John Riccitiello saw the crisis coming. In August 2007, soon after becoming CEO of video game maker Electronic Arts, he gathered 160 lieutenants in New York and warned them that the $20 billion industry was headed for trouble. The major players were clinging to the model of selling shrink-wrapped games for $60 a pop, while users were turning to far cheaper online games. Only by "jumping into the abyss," he said, and radically changing itself could EA analysts' expectations. EA now expects to lose $197 million to $295 million for fiscal 2011 on sales of $3.45 billion to $3.7 billion, under standard accounting practices.
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