EA swallows a $300 mill pill and backs away from Facebook

In July 2012, when shares in Electronic Arts were trading beneath $11 for the first time since the 1990s, then CEO John Riccitiello tried to explain why it was that the company’s investors were so shaken. He believed that it came down to a misunderstanding of the modern video game industry. “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,” Riccitiello told CNBC at the time. “And they’re unclear about ongoing growth in the Facebook platform for gaming and mobile.” Today it appears that Riccitiello and EA’s other executives were equally unclear about the potential of Facebook gaming. Just over three years after acquiring Playfish, one of Facebook gaming’s biggest competitors, EA is shutting the studio down.

On the official Playfish forums (via GamesIndustry International), EA’s community team announced the impending closure schedule of six Facebook games in total. On May 14, the studio will shut down Madden NFL Superstars ’11 and’12, as well as NHL Superstars. Then on Jun. 14, it will go on to shut down SimCity Social, Pet Society, and The Sims Social. This comes not even a full year after Electronic Arts sued developer Zynga for releasing The Ville, which it claimed copied and therefore hurt the profitability of SimCity Social.

“We know that you may be disappointed by this,” said EA, “Retiring games is never easy, we hope you enjoyed playing SimCity Social as much as we enjoyed making it. Thank you to all of our passionate and dedicated players for supporting SimCity Social. We hope to see you in some of our other titles on Facebook and other platforms. 

For those that purchased and are still holding on to Playfish virtual currency, EA says to spend what you have before the games are shut down in the coming weeks, without offering any kind of compensation.

EA isn’t abandoning Facebook by any means though. The Simpsons: Tapped Out, developed by EA Mobile, remains a major earner, and across Facebook, Android, and iOS, that game generated $23 million for EA during the holiday quarter.

It would seem, however, that Playfish is done for, even after EA spent scads to acquire the company. In November 2009, right as the social game boom was kicking into high gear and companies like Zynga saw their valuation skyrocket, EA spent a whopping $300 million to acquire Playfish­, and it promised the studio another $100 million if it could hit certain milestones.