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Electronic Arts

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Electronic Arts (EA) (NASDAQ: [ERTS]) 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 on its fiscal year March 31, 2005. [link] 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 and The Sims. The company has also been the subject of criticism, most notably for its business tactics and its employment policy.

Contents

History

In February 1982, Trip Hawkins arranged a meeting with Don Valentine of Sequoia Capital to discuss financing his new venture, Amazin' Software. Valentine encouraged Hawkins to leave Apple Computer, in which Hawkins served as Director of Product Marketing, and allowed Hawkins use of Sequoia Capital's spare office space to start the company. On May 28, 1982, Trip Hawkins incorporated and established the company with a personal investment of an estimated US$200,000. Seven months later in December 1982, Hawkins secured US$2 million of venture capital from Sequoia Capital, Kleiner, Perkins, Caufield & Byers, and Sevin Rosen Funds.

For more than seven years, Hawkins had refined his Electronic Arts business plan. With aid from his first employee (who he worked in marketing with at Apple), Rich Melmon, the original plan was written, mostly by Hawkins, on an Apple II in Sequoia Capital's office in August 1982. During that time, Hawkins also employed two of his former staff from Apple, Dave Evans and Pat Marriott, as producers. The business plan was again refined in September and reissued on October 8, 1982.

Between September and November, employee headcount rose to 11, including Tim Mott, Bing Gordon, David Maynard, and Steve Hayes. Having outgrown the office space provided by Sequoia Capital, the company relocated to a San Mateo office that overlooked the San Francisco Airport landing path. Headcount rose rapidly in 1983, including Don Daglow, Richard Hilleman, Stewart Bonn, David Gardner, and Nancy Fong.

Hawkins was determined to sell directly to retailers, which no computer software companies were yet doing. 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.

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 to their own. 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. Only Marriott had gone to bed, and it was now 2:00 AM.

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 the first to reach the billion-dollar goal (although it actually took 12 years).

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.
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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 of 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.

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 active teaching and lecturing at the school.

EA is now headquartered in Redwood City, California. Its current CEO is Larry Probst.

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.
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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 considers 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 has been 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 [link].

Recently, EA's CEO has changed his 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. [link]

On June 20 2006 EA purchased Mythic Entertainment, currently working on Warhammer Online. Some fans of Mythic's games expressed trepedation because of the way EA has handled previous company purchases.

Criticism

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Please see the relevant discussion on the [talk page].

Aggressive acts

EA is sometimes 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 under EA's ownership, and these two are considered among the worst of the series, obviously aimed at lowest common denominator audience. (Richard Garriott, the originator of the Ultima series, wasn't fond of EA at all, and previous Ultima games contained some subtle attacks on EA). Late productions generally have not been known for their originality; the latest Madden NFL title is a prime example whose main improvement is updated team rosters.

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. Such was the case with .

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.

Employment policy

Electronic Arts has from time to time 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 current mandatory hours are 9am to 10pm—seven days a week—with the occasional Saturday evening off for good behaviour (at 6:30pm)"[link]. The company has since settled a class action lawsuit brought by game artists to compensate for "unpaid overtime" EA management demanded of its employees[link]. 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 [link].

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 NFL Madden 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. 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 less improvements for subsequent versions than otherwise.

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), including little to no multiplayer support, which proves to be bugged.

Online strategy

Many EA Sports games for the PC and PS2 are only supported by EA's servers for one year, forcing gamers to buy the next increment in the series (at full price) to continue playing online afterwards.

EA was criticized for refusing to publish for the highly-touted Xbox Live online service, which is run through Microsoft's own servers and which charges a yearly flat fee, regardless of the number of titles. EA would not be able to retain use of its own servers for Xbox games and thus could not charge a monthly fee for every game as they could on the PS2. Unlike the PC and PS2 versions, EA would not have been able to discontinue support for last year's title on Live, reducing potential sales of their current title. EA capitulated in 2004 and started publishing for Xbox Live, under the condition that Microsoft dropped their sports range.

Despite having finally released games for Xbox Live, for which there is no charge to play specific games, EA releases them all 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.

The Battlefield 2 online demo was roundly condemned by the gaming community since EA instituted a 10–15 time playtime 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.

EA later came under criticism by the Battlefield 2 community after the release of the add-on pack, Special Forces. It contains new unlockable weapons which can then be used in the original BF2 game. These weapons are only available to players who have played Special Forces, generally meaning that players have to buy the Special Forces add-on to access them. Some sections of the community viewed this as EA charging players to gain an advantage in Battlefield 2. Other sources go further to state that this is just a front, and that the new unlockable content is rarely of use to the player.[[Citing sources citation needed]]

Historical 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. The Sims went on to become the best-selling computer game of all time.
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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. The Sims went on to become the best-selling computer game of all time.

Some of the most notable and popular games of video game history have been published by EA. Many of these are included in the list below. Though EA published these titles, they did not always develop them. Many were developed by independent game development studios. In fact EA developed their first game themselves only in 1987.

Brand architecture

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

EA also operates the games channel on AOL.

Studios

EA Redwood Shores
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EA Redwood Shores

Current studios

Former studios

Slogans

See also

External links

Articles

 

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