Electronic Arts

1. Electronic Arts By: Cody Butland, Michael Edward, Shane Harrington, & Jessica Prim

2. 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.

3. 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.

4. 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

5. 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.

6. 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.

7. 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.

8. 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?

9. 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.

10. 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.

11. 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.