Electronic Arts and the Global Video Game Industry Essay

2158 Words Jun 17th, 2005 9 Pages
Environmental Analysis
Demographic trends

Gaming has become an important part of growing up for people who were born in the last 25 years. Approximately 3.9 - 4.7% of total world population (250 to 300 million people) is ¡§very active¡¨ or a ¡§frequent¡¨ player of video games or at least owns the necessary equipment. This target group spends five or more hours a week playing video games. The United States is the largest video game market in the world with about 50% of the US population (145 Million people) spending 6.5 hours a week on computers and video games. The majority of video game players are preteens, teenagers, and young adults (between the age of 20 and 40). A full 70% of college students play video games at least
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Business Strategy

EA¡¦s current strategy is to focus on franchise and sports related games that develop loyal followings and repeat sales. They use a unique multi-lingual/multi-platform approach to producing and distributing games around the world. The company¡¦s three main differentiators are their internal sports culture, ability to localize games, and international distribution.
Functional Strategies

Product strategy: EA¡¦s product strategy is based on the franchise model. 70% of their sales consist of new releases of previous hits. They also seek to be toward the cutting edge of technological innovation. Sales strategy: The company¡¦s current sales strategy is to use their field sales representatives and call centers to sell their games to over 80,000 retailers. Internationally EA has strong sales in Europe with a relatively weak representation in Asia. Their strategy in that arena is to spread the fixed costs of producing a game over as many different sales channels as possible. Marketing Strategy: Sustain leadership status in industry by simultaneously promoting popular EA game titles and releasing localized multi-lingual games on several platforms. EA Sports VP is branding EA Sports as a ¡§sports company that makes games as opposed to a game company that makes sports games.¡¨ EA sets the price of their products from $30-$50. Electronic Arts has set lower prices for their classic titles. HR Strategy: To attract creative
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