Month: June 2015

Video game console maker Ouya is in negotiations to sell itself, possibly to Razer

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By Ian Sherr

Ouya, the startup video game console that became a darling of the independent development world, is in negotiations to sell itself.

The company is in talks with Razer, the computer and accessories maker popular with gamers. The deal is not yet finalized, a person familiar with the matter has said, but the companies are discussing ways to bring Ouya’s staff onboard.

The possible sale marks a dramatic turn for Ouya, a once-high flying startup, whose video game console and app store were popular with small developers. While the company and its service will likely continue to run under Razer’s ownership, Ouya’s efforts to sell itself underscores the challenges of competing in the video game industry, which is fueled primarily by blockbuster games bought by often finicky customers.

In many ways Ouya came to the market too early. In the three years since its debut, Internet-connected TV boxes have become a popular hobby of Silicon Valley, which has introduced devices like Google’s Android TV software and Chromecast streaming media stick, Amazon’s Fire TV and Roku, which has sold 10 million units since going on sale in 2008. Apple’s set-top box, called Apple TV, has sold 25 million units since it went on sale in 2007.

While these devices have begun to take pride of place in people’s living rooms, they haven’t matched the success of Microsoft’s Xbox, Sony’s PlayStation or Nintendo’s Wii. Part of the reason, analysts say, is a lack of entertainment apps, particularly games.

That’s where Ouya came in.

How Electronic Arts stopped being the worst company in America

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By Ian Sherr

The day before Consumerist.com announced the worst company in America, Larry Probst was already pissed.

That cloudy April day in 2013, Probst, interim CEO of Electronic Arts, called an emergency meeting of his senior leaders at the company’s Redwood City, Calif., headquarters.

Probst knew that EA, which had grown into one of the world’s largest video gaming companies since it was founded in 1982, was struggling: Its financial performance wasn’t meeting expectations, its stock had fallen two-thirds over the last six years and a loud group of critics were probably about to crown the company the worst in America — for the second year in a row.

In fact, more than 250,000 people cast their votes on the advocacy website Consumerist and crowned EA the worst company in America the year before, beating out Bank of America.

“Consumerist readers ultimately decided that the type of greed exhibited by EA, which is supposed to be making the world a more fun place, is worse than Bank of America’s avarice, which some would argue is the entire point of operating a bank,” wrote Consumerist’s Chris Morran while announcing EA’s first win in 2012.

Nearly 78 percent of votes went to EA again the next year, declaring it worse than the tardiest airlines or the reviled cable companies that take forever to service your home.

“It was a hideous thing,” Probst said of finding the company so hated. In that conference room on that cloudy Monday, with the executive team surrounding him, Probst “hit the roof,” as one person described it.

“The message I tried to deliver was, ‘This will not happen again,'” Probst recalled in an interview a year and a half after the gathering. “‘As long as I draw breath, this will not happen again.'”

Why were EA’s critics so ticked off? They had a long list detailing how the company lost its way. Some of the games it released weren’t considered as innovative or well made as the originals, particularly titles like Medal of Honor: Warfighter. The 16th major installment in the series was criticized for not innovating on the typical shooting game. Other players loathed EA’s shift toward selling additional storylines to games for an extra fee. And its efforts to compete with a new class of games by Zynga and others, offered cheap or free on smartphones, tablets and Facebook, weren’t well received.

EA seemed more like a business than a game developer, said fans turned critics. “EA doesn’t even have the decency to recognize when they’ve published another uninspired piece of crap,” one blogger at the gaming enthusiast site Destructoid wrote at the time.

Winning the worst company award served as a wake-up call for EA, helping to convince executives they needed to change the way they thought of their customers. That rethinking has paid off: Over the past year, EA’s sales, which declined in the year leading up to Probst’s April meeting, have swung back to growth. Profit has skyrocketed to $875 million from $8 million in 2014, and the company’s stock price has soared.

All with little change in research and development investment and no dramatic layoffs.

Every company at some point faces a crisis of confidence. At EA, this challenge manifested itself in a peculiar way: customers were buying its games, but an increasing number of them also disliked the company. A lot.

So, EA set about changing its culture, from the way employees worked with one another to the way they talked to customers.

“We needed to look at systemic problems,” said Patrick Söderlund, who heads up some of EA’s biggest games. “We needed to understand this is how people perceive us — right or wrong, it was as simple as that.”