Right now, accountants are busting into board rooms demanding that companies find ways to save money. They need to reduce head count, close facilities and reduce creative risk.

"That is a recipe that we would follow to our peril," John Riccitiello, chief executive of Electronic Arts told attendees at the 2009 Dice Summit in Las Vegas on Thursday. Everyone is talking about how much they are going to save by cutting, but no one is talking about what they're going to invest in. "They are making the mistake of getting smaller instead of stronger and leaner," he says.

"I actually think the economic crisis is a blessing for the game industry," says Riccitiello. "A lot of the riff raff is going to go broke. We're not going to have to compete with junk. We did get fat in too many places and were too reliant on the way things they are."

Riccitiello jokes that he's not pro-recession, but that no one should ever waste a crisis. Now is the time to act quickly and decisively to build for a stronger future.

His Three Rules:

• Decide what is important
• Invest heavily in those programs
• Cut the rest.

This is the game plan Electronic Arts followed over the holidays when it realized it needed to reduce its head count. It cut 1,100 jobs, or 11 percent, of its overall work force. It was an incredibly challenging thing to do, says Riccitiello, but necessary.

Last year the company grew 18 percent. It had planned to grow double that. The problems: New IP didn't sell as well as it had hoped and retailers acted differently than we anticipated. "When we looked inside our own company, we feel we're responsible for the lion share of the mess. Our company was a little too big for the economic environment. It was fat," he says. EA had to make some pretty hard calls to bring costs down and revamp how we bring titles to market.

The executives sat down over the break to rate every initiative under Electronic Arts' umbrella. They had to decide what the most important things to keep were--key sequels like Madden and Dead space, the most promising new intellectual properties, and its direct-to-consumer business--and cut the rest.

These decisions were based on what titles struck a cord with consumers. Identify what worked and keep it. Learn from what didn't work and change it. You can't skimp on investing in quality.

Along with encouraging strategic investment, Riccitiello highlight that sequels can be just as innovative as new intellectual property. Just as much time is spent updating FIFA and Madden as will be spent on the sequel to Dead Space. He points to the slate of upcoming titles that are some of the most anticipated of 2009 like Resident Evil 5 and Grand Theft Auto IV The Lost and the Damned. Sequels can be the underpinnings of an innovative plan for the industry. "It's about quality and innovation and swinging for the fences," he says.