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Electronic Arts

From Medal of Honor

Template:POV Template:Infobox Company

"EA" redirects here. For Electronic Arts' sports label, see EA Sports. For other uses, see EA (disambiguation).

Electronic Arts (EA) (Template:Nasdaq) is an American developer, marketer, publisher, and distributor of computer and video games. Established in 1982 by Trip Hawkins, the company was a pioneer of the early home computer games industry and was notable for promoting the designers and programmers responsible for their games. EA was just a publisher for its first few years and exclusively published for home computers, but began developing games in-house in the late 1980s and started supporting consoles in the early 1990s. Also in the 1990s, EA began to expand by acquiring several successful developers and, as of the early 2000s, EA has become the world's largest third-party publisher, with a net revenue of US$3.129 billion for its fiscal year March 31, 2005. [1] Currently, the company's most successful products are sports games published under their EA Sports label, games based on popular movie licenses and games from long-running franchises like Need for Speed, Medal of Honor, The Sims and Command & Conquer. The company has also been the subject of criticism, most notably for its business tactics, employment policy and lack of innovation in its titles.

Taglines

  • EA Games, Challenge Everything.
  • EA Sports, to the game!
  • EA Sports, it's in the Game!


Contents

[edit] History

Electronic Arts' historic logo.

In 1982, EA, then known as Amazin' Software, was established and incorporated with a US$2 million venture capital investment from Sequoia Capital, Kleiner, Perkins, Caufield & Byers, and Sevin Rosen Funds. By the end of the year, Amazin’ Software had grown to 11 employees, necessitating the establishment of the company’s first headquarters in San Mateo, California.

According to the 1982 business plan, the company’s original business goals were to grow to a billion-dollar company within its first six years and to "make software that makes a personal computer worth owning." At the time, Electronic Arts was the 136th game publisher in the U.S. EA eventually attained its goal of becoming a billion-dollar company, though it took 12 years to do so.

Since its inception, EA has taken a unique approach to the industry. On the business side, EA pioneered the strategy of developing direct relationships with retailers and selling its games directly to retail, which was something no other computer software company had done. This strategy, coupled with the fact that the company was selling new, unproven titles, made sales growth difficult at first because retailers typically sought established brands from existing distribution partners. In spite of this challenge, EA achieved revenue of US$5 million in the company’s first year and US$11 million the next. Current CEO Larry Probst arrived as vice president of sales in 1984 and helped grow revenue to $18 million. Probst expanded the sales team to create the largest sales force of any American game publisher. The strategy of working directly with retailers paid off, rewarding EA with higher margins and better market awareness. EA leveraged these key advantages to leapfrog its early competitors.

The company also adopted the novel approach of treating videogame developers like rock stars. This characterization was reinforced by the company’s packaging—most of its games were packaged in an "album cover" format in the late 1980s and early 1990s. The company felt this style of packaging would help to convey an artistic feeling. EA routinely referred to its developers as "artists," acknowledging them with photo credits on game packaging and in advertising. EA also shared profits with its developers, which enhanced the company’s industry reputation and appeal. It was due in part to this unique philosophy that EA was able to attract the best creative talent.


[edit] Sales strategy

Hawkins was determined to sell directly to retailers. Combined with the fact that Hawkins was pioneering new game brands, this made sales growth more challenging. Retailers wanted to buy known brands from existing distribution partners. Despite this, revenue was $5 million in the first year and $11 million the next. Current CEO Larry Probst arrived as VP of Sales in late 1984 and helped the company sustain growth into $18 million in its third full year. Teaming with the existing sales staff that included Nancy Smith, David Klein, and David Gardner, Probst built the largest sales force of any American game publisher. This policy of dealing directly with retailers gave EA higher margins and better market awareness, key advantages the company would leverage to leapfrog its early competitors.

In 1995 David Gardner and Mark Lewis moved to the UK to open an office there. Up until that point publishing of Electronic Arts Games, and the conversion of many of their games to compact cassette versions in Europe was handled by Ariolasoft. A small company in Wales was already called Electronic Arts, and until 1997 Electronic Arts in the UK was known legally as EOA, a name derived from its square/circle/triangle logo. The Welsh company ceased trading in 1997 and Electronic Arts acquired the rights to the name.

[edit] Name change

Some of the early employees of the company disliked the Amazin' Software name that Hawkins had originally chosen when he incorporated the company. While at Apple, Hawkins had enjoyed company offsite meetings at Pajaro Dunes and organized such a planning offsite for EA in October 1982. After a long business day at the offsite, the dozen employees and advisors who were present agreed that they would stay up that night and see if they could agree unanimously on a new name for the company.

Hawkins had developed the ideas of treating software as an art form and calling the developers, "software artists." Hence, the latest version of the business plan had suggested the name "SoftArt". However, Hawkins and Melmon knew the founders of Software Arts, the creators of VisiCalc, and thought their permission should be obtained. But Dan Bricklin did not want the name used because it sounded too similar (perhaps "confusingly similar") to Software Arts. However, the name concept was liked by all the attendees. Hawkins had also recently read a best-selling book about the film studio, United Artists, and liked the reputation that company had created. Early advisors Andy Berlin, Jeff Goodby, and Jeff Silverstein (who would soon form their own ad agency) were also fans of that approach, and the discussion was led by Hawkins and Berlin. Hawkins said everyone had a vote but they would lose it if they went to sleep.

Hawkins liked the word "electronic", and various employees had considered the phrases "Electronic Artists" and "Electronic Arts". Other candidates included Gordon's suggestion of "Blue Light", a reference from the movie "Tron".

When Gordon and others pushed for "Electronic Artists", in tribute to the film company United Artists, Steve Hayes opposed, saying, "We're not the artists, they are..." meaning that the developers whose games EA would publish were the artists. This statement from Hayes immediately tilted sentiment towards Electronic Arts and the name was unanimously endorsed.

According to the 1982 business plan, EA's original business goals were to grow to a billion dollar company in about 6 years. Another goal was to "make software that makes a personal computer worth owning." At the time, Electronic Arts was the 136th game publisher in the U.S., but went on to be the first to reach the billion-dollar goal, taking 12 years to do so.

[edit] Sharing credit

A novel approach to giving credit to its developers was one of EA's trademarks in its early days. EA was the first video game publisher to treat its developers like rock stars in an industry where developers were more prone to be treated like nameless factory workers. This characterization was even further reinforced with EA's packaging of most of their games in the "album cover" format of the late 1980s and 1990s. This format was pioneered by EA because Hawkins thought that a record album style would both save costs and convey an artistic feeling. EA routinely referred to their developers as "artists" and gave them photo credits in their games and numerous full-page magazine ads. EA also shared lavish profits with their developers, which added to their industry appeal. Because of this novel treatment, EA was able to easily attract the best developers.

The box cover for 1983's M.U.L.E. The square "album cover" boxes were a popular packaging concept by Electronic Arts, which wanted to represent their developers as "rock stars". Many games of the era were released in the album covers of identical size and shape.

In May 1983 EA shipped:

Three of these five—Archon, Pinball Construction Set, and M.U.L.E.—are still considered cornerstone products in the history of video games. Worms? is unrelated to the Worms series of turn-based artillery games; it is a computer toy in which the user trains worms—represented as lines—to move in patterns on a network of nodes.

[edit] Trip exits

After a very successful run on home computers, Electronic Arts later branched out and produced console games as well. Eventually Trip Hawkins moved on to found the now defunct 3DO company. In 2003 he founded a new mobile phone software company, Digital Chocolate, that also began life in the Sequoia offices and had Sequoia Capital and Kleiner Perkins as its lead investors.

In 2004, EA made a multimillion dollar donation to fund the development of game production curriculum at the University of Southern California's Interactive Media Division. In addition to the funds, EA staff members have been actively teaching and lecturing at the school.

[edit] EA under Probst

EA is now headquartered in Redwood City, California. Following the departure of Trip Hawkins, Larry Probst took over the reins and led the company to its current size and stature. Hawkins was essentially an entrepreneur; Probst a manager more suited to a large corporation.

Pinball Construction Set was an enormous hit for EA. The original version for the Apple II by Bill Budge was quickly ported to other popular home systems of the era.

Probst considered himself a man of principle and has refused to follow the M-rated example set by Take Two Interactive, whose violent Grand Theft Auto franchise became the dominant brand in many key demographics from 2000 through 2003. As a result, Probst was heavily criticized by Wall Street analysts, who believe that because of this policy, EA's stock price is lower than it should be (though it has maintained a general upward trend in recent years). In late March 2005, Electronic Arts issued its first ever mid-quarter profit warning blaming hardware shortages and lower than expected fourth quarter sales.

Not that M-rated games are new to EA: in 2000 EA approved its first M-rated game, Quake III for the PS2, which was closely beat to market by another EA M rated game: Clive Barker's Undying. Recently, Probst has changed his overall stance on M-rated games, and now EA has several titles that compete in the M-rated, adult game market.

On February 1, 2006, Electronic Arts announced that it would cut worldwide staff by 5 percent. [2]

On June 20 2006 EA purchased Mythic Entertainment, currently working on Warhammer Online.

In February 2007, Probst stepped down from the CEO job while remaining on the Board of Directors. His handpicked successor is John Riccitiello, who had worked at EA for several years previously, departed for a while, and then returned. Riccitiello previously worked for Sara Lee and Pepsico.

[edit] EA development strategy

Much of EA's success, both in terms of sales and with regards to its stock market valuation, is due to its strategy of platform-agnostic development and the creation of strong multi-year franchises. EA was the first publisher to release yearly updates of its sports franchises - Madden, FIFA, NBA Live, Tiger Woods, etc. - with updated player rosters and small graphical and gameplay tweaks.

This strategy proved so successful that it has been widely copied in the rest of the industry, with competitors like Konami and 2K Games releasing yearly updates of their sports games, and the majority of third-party publishers spreading their development across as many platforms as possible.

EA also depends heavily on regular iterations of its many non-sports franchises like Need for Speed, Battlefield, The Sims, and Burnout. Recognizing the risk of franchise fatigue among consumers, EA announced in 2006 that it would concentrate more if its effort on creating new original IP.[3]

[edit] Criticism

As the largest third-party developer, EA has repeatedly become the lightning rod for gamers' and games industry employees' misgivings about the game industry in general.

EA is often criticized for buying smaller development studios primarily for their intellectual property assets, and then making the developers produce run-of-the-mill games on these same franchises. For example, Origin-produced Ultima VIII: Pagan and Ultima IX: Ascension were developed quickly under EA's ownership, and these two are considered by many as not up to the standard of the rest of the series. Productions from EA owned studios as of late have generally not been known for their originality.Template:Fact

EA is also criticized for shutting down its acquired studios after a poorly performing game. Many see EA's control and direction as being primarily responsible for the game's failure rather than the studio. Magic Carpet 2 was rushed to completion over the objections of designer Peter Molyneux and it shipped during the holiday season with several major bugs. Studios such as Origin, Westwood Studios, and Bullfrog had previously produced games attracting a significant fanbase, and when they were closed down many top designers and programmers refused to stay with EA and formed rival studios. EA has also received harsh fire from labour groups for their dismissals of large groups of employees during the closure of a studio (see below). Such was the case with the game GoldenEye: Rogue Agent.

EA has also a reputation for rushing out products, setting extremely short deadlines and emphasizing good graphics to compensate for a lack of gameplay innovation. Titles such as the Battlefield games are under this category as there are complaints of laggy online play.Template:Fact In several occasions, EA has also declared openly that it will not continue to develop patches for relatively new but still buggy titles, like Need for Speed: Most Wanted, Need for Speed: Underground and some of the latest Command and Conquer games.

Electronic Arts announced it would not support the Sega Dreamcast unless it sold 1 million units. When this happened within a record 90 days, EA went back on their word and declined to support the Dreamcast in favour of Sony's PlayStation 2.Template:Fact

EA has also been criticized for other aggressive business methods like the acquisition of 19.9 percent of shares of their competitor Ubisoft in what was called a "hostile act" by Ubisoft CEO, Yves Guillemot.[4]

EA owns Pogo.com which is one of the most popular online game sites on the Internet. Many games on Pogo.com allow the players to talk with each other in small chat windows that are part of the game. There is considerable concern over the heavy handed tactics used by Pogo to enforce the company's policies regarding what speech is allowed in the chat windows. At present, a person who joins Pogo by paying the fee up front can find that he or she has been banned from playing any games if a single word or phrase is mentioned in chat that violates Pogo's restrictions on speech. A person who is new to Pogo.com is expected to know all the rules immediately. Typically, most sites will warn customers who do something that violates a rule. Banning users for anything less than repeated violations is not common on many game sites. Because Pogo's restrictive speech policy is so broad, it is very easy to violate. Customers have no recourse. Even if temporarily banned from playing games, Pogo provides no information about how long the ban will be in place. Bans that are temporary often prohibit customers from playing games for long periods of time. Because Pogo.com is not free, banning a customer from using games amounts to a financial penalty. Pogo does not offer the banned customer a refund. Also Pogo appears to not want to pay the winners of their jackpot winning. Heres one complaint : http://www.epinions.com/content_379460619908 and another http://www.complaintsboard.com/complaints/pogocom-c15197.html .


[edit] Employment policy

Electronic Arts has been criticized for its employment policy of requiring employees to work extraordinarily long hours—up to 80 hours per week—as a general rule and not just at "crunch" times leading up to the scheduled releases of products. The publication of the EA Spouse blog, with criticisms such as "The current mandatory hours are 9 a.m. to 10 p.m.—seven days a week—with the occasional Saturday evening off for good behaviour (at 6:30 p.m.)"[5]. The company has since settled a class action lawsuit brought by game artists to compensate for "unpaid overtime" EA management demanded of its employees[6]. The class was awarded $15.6 million. As a result, many of the lower-level artists are now working at an hourly rate. A similar suit brought by programmers was settled for $14.9 million. [7]

[edit] Exclusive licenses

Some think Electronic Arts' sports licenses are threatening the game market. After Sega's ESPN NFL 2K5 successfully grabbed market share away from EA's dominant Madden NFL series during the 2004 holiday season, EA responded by making several large sports licensing deals which include an exclusive agreement with the NFL, and in January 2005, a 15-year deal with ESPN, much as with Take Two Interactive's exclusive licensing deal with baseball's Major League. Contrary to what is often believed, however, the NFL was the initiator of the exclusive license transfer. The ESPN deal gives EA exclusive first rights to all ESPN content for sports simulation games. On April 11 2005, EA announced a similar, 6-year licensing deal with the Collegiate Licensing Company (CLC) for exclusive rights to college football content. Critics believe that the reduced competition is likely to result in fewer improvements for subsequent versions than would otherwise occur.

Electronic Arts was also subject to much criticism after releasing the title NASCAR SimRacing, an anticipated auto racing simulation. Upon its release, it was found to be extremely buggy, with numerous software issues requiring a patch. After substantial delay, a patch was released, but it did not resolve issues in multiplayer that essentially prevented competitive online racing. There is no indication that EA plans to release further fixes, as the last patch was released over 6 months ago. This was particularly aggravating to players because EA held the exclusive license to all NASCAR games, and the lack of competition gave EA little incentive to update the game, however some of the members in the sim community are beta testers for EA and painted their own cars and put them up for download as updates to the game to reflect the current Nascar Nextel Cup season.

Electronic Arts also has the license to the Lord of The Rings series and has thus been slow in responding to criticism of both of their RTS games in the series (Battle for Middle Earth I/II, which both have received favorable reviews from various sites), including little to no multiplayer support, which proves to be bugged.

[edit] Online strategy

Many EA Sports games are only supported for online play by EA for two years, forcing gamers to buy the next increment in the series (at full price) to continue playing online afterwards.

EA originally refused to allow their games on Microsoft's highly acclaimed Xbox Live online service, which is run through Microsoft's own servers, due to arguments between Microsoft and EA about the distribution of revenue from online play. EA finally agreed to release games on Xbox Live on the condition that Microsoft allow the games connect to the EA servers in order to play them online. EA online games for the Xbox generally suffer from more glitches and delays. Many users in Europe have complained about the performance of EA's servers, particularly on the game Burnout 3, questioning the logic of providing a central service only to decentralize servers for certain titles.

The Battlefield 2 online demo was roundly condemned by the gaming community since EA instituted a 10-15 minute time play time limit (unheard of at the time) and shut down servers who ran mods on the demo version. EA in general has discouraged fan-made patches and mods, and they have shut down popular fan-made game modifications, resulting in criticism that they could transform the gaming industry into one that is hostile towards fan modifications.Template:Fact

The Battlefield 2 community expressed criticism of the game for prioritizing changes to gameplay with its patches in lieu of working towards a stable game, addressing existing bugs, and eliminating exploits.

EA was subjected to a degree of criticism over the alleged use of tracking cookies and scanning surfing habits via Battlefield 2142. EA later released an explanatory note detailing exactly what was tracked, revealing that data was only collected ingame and was utilized in the targeting of ingame ads. IGA Worldwide CEO Justin Townsend was also interviewed by Gamasutra about the controversy [8].

[edit] MMOG strategy

EA have cancelled a number of Massively multiplayer online games either before launch or shortly after release.

Cancellations:

Shutdowns:

Two MMOG published by Electronic Arts are still operating today:

On June 20 2006, EA purchased Mythic Entertainment, currently developing Warhammer Online.

[edit] Game quality

A long-standing and frequent criticism of EA is that the company releases buggy software with shallow gameplay. However, EA is the best reviewed third-party publisher by some distance, only beaten by Nintendo among all major publishers. For 2006, the games review aggregation site Metacritic.com[10] gives the average of EA games as 72.0 (out of 100); 2.5 points behind Nintendo (74.5) but ahead of the other first-party publishers Microsoft (71.6) and Sony (71.2). The closest third-party publisher is Take 2 (publishing as 2K Games and Rockstar) at 70.3. The remaining top 10[11] publishers (Sega, Konami, THQ, Ubisoft, Activision) all rate in the mid 60's.

[edit] Notable games published

By purchasing development studio Maxis, EA obtained the rights to publish the lucrative SimCity series and the spin-off game The Sims and its sequel The Sims 2. [12]

Some of the most notable and popular games of video game history have been published by EA, and many of these are listed below. Though EA published these titles, they did not always develop them; some were developed by independent game development studios. EA developed their first game in 1987.

Template:Seealso

Electronic Arts also published a non-game title, though it was closely related to the video game industry and was actually used by several of their developers. Deluxe Paint premiered on the Amiga in 1985 and was later ported to other systems. The last version in the line, Deluxe Paint V, was released in 1994.

[edit] Brand architecture

The brand architecture of Electronic Arts consists of the following brands:

  • EA (all non-sports titles) — The simple EA brand replaced EA Games in 2005
  • EA Sports (realistic sports simulations)
  • EA Sports BIG (extreme sports titles)
  • EA Mobile (mobile phone and iPod games, previously JAMDAT)
  • Maxis (Life simulation titles) — Produces games with the "Sims" title (such as SimCity and The Sims)
  • Pogo.com (online games site, with numerous EA brand tie-ins)

EA also operates the games channel on AOL.

[edit] Studios

EA Redwood Shores

[edit] Current studios

[edit] Former studios

[edit] Slogans

  • "We see farther." - Founding tag line
  • "EA Sports, it's in the game." - a shortened version of their original slogan "If it's in the game, it's in the game."
  • "EA Games, challenge everything."

[edit] See also

[edit] References

  1. ↑ SEC EDGAR Filing Information
  2. ↑ Electronic Arts cuts staff by 5 percent from GameSpot
  3. ↑ EA moves towards new IP's from Gamesindustry.biz
  4. ↑ Ubisoft CEO Speaks on Takeover - TotalGaming.net news, 22 September, 2005
  5. ↑ The original ea_spouse blog entry at LiveJournal
  6. ↑ "Employees readying class-action lawsuit against EA" from GameSpot
  7. ↑ "Programmers Win EA Overtime Settlement, EA_Spouse Revealed" from Gamasutra
  8. ↑ IGA's Townsend On BF2142 In-Game Ads, Gamasutra, October 17, 2006
  9. ↑ 9.0 9.1 MMOGChart.com
  10. ↑ Metacritic.com
  11. ↑ Top 10 publishers according to Game Develop magazine
  12. ↑ "The Sims overtakes Myst" article from GameSpot

[edit] External links

Articles • Original "EA_spouse" blog on workers of EA • Aftermath of "EA_spouse" blog • Game makers see workplace changes from News.com • Article on interning at EA on ITworld.com • The Escapist Article on EA's relationship towards Origin: Varney, Allen. The Conquest Of Origin, Origin created worlds, EA shipped games, EA won. Retrieved on 2006-09-25. Retrieved from "http://en.wikipedia.org/wiki/Electronic_Arts"

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