Electronic Arts (EA), one of the largest video game publishing companies in the world, has announced a significant workforce reduction and the cancellation of a highly anticipated Star Wars game. The restructuring plan will result in the loss of approximately 5 percent of EA’s workforce, which equates to over 650 jobs. The decision was not made lightly, as CEO Andrew Wilson expressed in a memo to staff, stating that they had considered every option to minimize the impact on their teams.
The restructuring plan also includes optimizing EA’s global real estate footprint and moving away from the development of future licensed intellectual property (IP) that they do not believe will be successful in the changing gaming industry. This shift in focus will allow EA to drive creativity, accelerate innovation, and concentrate on their owned IP, sports games, and massive online communities. By streamlining their operations, EA aims to deliver deeper and more connected experiences for fans worldwide, fostering community, shaping culture, and growing fandom.
However, these changes come at a cost. According to a securities filing, EA expects to incur charges totaling between $125 million and $165 million related to the restructuring plan. These charges include expenses associated with office space reductions, employee severance, employee-related costs, and commitments to licensors.
One of the most significant consequences of this restructuring is the cancellation of a highly anticipated Star Wars first-person shooter game. Laura Miele, president of EA entertainment and technology, explained in a memo that after evaluating Respawn’s portfolio (EA’s Star Wars studio), they realized that players were most excited about Jedi and Respawn’s existing brands. As a result, they made the difficult decision to pivot away from the early development of the Star Wars FPS Action game and focus on new projects based on their owned brands. Miele emphasized that this decision was not a reflection of the team’s talent or passion but rather a strategic move to align with player preferences.
In addition to the cancellation of the Star Wars game, EA will also be sunsetting some licensed mobile games, including Kim Kardashian Hollywood and a Lord of the Rings game. These decisions reflect EA’s commitment to prioritizing their owned IP and investing in projects that resonate with their player base.
The timing of EA’s decision to stop development on the Star Wars game is noteworthy, as it comes shortly after Disney’s announcement of a major investment in Epic Games. Disney plans to create a new universe that incorporates Star Wars and Marvel characters, indicating a potential shift in the gaming landscape. However, EA remains focused on their strategic priorities and believes that by doubling down on their owned IP, they can deliver the entertainment experiences that players desire now and in the future.
While these changes undoubtedly bring uncertainty and challenges for many employees, EA is committed to supporting them throughout the transition. The company aims to provide opportunities for team members to find new roles and paths within the organization. For those unable to transition, EA will offer support and work with each colleague individually.
In conclusion, Electronic Arts’ restructuring plan and the cancellation of the Star Wars game mark a significant shift in the company’s strategy. By reducing their workforce, optimizing their real estate footprint, and focusing on their owned IP, EA aims to drive creativity, accelerate innovation, and deliver deeper experiences for their global fanbase. While these changes may be difficult in the short term, they position EA to lead the future of entertainment and continue providing engaging content to millions of players worldwide.