Electronic Arts and the Global Video Game Industry

Electronic Arts and the Global Video Game Industry

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 occasionally in a year and 100% had played at some point in their life. The average age of game players in the US in 2003 is 29 years old and hard-core gamers purchase 10-15 new games annually. Indeed, the average age of game players is rising because gamers continue to play into their adult years, of those over age 50, 17% play video games up from 13% in 2000. The number of females who played console games dramatically rose also to about 40%. It is interesting to note that gamers over the age of 35 like to play games on PCs while those younger than 35 preferred console systems.

Socio-cultural

Many people think spending many hours in front of either PCs or video game consoles is not a good hobby for kids. There are many issues such as health, personality, motivation and especially violence and aggression . Some people believe violence in video games and in other media promotes violent behavior among participants. It can contribute to players becoming overweight by decreasing outdoor activity and reducing the capability of eye-sight. The content of violent games could account for changes in the player's mood and cause him or her to become more aggressive or emotional.

Political/Legal

The video game business is an interdependent industry. Companies have to pay a customary royalty to the console makers. The console manufacturer have the power to authorize all games, limited the number of games, marketing plan and even the quantity of production. The guidelines and restrictions put forth by the Software Rating Board (ESRB) effects the content, storylines and features of vi...

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...at encourages creativity but also will pull the plug on ideas in the early stages so that they can concentrate resources on ventures that are more likely to pay off. Because of this most of the games EA creates are sequels to previously successful franchise brands. Finally, the company is one that prides itself on moral character. EA¡¦s Chairman and CEO Lawrence Probst states that ¡§EA will not publish games with gratuitous sex and violence.¡¨ This is an important distinguishing point in an industry that is know for pushing the edge of decency with regard to

sex, violence and drugs.

SWOT Analysis

Strengths

„X Dominate Player in market

„X Great game franchises

„X International reach

„X Strong talent pipeline

„X Moral leadership Weaknesses

„X Poor Relationship with Microsoft

„X Overly focused business (on games)

Opportunities

„X Mobile market

„X Cell phone market

„X In car equipment

„X Branch out into other forms of media (TV, movies)

„X Online gaming Threats

„X Rising production costs.

„X New entrants especially in the mobile market

„X Console upgrades

„X Increasing development costs