Let me know if you find this statement shocking. Electronic Arts did not think that a single player narrative game from veteran developers based on a huge media franchise was worth making. So, they decided to cancel it and then they decided to close the studio. So, yesterday we’re going to be talking about AAA shenanigans. Now, in case you missed it, the big context here is that EA have had uh quite the time lately, and it all adds up to a fairly simple takeaway, right? One of the largest companies in the world, one that makes billions a year. so many billions that they in fact recently burned two and a half of them in stock buybacks. That that is a company that is not willing to take a risk, even a risk that they had already done everything they could to avoid. Today’s story all began when EA staff received this email from Laura Melee. She’s the president of EA Entertainment and this announced the cancellation of the Black Panther game, the closure of Cliffhanger Games, and even more layoffs at the central and mobile teams at EA. This male of course made it to IGN along with an understanding that these layoffs are fewer than the 300 that happened last month, but they’re not included in that 300. So absolutely it is lots of people going away. Now the justification in Laura’s own words is that this was necessary to, and I quote, sharpen our focus and put our creative energy behind the most significant growth opportunities. Growth will be pretty important later. Now, this brings EA’s total layoffs from the last year and a half to over a thousand people. But guess what? That’s also really missing the full picture because there’s other layoffs. They’re what we call soft layoffs. They don’t get announced in big rounds. And those are things like, say, changing working conditions in the hopes that some people decide to leave the company. That’s of course great for EA. It’s less of a story and it saves them some of those pesky severance costs. But guess what? Even that misses the full picture. Because the full picture, as pointed out by GameFile, is that EA’s full-time staff headcount actually rose. Yeah, it rose by 800 over the last year. Now, yes, some laid-off people would have been rehired, but to make a number like that, EA actually needed to hire a shitload of people. That’s actually what they did. So, when Laura says EA is refocusing, this is actually what she means. I mean, imagine you’re playing a space sim game and uh you want more power in your engines. You don’t need your guns, so you pull your power out of your guns. You put them in the engine. It’s a little bit like that, but the big corporate scale. So, let’s break down what’s actually happening. Black Panther was a thirdp person narrative action game, and it was part of a three-game deal that existed between Marvel and EA. Now, EA and Marvel say there will still be three games. We of course have got Motives Iron Man game in development. Motive are also chipping in and Battlefield 6. So, I guess they’re pretty busy. And turns out they’re going to be even more busy because they will also be making the other Marvel games as well. That sounds like a lot for a studio to juggle. But it’s when we examine Cliffhanger closely, the things actually do begin to make sense in this story. Now, I know that’s a name you haven’t heard of, but you’ve probably heard of Monolith. And it turns out Cliffhanger had loads of Monolith people. So, here’s basically the story. Cliffhanger Games was founded in 2021. It was a Washington-based studio made up of veterans from Monolith Productions. Now, veterans from Monolith Productions. That’s a big statement because those are the people who left after Middleear Shadow of War in the wake of the Warner Brothers mismanagement and all of the hell chaos that happened at that studio. But it was very much out of the frying pan and into the fire. Now, both companies, Cliffhanger and Monolith, are of course dead. They are shut down. But thanks to Jason Trier’s sources, we actually know a few things about what happened between the founding of that company and, of course, its death. So, Cliffhanger essentially seems to have been a long-term play by EA. They essentially set it up to build a framework for narrative games that they could just make sort of ongoing in the future. And it’s what makes that sentence tangible that also makes the story sting. This studio was working on a follow-up to the Nemesis system. Yeah, the nemesis system from those Lord of the Rings games that people absolutely loved. The idea is players would play one of multiple heroes from the Black Panther mythos. So, Tchala, Shuri, Killilmonger, and that other characters would in a dynamic fashion react to what you’re doing via this system that basically was a successor to the Nemesis system. And because this is a studio setup to make a narrative game framework for the future, perhaps this is something they wanted to apply to more games than just this one. But to be fair to them on this Black Panther game, like I am absolutely not into the Marvel stuff at all. But right, the alien antagonist for this was the scrolls. Uh they can impersonate uh all of these different characters. So you can see basically impersonation enemies and a nemesis system working really well. Obviously, I think about Sylons and Battlestar Galactica, which just makes me sad because we’re probably not going to get this now. That really sucks. So all in all, right, it was a deeply ambitious plan to work out what a narrative game could actually be in the future. And that really is important because narrative games have kind of stagnated in some ways. I mean, there’s amazing stuff cooking in the indie scene. But fundamentally, the idea that a narrative game is basically just a playable movie, that kind of has stuck. Why people loved the Nemesis system in the Lord of the Rings games was that it kind of was a dynamic story. Yes, it was early. It was rough, but the idea that the player story is kind of their own, that it’s all dynamic, that it’s all reactive, that different playthroughs would truly be different, even on a narrative level, that seems to be the sort of promise this studio was shooting for. But now, of course, it’s dead. That’s just not the type of innovation and creativity that EA wants to be involved with, at least not as far as it would actually cost them money. Now, sources suggest that EA had actually started this company with the best of intentions. They were actually allowed to start with a small team. They only scaled up recently. And what we learn in Shrier’s reporting and what he suggests is that many of the laid-off people were only hired within the last year. So, within that framework, they could get the bones right of this technical system in place. They could define the game and then start to work on it fully. And Shrier basically paints a picture of this game from two different perspectives. Okay, on the developer side, they had just passed a milestone review with EA on their established tech, all that cool stuff that I just talked about. And with that made, the devs were excited about getting to really build and flesh the game out through the development of a vertical slice. But on the EA executive side, well, they looked at things a little bit differently. To them, they had spent four years funding this American salaried in-off team, and all they had to show for it was tech demos for a project in pre-production. one that would still be years away from making money. Obviously, the second story is the one that won. And that’s why EA would decide to kill a game in a well-known IP from a developer specialized in making just that type of game. And even more, a developer that had made lots of narrative game technology that they, I think, rather clearly had planned to apply to future games. one that could have even seen genuine meaningful innovation in the singleplayer narrative game space, but that’s just not going to happen. That’s the type of long- form investment that it seems, well, they were not able to be down with, especially when they’ve got a big old studio called Motive that apparently can just pick up the slack. So, a few years ago, EA were in a different place. That’s why they green lit this. They had money. They had interest to spare, right? At the time, their corporate story was healthy. The sports games were doing all of the sports, and they could think about some future disruptive tech. But that’s not really the EA of today. They’re a company that doesn’t need two singleplayer narrative game studios internally. And what’s particularly telling is Laura’s description of EA Entertainment’s new focus, which is this, and I quote, “Battlefield, The Sims, Skate, and Apex Legends.” That is what EA Entertainment is. Those are the four franchises now. And what they are are games that they don’t have to pay licenses to make and that they don’t have to meet external expectations for. EA CEO Andrew Wilson did two things in February 2024. He laid off just under 700 staff and he published a state of the business address. It’s this address exhilarated by their recent struggles that tell us basically why they’re doing all of this. In the address, he said that they would be quote sunsetting games and moving away from the development of future licensed IP that we do not believe will be successful in our changing industry. So, it’s obviously not hard to apply that decision-making to the game that we’ve seen here, but it’s not even the first time that’s happened in 2025. Okay, this is where a lot of people are actually pissed. You just don’t hear from them much. EA purchased Code Masters in 2021, and when they did that, they also got the World Rally Championship license. Now, that was a 5-year contract with Code Masters with plans for annual games from 2023 through to 2027, but those were murdered quickly. One game released in 2023, and support for that game, in fact, ended last month in 2025. The contract was not renewed, so it reverted to the prior holder, Nikon. That’s it. One game was enough. They didn’t want to bother with the World Rally Championship franchise, one that has got a long storied history in gaming. No, EA was not willing to build that up to be something. Code Masters could just go back to the other licensed properties like F125 or chipping in in other games. And as for Formula 1, well, at least that’ll continue unless it of course stops making enough of an easy return. And this is not something that should be surprising to you. We know that EA can be mercenary in their decision-making. We saw that at the largest scale whenever EA chose to break their contract with FIFA. When they did that, they ended one of the most well-known and profitable series in video games history. Those games were making all the money, but they exited the contract because the contract costs were too high and they’d rather just not have FIFA be involved and make EA Sports FC. One of the big reasons, of course, being margin. And in both the cases of FIFA and WRC, those are examples under the EA Sports label. If even the most successful division is going to be doing that, of course, you can bet that at EA Entertainment, the less successful division that makes games that we all like, uh, well, yeah, no, they’re obviously not going to be protected. The key thing to understand then is that this is all mercenary and it’s all about trade-offs, right? Licenses are an early investment to make money from a larger audience. games like Space Marine 2, Marvel Rivals, and even Crossover Cosmetics show that there is audience hunger for those sorts of games. And the principle, right, is that the upfront payment or the recoupment costs basically cover the risk of the lency. And of course, we now know from the Insomniac hack that Marvel will get their money. But of course, the much larger audience that you get because of that means that the developer should have a better chance of profit. But where this all gets a bit grim is how these things clash together. I mean, take one common wisdom, right? That original properties are far riskier to do at the scale of a big AAA game. That’s one of the reasons why you would have established IP or, you know, a license be used for AAA games. But of course, now we’ve got EA saying, uh, you know what, we don’t really want to do these license things as much anymore. And even if you go down to double A, I mean, EA are not putting out loads of double A games. The only ones that really do seem to happen are, well, guess what? the Osafaris ones that essentially have got guaranteed amazing sales because well, you know, they’re kind of like their own little franchise, their own little thing now and they’re genuinely good, interesting, creative. But even in that, there’s a bit of a problem. How are you going to get the next, say, Joseph Varys involved if you’re not willing to greenlight that sort of thing in the first place? And that’s where, in my opinion anyway, a temporally blind view of what risk is is really dangerous because yes, there is short-term risk in a lot of those investments, but there is also a long-term risk in not taking risks, in not trying to innovate, not trying to disrupt, not placing new, truly new bets. Because guess what? You don’t know what’s around the corner. Someone else could get there before you. And guess what? Congratulations. You end up being the incumbent that gets disrupted. And on that one thing is about to become abundantly clear. The only future that EA are thinking of is well, the next financial year at most. Here’s how all this [ __ ] works. What we’re looking at with Cliffhanger is EA considering its overall structure and its overall plan. They are not looking at this game or the veteran staff or even the quality of what’s being produced. It does appear as if it’s a simple question of investment versus expectation of return. Motive can keep making the Iron Man game because they’ve got established systems and tools. They’re an established studio and a studio that’s materially contributing to Battlefield. Cliffhanger, what are they? They are making exactly one game and they’re not integrated into the rest of what EA’s doing. That is of course because Cliffhanger were an investment in the future. something to allow concurrent Marvel games to be released alongside motive all while building up a portfolio of single player games and proprietary technology like whatever their successor to the Nemesis system would be. So in time cliffhanger may also have been able to contribute to the other teams, the other projects and the technology that EA has. But that is all in the future. Right now, all the cliffhanger is I suppose was was a lot of money on a balance sheet making a specific product. That product being Marvel game. But EA has already got a team making Marvel game. You know, uh, think about correlated risks here. You can look at that plainly, see it as two highly correlated risks and decide to get rid of one of them. And that does feel like the logic here as to why Motive gets to keep making their game, but Cliffhanger does not. Cliffhanger requires long-term investment in the future for EA’s overall single player portfolio. But EA Entertainment, the division that they were within, as Laura said, is only concerned with four franchises, all of which are also multiplayer live service video games. Basically, it’s the EA sports model replicated inside entertainment. Instead of some form of sports with a ball, it is manhoot in its various different forms or mans. They can of course still have smaller investments in risk mitigated games like Iron Man, Jedi or Mass Effect, but no big risks outside of that and no building on ground that someone else owns. And that is what makes me finally understand something that never made sense to me. That EA kind of fixed Star Wars Battlefront 2 to the point where people genuinely love that game and actually still play it to this day. We’ve got people who worked on it saying, “We’d love to do three. We’d love to get the gang back together. And for EA, that would mean another live service. But of course, just listen to what Andrew said. They don’t want to be building on top of someone’s license. Through all this, there’s one thing I can sniff, and that is the scent of fear. EA are operating in an environment of fear, of consolidation, and calcification around their pillars. Anything not supporting those pillars is wasteful. People talk about an abundance mindset and a scarcity mindset. This is a scarcity mindset. Even though you literally had $2 and a half billion dollars to burn on stock buybacks, true creative investment is just not a thing at EA. They will only invest in things that can be pre-rationalized. That means they’re never going to have great ideas. They’re never going to have transformative ideas because they’ll just come to the same plan that any number cruncher with half a brain could because everything they do is pre-rationalization. better for them to stay safe with what works, with Battlefield, with The Sims, with Apex Legends, and uh I guess with Skate as well, which has been thrown in, but more importantly with EA Sports FC, with EA College Football, doubling down, tripling down on what works, especially when you fully own it. That is their investor narrative. But there’s a massive risk, and it’s one that they only just dodged. Those pillars of the business are not made of diamonds. They get battered. They get worn down. We’ve seen that with Apex Legends. We’ve seen that with the uh little wobbly that EA Sports FC recently had. And so what that means for EA is it’s not just supporting those pillars. It’s also trying to build the next pillar, right, for whenever one of your current ones goes away, but that means they’re inherently creatively limited because the only type of game they’re really interested in making is one that could be a major yearly pillar of the business. And while I think that is deeply sad in many ways, there is another side to it, it does at least mean there is one sort of thing EA is willing to invest a truly gargantuan amount of money into. And that’s something we can see in two upcoming projects. EA has in fact spent 3 to four years building Skate and Battlefield up right to a degree of health so that the next games won’t be [ __ ] And the reason why is obvious. EA’s own stability rests on those two new games being mega hits, not being a Battlefield 2042. They basically need to be New Pillars of the Business right out of the gate. Do you know what wouldn’t be? Black Panther. And that’s why Cliffhanger ultimately ended up getting the axe. Even though the work that they did could have been reinvested in, could have been built upon, that EA could have worked out, a new way of doing a singleplayer narrative game, like perhaps Monolith did with the Lord of the Rings games back before those got ruined. But no, that’s not going to happen because while that could make a lot of money, as say comparisons of Jedi money to uh EA Sports FC money sort of tells us, that type of game just isn’t as important.