Business

SWOT ANALYSIS

Ñ"ж INTERNAL STRENGHTS

Ñ"ж INTERNAL WEAKNESSES

Ñ"ж EXTERNAL OPPORTUNITIES

Ñ"ж EXTERNAL THREATS

INTERNAL STRENGTHS

Global Reach:

EA has two major design studios, one in Vancouver and another in Los Angeles. Smaller designs studious are located in San Francisco, Orlando, London, and Tokyo. The spread out and location of these design studious allows EA to have a global reach. EA specifically targets consumers in three main markets, the United States, Europe, and Asia. The various geographical locations of EAÐŽ¦s design studious enables EA to design games that are specific to different cultures. This strength that EA possesses and is unmatched within the game industry gives EA the power to launch its video games on multiple playing platforms, in numerous countries, and in many languages at the same time. EA has successfully launched its latest Harry Potter game simultaneously in 75 countries, on 7 different playing platforms, and in 31 different languages. International game sales account for a significant growing portion of EAÐŽ¦s revenues.

Creative Process:

EA has become and continues to be the leading independent video publisher chiefly due to its unique creative process. Teams that create games for EA consist of programmers, digital animators, and creative people who have backgrounds in the TV, music, and movie industries. This type of full service in house design teams allows EA to create and develop new video games in as little as 18 months time. EAÐŽ¦s full service design teams are able to design more cost effective video games and they are able to efficiently covert games from one playing platform to another.

Brand Name Recognition:

Consumers have associated EAÐŽ¦s brand name as the leading video game publisher due to EAÐŽ¦s use of cutting edge technology in graphic design and the incorporation of intellectual property and licensed content to make its games more realistic. Content included in EA games comes from all of the major sport leagues, movie studies, popular performing artists, music studios, and book authors. EA games are also recognized as being free of any content that contains profanity, crime, violence, and sex. This policy allows EA to market its video games to a wider and larger target market. During the past twenty years EA has been recognized for this policy and has won over 700 awards for outstanding software in the United States and Europe.

Relationship with the 3 Major Console or Platform Manufacturers:

EA has good relationships with the 3 major console makers Sony, Nintendo, and Microsoft who represent approximately 55% of EAÐŽ¦s total revenues. EAÐŽ¦s working relationships with Sony and Nintendo is extremely good which is important because they also manufacture popular portable playing platforms which are SonyÐŽ¦s PSP and NintendoÐŽ¦s GameBoy SP. The mobile gaming market is growing strongly and has the potential to become a 38 billion dollar industry.

Strong Distribution Channels:

EA games were available for purchase in over 80,000 retail locations worldwide. A list of retail stores within the U.S. that carry EA games includes Wal-Mart, Toys ÐŽ§RЎЁ Us, Best Buy, Circuit City, Target, and Game Stop stores. This allows EA to reach all of its target markets nationally and internationally. Also, numerous smaller independent video game makers pay a service fee to EA to provide distribution services for their games. This is a growing form of revenue for EA.

Focus on Franchise Games:

Due to the high cost of creating, publishing, and marketing of new video games EA has implemented a strategy that eliminates slow selling games while concentrating its efforts to create ÐŽ§Franchise Games.ЎЁ Franchise games are original hit titles which EA then releases new and updated versions of that hit game every year. This approach has been rather successful with all of EAÐŽ¦s pro sports video games. Along the same lines, EA also periodically releases ÐŽ§Expansion Packs,ЎЁ for previously published hit games in which new characters, storylines, settings, and missions are added. This strategy allows EA to work on fewer projects while allocating all of its resources to making its most popular games even better. Roughly 70% of EAÐŽ¦s revenue comes from new releases of existing games or ÐŽ§Franchise Games.ЎЁ

Expansion into Pro Sports Themed Games:

EA has been highly successful with its publishing of video games that are themed after popular professional sport leagues. EA places high level of importance in making these games as realistic as possible and therefore has signed licensing agrrements for intellectual property and content with all of the major professional sport leagues. EA then produces a new and updated version of these sport themed video games each year. In 2006 the line up for EA sport games include NFL Football, NBA Basketball, NHL Hockey, MLB Baseball, FIFA Soccer, NCAA Basketball, Baseball, and Football, PGA Golf, NASCAR Racing, Rugby, and Boxing.

INTERNAL WEAKNESSES

EAÐŽ¦s Policy of Not Publishing Games with Mature Content:

Although on a social level the policy of not using mature content is strength, economically this policy is a weakness. The video game industry is fiercely competitive and EAÐŽ¦s competitors due publish games that have mature content. Numerous hit video games that have been published and have earned million of dollars contain mature content. An example of this weakness can be seen from EAÐŽ¦s acquisition of Westwood Studious in 1998. Westwood Studious had developed a best selling game called ÐŽ§Thrill KillЎЁ which contained mature adult content. Senior management felt that ÐŽ§Thrill KillЎЁ did not fit EAÐŽ¦s portfolio of clean games and had it discontinued. The discontinuation of ÐŽ§Thrill KillЎЁ did not go over well with many consumers and even employees