Electronic Arts
By: Cody Butland, Michael Edward, Shane Harrington, &
Jessica Prim
A Little History of EA
• Electronic Arts was founded on May 28th, 1982 by Trip
Hawkins in Redwood, CA.
• EA was a pioneer of early home computer games and
was known for promoting the designers and engenieers
that created the games.
• In 2011, they were the 3rd most profitable video game
company behind Nintendo and Activision Blizzard.
• They own and operate other major video game
companies such as EA Tiburon, EA Canada, BioWare, &
DICE.
• They produce many popular games such as Madden,
FIFA, Battlefield, & The Sims.
Ad Revenue In, Ad Revenue Out
• Although EA has always depended fans to spread the word
about their games, they wise enough to avoid marketing
myopia
• EA spend 2-3X as much on marketing and advertising a title as
it does developing it
• EA truly knows its audience and promotes heavily to Game
Informer readers as well as ESPN’s The Magazine.
• EA stands above its competitors through not only amazing
graphics, but also through the talent and energy represented
by the fans’ favorite players
• However this luxury does not cheap. EA spends about $100
million annually (3X its ad budget to license big name athletes,
players’ associations and teams.
Cont.
• However this luxury does not cheap. EA spends
about $100 million annually (3X its ad budget to
license big name athletes, players’ associations
and teams.
• For example Fifa alone requires hundreds of
different licenses
• But at the end of the day, EA does not complain.
A few years ago EA sold 15 million digital and
hard copies of Fifa 2011, which netted $150
million in revenue in the first week alone
Paying To Be Seen
• EA has a promotional alliance with many sports
companies. Companies like Nike and Reebok pay
millions each year to have their logos on digital
players.
• In EA’s Need For Speed, players receve text
messages that bear the AT&T logo. A strategy
used to target a generation raised on instant
messaging.
• A poll done by NEAA says that this kind of
placement is favorable for brand recall and brand
perception.
Losing in a Crowded Market
• Nintendo’s Wii
• The Wii’s innovative new controller allows for more player
movement.
• Nintendo scored big with Activision, as well as, their Call of
Duty series.
• Guitar Hero & Rock Band
• Not only were band games a new popular way to play, but
guitar style controllers are cheaper than traditional ones.
• Apple
• When Apple released the App Store in 2008, a new gaming
platform was created.
• Portable gaming is now more popular than ever with
improved iOS devices.
EA’s Comeback
• MMOG
• EA entered the massive multiplayer online games
scene last year with Star Wars: The Old Republic.
• Franchises
• With popular new games such as Mass Effect &
Dead Space, EA has been sucessful in creating
sequel games in a market that remains to be
difficult to compete in.
• Online Success
• The company has seen large positive responses to
Madden NFL Superstars releases to Facebook.
Playing For Keeps
• Despite success, EA faces challenges
from competing companies, cost of
doing business, and dissastified
gamers.
• Can EA overcome these challenges
and continue to be successful for a
long period of time?
Discussion Questions
• How can feedforward, concurrent, and feedback controls help
Electronic Arts meet its quality goals for video games?
• Feedforward allows EA to decide if the game will be successful
before the production begins. Concurrent controls allow EA to
find out how the game reception will be during production.
Feedback controls allow EA to see how the people view the game
after the game has been released.
• Can you see the principle of management by exception at play
in any of EA’s recent business decisions? Why or why not?
• Yes. EA recently brought back a discontinued game franchise
(NBA Live) because of the increased popularity in basketball
games. They have also discontinued 3 game franchises (MVP
Baseball & NCAA Football & NCAA Basketball) due to popularity
issues and legal issues.
Problem Solving
• The Video Game Production Process
• To start, you would idenfity the type of game that you
would want to make (sports, RPG, adventure, FPS).
After you identify what type of game you want to
make, you would develop a story line with a plot,
setting, and characters. Then you begin designing the
game. After the game has been developed, you would
find beta testers to come and test the game and give
you feedback on it. After you have done that and fixed
all the bugs that the testers have identified, you would
send the game out for public release. Then if the game
is a success, you would begin to develop a sequel and
repeat the process over again.
Further Research
• EA has recently released a new Battlefield game and they are
currently in the process of developing a new Star Wars
Battlefront game. The release of the new Star Wars game
would allow for EA to attempt to regain video game
supremacy.
• EA seems to be positioned well for future competitive
advantage with the games that they currently have on the
market and ones that are currently being produced.
• Overall, it seems that EA’s executive team is still on its game.
The releasing of the new Star Wars game would, in my
opinion, bring them back on top and show the world that EA’s
executives have not lost a step.