Electronic Arts Analysis Essay Example For Students

Electronic Arts Analysis Essay Bare tried to find a buyer for his invention but had trouble finding interested parties. Finally in 1371 he struck a deal with Magna to produce the Magna Odyssey which was sold in 1972. Unfortunately the product was poorly advertised and extremely overpriced and eventually was forgotten by most people. This event marked the beginning of the video game industry which took another 10 years or so to evolve. On May 28, 1982 Trip Hawkins new venture Amazing Software was established with an estimated $200,000 personal investment, Several months later, in December, Hawkins stabilized the company further with 2 million dollars of venture capital from Sequoia Capital guaranteed. Shortly thereafter the company changed its name to Electronic Arts (EAI). They took a novel approach at giving credit to its developers which is one of their early trademarks. EAI was the first video game publisher to treat its developers like artists in an industry where developers were more likely to be treated like factory workers, EAI also shared lavish profits with their developers, which added to their industry appeal. Electronic Arts, Inc. Engages in the development, publishing, and distribution of interactive software games that are playable by consumers on in-home video game players, personal computers, mobile video game players, the Internet, and worldwide (www. Finance. Yahoo. Com). They manufacture many different types Of games Which include adventure, action, role playing, simulations, strategy, and sports. The company has development and production studios situated around San Francisco, Los Angles, Orlando, Chicago, Vancouver, Montreal, London, and Tokyo. Develops their games from within the company but they also elaborate with other game developers to produce the software which EAI eventually publishes, markets, and distributes. They also offer a free web site which carries four brands of games which include: Pogo, EAI Games, EAI Sports, and EAI Sports Big, Electronic Arts operates with, or uses four different suppliers in the production of their video games. Sony and Nintendo supply the CDC, DVDs, and optical disks on which Electronic Arts furnishes to make video games. There are companies that press the disks and convert them into video games. There is a company that makes and prints the instruction booklets. And finally here is a company that packages and boxes the video games tort shipment. There are around 250 to 300 million video gamers worldwide that play video games frequently and about 100 million infrequent users. The average age of video gamers ranges from 20 to 40 year old range including preteens, teenagers, and young adults. The average age of video gamers is rising due to the amount of teenagers continuing to play throughout their adult years. As a result of this game developers are releasing games with more mature content. The video game industry has grown because Of several factors including broader game intent, the evolution of the video game consoles, better graphics, and the ability to play games online. The software segment of the video game industry was highly competitive, characterized by the continuous introduction Of new games and updated game titles and the development of new technologies for creating and playing games. The developers of software games ranged from small companies with limited resources to large corporations with significantly greater resources for developing, publishing, and marketing video game software (Thompson Gamble, 2006, pig. 08). While these companies are in competition with each there they are also in competition with Sony, Microsoft, and Nintendo to get licensed to make games for specific consoles. EAI manufactures its games tort use with three major consoles in the video game industry, EAI revenues in 2003 for each platform included from Sonnys Palpitation 2, 7% a ttributed to Nineteens Gamecock, and 9% generated from Microsofts Oxbow. In 1994, Electronic Arts was authorized to develop and distribute Cd-based software for Palpitation, with all Palpitation Cads being sourced from Sony (Thompson Gamble, 2006, pig_317), They released I g new video game titles in 2003 as compared to 18 in 2002. Their relationship with Sony is considered good. In 2001 EAI signed a licensing agreement stating that Nintendo would supply all the optical disks for making the games directly to EAI. They released 17 games worldwide as opposed to 5 in 2002. EAI believes that they have a strong relationship vita Nintendo. In their licensing agreement with Microsoft Electronic Arts was authorized to develop and distribute DVD-based video games to play on the Oxbow; unlike its agreement with Sony and Nintendo, it was not compelled to source its DVDs from Microsoft (Thompson Gamble, 2006, pig. 318). Their relationship was further strained when Microsoft denied the collecting of revenues from online play of Oxbow games. It is not clear though whether this would affect their relationship with Microsoft in the future. There is widespread competition within the development and production of video games. Trifles EssayElectronic Arts relies on the strength Of its brands, marketing and development prowess, and through acquisitions and strategic partnerships. Atop of the electronic garbing industry Electronic Arts is emerging as the leading developer and publisher of interactive entertainment software for personal computers(Dell PCs), Sony Palpitation 2 computer entertainment systems, Sonnys SSP, Microsoft Oxbow 360 video game console, Nintendo Gamecock, and Game Boy Advance. The company markets its products worldwide under four brand logos and has more than 33 product franchises that ACH has reached more than a million unit sales worldwide. To create its games, Electronic Arts incorporates video, photographic images, motion capture, 3-d face and body rendering technologies, computer graphics, and stereo sound with contributions from story. Verities, film directors, and musicians, They also have a strong hold on licensing deals with big name sports figures including Tiger Woods. Recently the company paid 800 million for exclusive rights to make games using players and team logos from the NFG The increasing popularity of sports games among consumers culminates substantial sales for the company. As a result, Electronic Arts can put more money into the research and development and the technology of their games. The next element of Electronic Arts business strategy is the companys ability to develop procedures into efficient, standard, and repeatable processes. By its nature, creativity defies standardization, and Electronic Arts has found a way to balance these two competing business needs. Electronic Arts runs an impressively tight supply chain that enables it to send games for localization in multiple languages and releases them around the world, usually within the same day. Those repeatable processes have fostered trust between Electronic Arts and its retailers. When the company launches a title to, its retailers all know they will have the new game on their shelves at exactly the same time their competitors will have it. Nintendo historically has been strong in this market. They typically have been positioned at a younger demographic, They tend to be first-party centric in terms of their software, where they control a lot more of their own software sales on their platform. Their new platform the Nintendo Revolution is expected to be out in the spring. Songs array tot hardware and software products is creating a new high definition value chain that starts with cameras and goes through projectors and television sets and finally Palpitation 3, due out in the fall of 2006. Owning the content as they do is all of the sudden part of the integrated relationship with its devices. Each understands the value of the other and that is vatu makes Sony so unique, since they make them both. Microsofts Oxbow 360 avgas just released on November 22 with 18 titles as opposed to the original Oxbow which was released with only II titles. The reason why is because hey have more third-party support from publishers like EAI and Activation. These two developers alone are producing g out of the 18 games available which come from a total of four publishers. Some say that the lineup is a little sports heavy but there is actually a good mix between sports, shooters, first person, action, adventure, and racing games. Dont say goodbye to the original Oxbow yet, Microsoft says that they have enough parts and supplies to manufacture it through next summer. This will help smaller developers to publish games for the older systems so they dont have to go head to head With EAI and Activation on he newer consoles. In the short term game innovation could become a problem in the marketplace. The soaring development costs for the new consoles will put at least a few smaller game publishers out of business. Electronic Arts is by far the most successful third-party publisher today. Not only is it the lone computer game publisher to survive the Golden Age (1979-1992) still controlling its own fortunes, but those fortunes have surpassed all others in the industry routinely making over one billion dollars each year, In fact, several classic publishers are now wholly owned subsidiaries tot Electronic Arts including: Origin, Maxis, Westwood Associates, and Bullfrog. Electronic Arts success over the years was built upon a huge library of great games. Unfortunately all of these studios were closed except for Maxis leaving many top designers and programmers out of a job and not willing to work for EAI.