REDWOOD CITY -- Electronic Arts (ERTS)' efforts to repair both its image and its troubled "SimCity" video game represent a critical step for an industry struggling to steer fans of its most popular franchises to online gaming.

After a lavish marketing push, EA launched its first upgrade to "SimCity" in nearly a decade by revamping the game for the online world. But after "SimCity" was released March 5, players complained they couldn't get online, got kicked off once they managed to activate their games, or later discovered that they had lost hours of game play -- problems that are certain to haunt the next release of a big-name franchise that requires players to go online, said Billy Pidgeon, a gaming analyst with M2 Research.

"It's a big deal because 'SimCity' is a big game with a big title and some people might be turned off," Pidgeon said. "EA is one of the companies looking to do more with digital publishing and online delivery, so they need to get this stuff right. They're not the only ones because everyone needs to get this right and others are watching and learning from this."

EA and the traditional gaming industry are racing to keep up with the move to online games and to mobile devices as players opt for free or cheap games from app stores instead of costly packaged games.


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While the $5 billion mobile gaming business still represents less than 10 percent of the overall video game industry, it is expected to grow 15 to 20 percent over the next five years. said David Cole, a video game analyst and owner of San Diego-based DFC Intelligence. At the same time, EA wants to protect the reputation of the PC side of its business, which still represents 30 percent of sales and is expected to continue steadily growing.

"The PC market is actually pretty strong and 'SimCity's' been a real good franchise for EA," Cole said. "You don't want to screw that up."

And the "SimCity" misstep comes at a critical time for EA. In its latest earnings report in October, EA said it had exceeded analysts' expectations and forecast annual earnings-per-share growth of at least 25 percent.

And shares of EA stock closed Friday at $18.69, near their 52-week high and far above the 52-week low of $11.91 they reached on Oct. 26.

While EA has had problems with previous online attempts, notably "Star Wars: The Old Republic" and "Spore," Pidgeon said, nothing near the scope of its initial troubles with the newest version of its revered "SimCity," which allows players to create and manage virtual communities.

Lucy Bradshaw, general manager of EA's development subsidiary Maxis, said through a representative that her schedule last week would not allow for a face-to-face interview with this newspaper. The representative did not respond to emailed questions about "SimCity's" problems and the company's efforts to fix them.

In the face of furious blowback from once-loyal "SimCity" fans, Bradshaw wrote a series of conciliatory blog updates and said the problems were the result of an unanticipated surge in players who overwhelmed the game's initial server capacity. To make up for the "SimCity" troubles, Bradshaw offered "SimCity" customers a free version of any title in EA's catalog.

"I know that's a little contrived -- kind of like buying a present for a friend after you did something crummy," Bradshaw wrote about the offer. "But we feel bad about what happened. We're hoping you won't stay mad and that we'll be friends again when 'SimCity' is running at 100 percent."

All of the attention on "SimCity's" problems overlooks the evolutionary leap forward the game represents in terms of graphics and connectivity to other online players, said Michael Pachter, a research analyst with Wedbush Securities in Los Angeles who paid $50 for his version of "SimCity."

"I personally believe that EA is a consumer-friendly company and this is a genuine technical screw-up that they're trying hard to fix," Pachter said. "But I'm not willing to go through all the pain and hassles again. I won't play anymore until they can guarantee a 100 percent fix."

Contact Dan Nakaso at 408-271-3648. Follow him at Twitter.com/dannakaso.