Bullfrog, Origin Systems, and Westwood Studios rank as some of the best development houses of all time. They also happen to represent three of EA's most spectacular failures. "We at EA blew it," said EA CEO John Riccitiello at the DICE Summit in Las Vegas this morning, "To a degree, I was involved in those things, so I blew it."

While Riccitiello was proud of his achievements at EA following his return to the company, he warned developers and publishers not to make some of the mistakes the company has made in the past. Those mistakes, he said, involved the stifling of creative talent and their ensuing departure.

Riccitiello took DICE attendees to school this morning with his talk on Game industry Economics 101. EA, like Activision, Sony, Microsoft, will continue to absorb developers, as it did with Bioware Pandemic last year. And that presents a danger.

"Organizations are not coming together in a good way," he said, resulting in less interesting products born of "creative failure."

In the cases of Bullfrog, OSI and Westwood, Ricitiello said that the belief that EA and its studios could be one big happy family, with a one-culture-fits-all mentality doesn't work. Those teams suffered, and eventually lost talent, because creative decisions were escalated to the top levels of the company and creative contributors were "buried in layers of bureaucracy and policy."

What does work, Riccitiello said, are what he called "city-state" teams, with strong leaders like the ones Bioware, Maxis, DICE and Distinctive. Outside of EA, he pointed to Rockstar Games, Valve and Blizzard as strong examples of the kind of creatively independent models to follow.

He had strong words for publishers who were looking to consolidate, saying "The command and conquer model doesn't work. If you think you want to buy a developer and take their name off the credits, taking away their autonomy, you're making a profound mistake."

The solution was to "Find the people you trust and give them the keys."

Send an email to Michael McWhertor, the author of this post, at mike@kotaku.com.