EA stock has hit a 52-week low point, now trading for $11.28 per share, and CEO John Riccitiello has some theories for why that may be.
In a recent 15-minute interview with CNBC, Riccitiello explained that investors were simply confused by the state of the industry -- the gaming industry, that is -- and understanding its current stage. No new consoles have been announced yet, and in the meantime, investors aren't entirely willing to hop on board the social and mobile gaming train.
"After many years of stellar growth, we more recently got into a place where I think investors are having a hard time understanding where growth in the industry is coming from. We're at a point where the new console generation is not yet been fully announced, so people don't know what's coming there.
"And they're unclear about ongoing growth in the Facebook platform for gaming and mobile. So we're sort of in a transition period from an investor perspective."
So what we end up with is a bit of a waiting game. Riccitiello goes on to say that the whole situation makes no sense to him, that investors are afraid of the gaming industry as it is. To him, the industry is still alive and kicking.
"It makes absolutely no sense to me, but fair and unfair doesn't have anything to do with it when it comes to a stock. There is a perception among investors that the game industry is tough to invest in right now. They're looking for the winners and they're looking for the catalysts. I think those will take place over the next twelve months."
Not that Riccitiello thinks the social gaming scene is a sure win. While the cost of making social and mobile games is generally much lower than the major blockbusters on console and PC, winning over an audience can be incredibly costly. He attributes this to competition, something that the social-mobile market certainly isn't lacking in.
"I would argue that that's one of the worst thoughts I've seen in the gaming industry. Yes, it costs less to produce a game for a social platform or mobile. It costs vastly more to find an audience.
"When you've got 10,000 applications going up on a mobile network, standing out in that crowd is incredibly hard. If you don't have the network power of an EA or Zynga on social, it's virtually impossible for a consumer to find the product. Ditto with mobile. What we have the benefit of is brands like Madden, FIFA, Battlefield, Medal of Honor, and Need for Speed."
When asked whether NPD figures may be to blame for the lull, his response seemed pretty dismissive. Riccitiello doesn't put too much stock in the numbers, and believes investors are too reliant on such reports. He cites PC gaming as evidence, noting that everyone assumed it was dying just a few years ago because NPD reports claimed it was on a decline, when it was in fact "growing through subscription, through microtransactions, [and] through download."