It argued that instead of creating hits that are sold on store shelves for videogame consoles, the Redwood City, Calif.-based company wants to take popular franchises, like Madden or Need for Speed, and digitally distribute them across a number of platforms, such as mobile, social and PC, to create recurring revenue streams.

Riccitiello was unwavering in his commitment:

“The consumer has changed. 200 million console players have become 1.5 billion consumers gaming on multiple devices,” he said. “Today, we are a very different company….From here, it is about building a better, more predictable, and more profitable business, a business that is less dependent on individual hits and more deeply anchored in the ongoing monetization of game franchises.”

But the big question is whether EA can turn the ship when there are 8,000 employees on it who are used to doing business the old way.

Habits are hard to break, especially when it requires replacing a controller with a mouse or a touchscreen. In the meantime, some of its more nimble competitors are getting most of the credit as the industry shifts to digital.

For example, earlier this year, we watched as the private market valuation of Zynga–EA’s much smaller and younger competitor–exceeded EA’s public market valuation. Zynga was reportedly worth between $7 and $9 billion, while EA was valued at roughly $6 billion.

Today, EA’s market cap stands at about $7.25 billion.

Zynga, which makes such Facebook games as FarmVille and CityVille and has dabbled in mobile games, reportedly had revenues of $850 million in 2010. In comparison, EA’s digital revenues totaled $833 million for its fiscal year 2011. (Meanwhile, its overall revenues totaled much more, or $3.6 billion.)

Still, smaller competitors, such as Zynga, which strictly make money from digital revenues, are viewed as not having a lot of baggage and can go hard after something new without sacrificing the old.

Just last week, there was a sign that EA wasn’t winning that battle–even internally.

Electronic Arts disclosed that its COO John Schappert resigned. Rumors indicated that he was joining Zynga, although Zynga has not confirmed the appointment.

Despite that potential set-back, and EA’s public perception, it has been trying.

It has been on an acquisition spree for the past couple of years, picking up everything from Playfish, a social-games developer, to Chillingo, a mobile-games publisher. Earlier this week, it bought a small mobile-games studio called Firemint. (Of course, those investments also become a curse because they have to start paying off.)

Beyond acquisitions, it has also re-prioritized the work it was doing.

On the call, Riccitiello said that involved paring back the number of titles it was making from roughly 70 to around 20. While that was something of a defensive move, he said they are now shifting to offense, by picking the game franchises they do decide to build and porting them across several platforms to increase their profitability. “Over the coming years, we will transform EA from a packaged goods company to a fully integrated digital entertainment company.”

He calls it the “games-as-a-service” model, which is comparable to the software industry switching from a licensed packaged goods model to SAAS, or software as a service, several years ago.

Under this philosophy, he said, they will rely on intellectual property and strong brands, such as EA sports and Hasbro, and build out a platform of registered users that can be marketed to (in Q4, it had 112 million users, roughly twice as many from a year ago). It’s also making managers experts across mobile, social and console, rather than making silos for each category.

“It’s a big change,” Riccitiello said. “As an investor, you can see this as a way to better manage our IP, and drive up the ARPU for our core properties.”

At least one analyst was reluctant to believe the transformation could take place. How does Riccitiello plan to get everyone on board?

“If only you could spend a couple of weeks with us,” Riccitiello joked.

His more serious answer was that they’ve spent the past three years conducting a managerial change: “We’ve identified intellectual property owners inside of our company, and we’re sort of organizing around that.” Those individuals are charged with plans that involve console, PC, mobile, social and a variety of business models, including microtransactions and subscriptions.

The change will be relatively slow. This year the company is projecting digital revenues to total $1 billion, increasing roughly 20 percent over 2011.

And despite all of its efforts, the company will face other challenges, including some that are out of its control. For instance, the company’s EA Sports business is facing two potential league lockouts and this year there won’t be a FIFA World Cup title. Those three things represent roughly a $250 million revenue gap.

It’s also launching its biggest launch campaign for a game in EA’s history for Battlefield 3, and it’s unclear when the highly anticipated launch of Star Wars, an online multi-player game, will occur. Depending on when it is ready, EA’s earnings per share could fluctuate by 15 cents.

Overall, at least some people were sold on the picture Riccitiello painted.

The company’s stock increased a modest $1.76 a share yesterday, or roughly 8.8 percent, to close at $21.68. And Piper Jaffray analysts raised their price target on EA’s shares from $19.50 to $25.00.

“Copyrights are not supposed to protect board games,” intellectual property attorney Pete Kinsella told CNet News.com. “What copyrights protect is the expression of an idea rather than the idea itself. The law allows people to design around things, and particularly when there isn’t patent protection, the law has great incentive to design around things by making things somewhat different.”

Which is an unfortunate state of affairs for Hasbro (HAS): The newly launched Wordscraper has, in a very short time, already signed up 3,569 users. And it will surely gather more as word of its debut spreads. What will the game company do now? What will it do if Wordscraper’s creators release it as a true board game?

“Scrabble: Every Word’s a WINNER!”

Except for Scrabulous, apparently. The online knockoff of Hasbro’s 75-year-old word game has been removed from Facebook at the game-maker’s request. “In response to a legal request from Hasbro, the copyright and trademark holder for Scrabble in the U.S. & Canada, the developers of Scrabulous have suspended their application in the U.S. and Canada until further notice,” Facebook explained in a statement.

Not exactly a surprise, given recent events. Last week, Hasbro filed suit against Scrabulous creators Jayant and Rajat Agarwalla, claiming trademark and copyright infringement. “Hasbro has an obligation to act appropriately against infringement of our intellectual properties,” said Barry Nagler, Hasbro’s general counsel, at the time. “We view the Scrabulous application as clear and blatant infringement of our Scrabble intellectual property, and we are pursuing this legal action in accordance with the interests of our shareholders, and the integrity of the Scrabble brand.”

An understandable view. Scrabulous is, let’s face it, trading on Scrabble’s name and conceit. And, until it was pulled, it had over two million users and was generating over $25,000 per month in revenue–for someone other than Hasbro. That said, when was the last time you played Scrabble offline?

If you answered, “I can’t recall,” or “at Aunt Marge’s house when I was eleven,” you’re probably like a lot of other folks out there who only rediscovered the game because of Scrabulous. And when you think about it that way, Scrabulous could have been the perfect licensing opportunity for Hasbro (HAS), had the company decided to view it as that, instead of an affront to its intellectual property. Two-million- users-and-growing is a hell of a lot better than the 8,900 users the official Scrabble Facebook app has garnered since its launch earlier this month.

So far.

Although the popular Facebook widget was supposed to be taken down two weeks ago and then last week–pretty much because it obviously infringed on the rights of the owners of the popular word game Scrabble–it is still up and working on the service and allowing new downloads (I did it last night, for example).

And sources with knowledge of the situation say that it is not likely to go–for now at least–as the parties involved attempt to come to some sort of agreement about its ownership and future. In fact, those sources expect a settlement soon between the many sides involved.

There are many sides, including its developers, Rajat and Jayant Agarwalla (pictured here) of Calcutta, India; Hasbro and Mattel, the toy and game giants who co-own the rights to Scrabble; and even Electronic Arts, which has the online rights to Scrabble.

Oh, yes, and Facebook, which hosts the offending application, and which has been curiously silent despite its important role here.

Hasbro and Mattel had asked the hot social-networking site to pull it, and had also sent a cease-and-desist order to the Scrabulous creators.

Cue the quiet, behind-the-scenes negotiating.

Of course, there has been a lot of noisier wrangling with “Save Scrabulous” groups going up on Facebook created by its loyal users–there are more than 600,000 active daily ones on Facebook.

And, of course, they love Scrabulous (a game is pictured above). Why not? It’s fun, interactive and there is a real community that has been formed around it that is passionate.

That’s exactly what social networking should be about.

But, while I might sound like a skunk at a garden party, it’s also pretty amazing that Scrabulous’s creators had the audacity to just steal the famous concept and trademark and run with it. Worse still, its proponents think that’s just great.

It’s not, because it is out-and-out stealing of a well-known brand and that shoplifting should not be the way businesses are formed in the Web 2.0 economy.

Moreover, Facebook should be among the first to crack down on this kind of juvenile behavior (curiously, Scrabulous is an actually useful app, unlike others I have derided on Facebook as more suited for toddlers) all over the service, whether it relates to music, videos or anything else its third-party developers take without asking.

Can you imagine the hue and cry if The Wall Street Journal suddenly debuted a widget called “Monopolicious!”–a rip-off of Monopoly, complete with Park Place–on Facebook?

We’ll see if Facebook will truly do the kind of house-cleaning it needs. I hope so, because it would show a real step in the growth of its corporate culture and would go a long way in creating the kind of mature platform it has the potential to be.