to the 2013 10K report. The latest “Madden NFL” football title sold fewer units initially than its predecessor, according to Olson. The company canceled “NBA Live 13” and elected not to renew an agreement for college basketball games.
“The various sports franchises have done well in recent years, especially with the incorporation of digital and subscription components,” Olson said. “That’s the direction the company wants to take with multiple franchises, and he’s got experience doing it.”
Electronic Arts is in the middle of a transition from a maker of console games sold mostly at retail stores to one that plans to generate the bulk of its revenue from digital downloads within the next five years. Online sales in its fiscal first quarter rose 17 percent to $378 million.
In May, Electronic Arts announced a multiyear agreement with Walt Disney Co. to create games for game consoles, computers and mobile devices based on “Star Wars” characters.
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