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EA CEO steps down, stock tanks

March 19, 2013: 12:51 PM ET

Shares of Electronic Arts tumbled Tuesday after the video game publisher said CEO John Riccitiello will step down later this month, raising concerns about the company's digital strategy.

EA (EA) stock was down 8% in late morning trading.

The company said late Monday that former CEO Larry Probst will serve as interim chief after Riccitiello leaves on March 30.

EA also warned that earnings and sales for the current quarter could come in at the low end of the guidance it offered in January. The company is scheduled to release its next quarterly report in May.

Riccitiello's decision to step down comes weeks after EA launched an updated version of its 23-year old city-building game, SimCity. More than 1 million games were sold at launch, and more than half of those sales were for the digital version.

Related: Electronic Arts CEO John Riccitiello to step down

But SimCity's debut was marred by technical difficulties, including problems downloading the game because demand overwhelmed EA's servers. After enduring the wrath of angry gamers, EA said it would give certain users a free game to make up for the glitch.

The episode highlighted concerns about EA's ability to adapt to changing trends in the industry as consumers increasingly favor games that can be downloaded on portable devices made by companies such as Apple (AAPL) and Google (GOOG).

Related: How Chillingo picks winners in mobile games

ldrogen
Wow, $EA CEO resigns over SimCity launch disaster, it really does show how clueless they are over web there

markmandelPDX
$GAME People are spending an average of 2 hours a day on apps. 43% of it is spent on games. http://stks.co/eNlg $DIS $EA $GOOG

EA has launched a platform called Origin that allows users to download games online and play them on PCs or mobile devices. But the company has not had a major hit in a while and some investors say it needs more than a new system to get ahead of the competition. EA is up against Call of Duty creator Activision Blizzard (ATVI) and Grand Theft Auto maker Take-Two Interactive (TTWO) at the top of the traditional video game heap.

snee
$EA this should be a $15 stock. broken company, management bailing across the board and disappointing games. new console won't change that

In case you're still not convinced, here's a comment from someone claiming to represent the "video game nerds" of the world.

Ronald_Bringer
Not sure if any of you investors here in $EA are also video game nerds, but we in the gaming world HATE this company. Just a heads up

Despite all the negative sentiment, some traders said Riccitiello's departure could create an opportunity for EA to correct past mistakes.

ronin245
$EA CEO departure a positive development,says Brean Capital, thats what i figured on the bounce still overextend but wont sell off much

skwca
$EA JR left Pandemic,bought it then killed it.personal profit. Then he went to work on EA killed it and leaving it. imo yes JR needed to go.

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Ben Rooney
Ben Rooney
Staff writer, CNNMoney

Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news. Follow Ben on Twitter: @ben_rooney

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#StupidStock Move of the Day! $APT up 10%? Stock downgraded today. $LAKE move silly but at least $LAKE said something about hazmat demand.
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