Electronic Arts

Electronic Arts
Electronic Arts, Inc.
Type Public company
Traded as NASDAQERTS
NASDAQ-100 Component
S&P 500 Component
Industry Interactive entertainment
Computer and video games
Founded 1982
Founder(s) Trip Hawkins
Headquarters Redwood City, California, United States
Key people Larry Probst (Chairman)
John Riccitiello (CEO)
Products Battlefield series
Burnout series
Command & Conquer series
Dead Space series
Dragon Age series
FIFA series
Fight Night series
Madden NFL series
Mass Effect series
NHL series
Medal of Honor series
NBA Live series
Need for Speed series
Harry Potter series
Rock Band series
SimCity series
The Sims series
Skate series
SSX series
Revenue decrease US$3.654 billion (FY 2010)[1]
Operating income increase US$-706 million (FY 2010)[1]
Net income increase US$-677 million (FY 2010)[1]
Total assets decrease US$4.646 billion (FY 2010)[1]
Total equity decrease US$2.729 billion (FY 2010)[1]
Employees 8,000 (2010)[2]
Website EA.com

Electronic Arts, Inc. (EA) (NASDAQERTS)[3] is a major American developer, marketer, publisher and distributor of video games. Founded and incorporated on May 28, 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 its games. It is one of the largest video game publishers in the world.

Originally, EA was a home computing game publisher. In the late 1980s, the company began developing games in-house and supported consoles by the early 1990s. EA later grew via acquisition of several successful developers. By the early 2000s, EA had become one of the world's largest third-party publishers. On May 4, 2011, EA reported $3.8 billion in revenues for the fiscal year ending March 2011. EA began to move toward direct distribution of digital games and services with the acquisition of the popular online gaming site Pogo.com in 2001.[4] In 2009 EA acquired the London-based social gaming startup Playfish,[5] and in June 2011, EA launched Origin, an online service to sell downloadable games directly to consumers.[6] In July 2011, EA announced that it had acquired PopCap Games, the company behind hits such as Plants vs. Zombies and Bejeweled.[7]

EA is currently the No. 1 publisher in Western markets with a 16% segment share,[8] and the second-largest social games company on Facebook. EA's rankings have been propped up by the launch of The Sims Social, which is currently the fastest-growing game on Facebook.[9]

On May 4, 2011, EA reported $3.8 billion in revenues for the fiscal year ending March 2011. On July 27, 2011, EA reported fiscal first-quarter profits had more than doubled on brisk sales of “highly-anticipated sports and shooter games.”[10] EA earned $221 million, or 66 cents a share, in the three months that ended June 30. “That's up from earnings of $96 million, or 29 cents a share, in the same period a year earlier. Revenue rose 23 percent to $999 million from $815 million.”[11]

EA has moved into providing new digital gaming goods and services (including downloadable games, paid downloadable content, mobile games and social games), and revenue from digital sales this year “will likely total between $1.1 billion and $1.15 billion, representing a dramatic change in the company's business model.”[12] EA earned $833 million in digital revenue last year.[13]

EA’s earnings are marked by an ongoing difference between non-GAAP and GAAP accounting – which, for example, mandates deferrals of revenue related to services provided for online-enabled packaged goods and digital content. Consequently, EA’s quarterly reports reflect hundreds of millions of dollars which, under GAAP accounting, are deferred for a period of months – then appear in the earnings over multiple quarters subsequent to the original sale. Other companies with significant online revenues face similar issues. This can make it extremely difficult to understand the company’s GAAP profitability.

Currently, EA develops and publishes games under several labels including EA Sports titles, Madden NFL, FIFA Soccer, NHL, NCAA Football, SSX and NBA Jam. Other EA labels produce established franchises such as Battlefield, Need for Speed, The Sims, Medal of Honor, Command & Conquer, as well as newer franchises such as Dead Space, Mass Effect, Dragon Age, Army of Two and Star Wars: Knights of the Old Republic, produced in partnership with LucasArts.[14] EA also owns and operates major gaming studios in Tiburon in Orlando, Burnaby, Vancouver, Montreal and DICE in Sweden.[15]

Contents

History

1982–1991

In February 1982, Trip Hawkins arranged a meeting with Don Valentine of Sequoia Capital[16] to discuss financing his new venture, Amazin' Software. Valentine encouraged Hawkins to leave Apple Inc., 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 28 May 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.

Electronic Arts' original corporate logo, 1982–1999.

For more than seven months, Hawkins refined his Electronic Arts business plan. With aid from his first employee (with whom he worked in marketing 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, and a Stanford MBA classmate, Jeff Burton from Atari for international business development. The business plan was again refined in September and reissued on 8 October 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 buyers. 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 US$5 million in the first year and US$11 million the next.[citation needed] After yet more flyers were handed out, former CEO Larry Probst arrived as VP of Sales in late 1984 and helped the company sustain growth into US$18 million in its third full year. Handing out yet more flyers and 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.[citation needed] 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 December 1986 David Gardner and Mark Lewis moved to the UK to open a European headquarters. 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.[citation needed]

Most of the early employees of the company disliked the Amazin' Software name that Hawkins had originally chosen when he incorporated the company.[citation needed] While at Apple, Hawkins had enjoyed company offsite meetings at Pajaro Dunes and organized such a planning offsite for EA in October 1982. Following a long business day at the offsite, the dozen employees and advisers 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.[citation needed]

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. 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 advisers Andy Berlin, Jeff Goodby, and Rich Silverstein (who would soon form their own ad agency Goodby, Silverstein & Partners) 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.[citation needed]

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.[citation needed] 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.[citation needed]

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.

A novel approach to giving credit to its developers was one of EA's trademarks in its early days. This characterization was even further reinforced with EA's packaging of most of their games in the "album cover" pioneered by EA because Hawkins thought that a record album style would both save costs and convey an artistic feeling.[17] 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.[citation needed] The square "album cover" boxes (such as the covers for 1983's M.U.L.E. and Pinball Construction Set) were a popular packaging concept by Electronic Arts, which wanted to represent their developers as "rock stars".[17] After a very successful run on home computers, Electronic Arts later branched out and produced console games as well. Eventually Trip Hawkins left EA to found the now defunct 3DO company.

1991–2007

EA headquarters in Redwood Shores.

EA is currently headquartered in the Redwood Shores neighborhood of Redwood City, California. Following the retirement and departure of Trip Hawkins, Larry Probst took over the reins.

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. On February 1, 2006, Electronic Arts announced that it would cut worldwide staff by 5 percent.[18] On June 20, 2006 EA purchased Mythic Entertainment, who are finished making Warhammer Online.[19]

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.[20] The ESPN deal gave 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.[21]

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, NHL, NBA Live, Tiger Woods, etc.—with updated player rosters and small graphical and gameplay tweaks.[22] Recognizing the risk of franchise fatigue among consumers, EA announced in 2006 that it would concentrate more of its effort on creating new original intellectual property.[23]

In September 2006, Nokia and EA announced a partnership in which EA becomes an exclusive major supplier of mobile games to Nokia mobile devices through the Nokia Content Discoverer. In the beginning Nokia customers will be able to download seven EA titles, Tetris, Tetris Mania, The Sims 2, Doom, FIFA 06, Tiger Woods PGA Tour 06 and FIFA Streets 2 the holiday season in 2006. Rick Simonson is the executive vice president and director of Nokia and starting from 2006 is affiliated with John Riccitiello and are partners.[24]

2007

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.[citation needed] Riccitiello previously worked for Elevation Partners, Sara Lee and Pepsico. In June 2007, new CEO John Riccitiello announced that EA would reorganize itself into four labels, each with responsibility for its own product development and publishing (the city-state model). The goal of the reorganization was to empower the labels to operate more autonomously, streamline decision-making, increase creativity and quality, and get games into the market faster.[25] This reorganization came after years of consolidation and acquisition by EA of smaller studios, which some in the industry blamed for a decrease in quality of EA titles. In 2008, at the DICE Summit, Riccitiello called the earlier approach of "buy and assimilate" a mistake, often stripping smaller studios of its creative talent. Riccitiello said that the city-state model allows independent developers to remain autonomous to a large extent, and cited Maxis and BioWare as examples of studios thriving under the new structure.[26][27]

Also, in 2007, EA announced that it would be bringing some of its major titles to the Macintosh. EA has released Battlefield 2142, Command & Conquer: Tiberium Wars, Crysis, Harry Potter and the Order of the Phoenix, Madden NFL 08, Need for Speed: Carbon and Spore for the Mac. All of the new games have been developed for the Macintosh using Cider, a technology developed by TransGaming that enables Intel-based Macs to run Windows games inside a translation layer running on Mac OS X. They are not playable on PowerPC-based Macs.[28]

In October 2007, EA purchased Super Computer International, a long standing industry provider of game server hosting for development studios, who were currently developing the new Playlinc software. A week later they then purchased VG Holding Corp, the parent company of BioWare and Pandemic Studios.[29]

2008–present

It was revealed in February 2008 that Electronic Arts had made a takeover bid for rival game company Take-Two Interactive. After its initial offer of US$25 per share, all cash stock transaction offer was rejected by the Take-Two board, EA revised it to US$26 per share, a 64% premium over the previous day's closing price and made the offer known to the public.[30] Rumours had been floating around the Internet prior to the offer about Take-Two possibly being bought over by a bigger company, albeit with Viacom as the potential bidder.[31][32] In May 2008, EA announced that it will purchase the assets of Hands-On Mobile Korea, a South Korean mobile game developer and publisher. The company will become EA Mobile Korea.[33] In September 2008, EA dropped its buyout offer of Take-Two. No reason was given.[34]

As of Nov 6, 2008 it was confirmed that Electronic Arts is closing their Casual Label & merging it with their Hasbro partnership with The Sims Label.[35] EA also confirmed the departure of Kathy Vrabeck, who was given the position as former president of the EA Casual Division in May 2007. EA made this statement about the merger: "We've learned a lot about casual entertainment in the past two years, and found that casual gaming defies a single genre and demographic. With the retirement and departure of Kathy Vrabeck, EA is reorganizing to integrate casual games—development and marketing—into other divisions of our business. We are merging our Casual Studios, Hasbro partnership, and Casual marketing organization with The Sims Label to be a new Sims and Casual Label, where there is a deep compatibility in the product design, marketing and demographics. [...] In the days and weeks ahead, we will make further announcements on the reporting structure for the other businesses in the Casual Label including EA Mobile, Pogo, Media Sales and Online Casual Initiatives. Those businesses remain growth priorities for EA and deserve strong support in a group that will compliment their objectives."[36] This statement comes a week after EA announced it was laying off 6% about 600 of their staff positions & had a US$310 million net loss for the quarter.[37]

Due to the 2008 Economic Crisis, Electronic Arts had a poorer than expected 2008 holiday season, moving it in February 2009 to cut approximately 1100 jobs, which it said represented about 11% of its workforce. It will also close 12 facilities, yet to be identified. Riccitiello, in a conference call with reporters, stated that their poor performance in the fourth quarter was not due entirely to the poor economy, but also to the fact that they did not release any blockbuster titles in the quarter. In the quarter ending December 31, 2008, the company lost US$641 million. As of early May 2009, the subsidiary studio EA Redwood Shores was known as Visceral Games.[38][39] On June 24, 2009, EA announced it will merge two of its development studios, BioWare and Mythic into one single RPG and MMO development powerhouse. The move will actually place Mythic under control of BioWare as Ray Muzyka and Greg Zeschuk will be in direct control of the new entity. The actual impact of this merger remains to be seen.[40]

On November 9, 2009, EA announced its acquisition of social casual games developer Playfish for US$275 million.[41] On the same day, the company announced layoffs of 1500 employees, representing 17% of its workforce, across a number of studios including EA Tiburon, Visceral Games, Mythic and EA Black Box. Also affected were "projects and support activities" that, according to Chief Financial Officer Eric Brown "don't make economic sense",[42] resulting in the shutdown of popular communities such as Battlefield News and the EA Community Team. These layoffs also led to the complete shutdown of Pandemic Studios.[43]

In October 2010, EA announced the acquisition of UK based iPhone and iPad games publisher 'Chillingo' for US$20 million in cash. While Chillingo publishes the popular Angry Birds and Cut the Rope games, the deal did not include those properties.[44]

July 2011 EA Sports announced "To Dramatically Expand Austin Facility"..." EA Games President Frank Gibeau and EA SPORTS Chief Operating Officer Daryl Holt announced that EA SPORTS will be opening a new studio and adding hundreds of jobs right here in Austin, consistently recognized as one of the most inventive, creative, wired and rockin' cities in America...The new EA SPORTS studio in Austin will complement their existing studios in Tiburon, Florida and Burnaby, British Columbia."

Company structure

All of EA's labels and studios are overseen by CEO John Riccitiello who has held the position since 2007. Many have attributed Riccitiello's success in leading EA to his passion as a gamer.[45]

The following are the Electronic Arts labels, with the studios that fall under each label[46]

  • EA Games—Home to the largest number of studio and development teams, this label is responsible for action-adventure, role playing, racing and combat games, marketed under the EA brand. In addition to traditional packaged-goods games, EA Games also develops massively-multiplayer online role-playing games. Led by Frank Gibeau.
  • EA Sports—Publishes all the realistic, casual, and freestyle sports-based titles from EA, including FIFA Football, Madden NFL, Fight Night, NBA Live, NCAA Football, Cricket, NCAA March Madness, Tiger Woods PGA Tour, NHL Hockey, NASCAR and Rugby. Led by Andrew Wilson.
  • EA Play—Creates and publishes casual games for gamers and non-traditional gamers. Includes EA Hasbro and their UK based development studio Bright Light. EA Play also includes The Sims series developing and marketing life-simulation games and online communities, including those with "Sims" titles. Led by Rod Humble.[47]
    • Maxis
    • The Sims Studio
  • EA Interactive—Includes EA's Pogo.com online service, Playfish and EA Mobile. Led by Barry Cottle.[48]

Studios and subsidiaries

EA headquarters in Redwood City, California.

Current

  • BioWare in Edmonton, Alberta, Canada and Montreal, Quebec, Canada and Austin, Texas, founded in February 1995, acquired October 2007 from Elevation Partners.
  • Criterion Games in Guildford, England, founded as Criterion Software in 1993, acquired in August 2004.
  • Bright Light, in Guildford, Surrey, formerly EA UK [1]
  • EA Canada in Burnaby, British Columbia, started in January 1983.
  • EA Casual Entertainment
  • EA China in Shanghai, China
  • EA Deutschland in Cologne, Germany
  • EA Digital Illusions CE in Stockholm, Sweden
  • EA France in Lyon, France
  • EA Freestyle in San Francisco, California, founded as EA Sports BIG.
  • EIS (European Integration Studio) in Madrid, Spain
  • EA India, Noida, India
  • EA Brazil, São Paulo, Brazil
  • EA Korea in Seoul, South Korea, started in 1998.
  • EA Los Angeles in Los Angeles, California (includes Medal of Honor team, Danger Close), founded as DreamWorks Interactive LLC in 1995, acquired in 2000.
  • EA Romania in Bucharest, Romania, founded as JAMDAT Mobile Romania in 2005, acquired in 2006.
  • EA Russia in Moscow, Russia, translate in Russian
  • EA Mobile in Hyderabad, India
  • EA Mobile in São Paulo, Brazil
  • EA Montreal in Montreal, Quebec, Canada started in 2004.
  • EA North Carolina in Morrisville, North Carolina
  • EA Phenomic in Ingelheim, Germany, founded as Phenomic Game Development in 1997, acquired August 2006.
  • EA Salt Lake in Salt Lake City, Utah, founded as Headgate Studios, founded in 1992, acquired December 2006.
  • EA Singapore in Singapore [2]
  • EA Sports in Vancouver, Canada and Redwood City, California, publisher of EA's sports franchise games
  • EA Tiburon in Maitland, Florida, founded as Tiburon Entertainment in 1994, acquired in 1998.
  • Easy Studios in Stockholm, Sweden. Founded in 2008 developing PC games for EA's new Play4Free series.
  • Maxis in Emeryville, California Currently a label only.
  • Mythic Entertainment in Fairfax, Virginia, founded as Interworld Productions in 1995, acquired in June 2006.
  • North American Testing Center in Baton Rouge, Louisiana, opened in September 2008.
  • Playfish in London, England acquired in 2009.
  • PopCap Games in Seattle, Washington acquired in 2011.
  • EA Victory Games in Los Angeles, California and Austin, Texas and Shanghai, China; founded in 2010.
  • Visceral Games in Redwood City, California, also has offices in Montreal, Canada and Shanghai, China; founded as EA Redwood Shores in 1998.

Defunct

  • Original HQ in San Mateo, California, moved to Redwood City in 1998.
  • Origin Systems in Austin, Texas founded in 1983, acquired in 1992, closed in 2004.
  • Bullfrog Productions in Surrey, England, founded in 1987, acquired in 1995, merged with EA UK and effectively closed in 2001.
  • Black Box Games in Vancouver, British Columbia, founded in January 1983, acquired June 2002 merged with EA Canada.
  • EA Baltimore in Baltimore, Maryland, established in 1996 as part of Origin, closed in 2000
  • EA Seattle in Seattle, Washington, founded in 1982 as Manley & Associates, acquired January 29, 1996, closed in 2002
  • Maxis in Walnut Creek, California, founded in 1987, acquired in June 1997, folded into Redwood Shores in 2004
  • Westwood Studios in Las Vegas, Nevada, founded in 1987, acquired from Virgin Interactive Entertainment in August 1998, merged into EA Los Angeles in 2003.
  • EA Pacific (known for a time as Westwood Pacific) in Irvine, California, formerly part of Virgin Interactive, acquired with Westwood in 1998, closed in 2003
  • Kesmai (known also as GameStorm), founded in 1981, acquired in 1999, closed in 2001.
  • DICE Canada in London, Ontario, started in 1998, acquired DICE fully October 2, 2006; closed DICE Canada studio hours later.
  • EA Japan in Tokyo, Japan, closed due to consolidation; moved under EA Partners model
  • EA UK in Chertsey, United Kingdom, moved to EA UK in Guildford
  • EA Chicago in Hoffman Estates, Illinois, founded in 1990 as NuFX, acquired in 2004, closed November 6, 2007.
  • Pandemic Studios in Los Angeles, California and Brisbane, Queensland, Australia, founded in 1998, acquired October 2007 from Elevation Partners, closed November 17, 2009.

EA Partners Program

The EA Partners co-publishing arm is dedicated to publishing and distributing games developed by third-party developers. Notable publishing/distribution agreements include:

Criticism

Studio acquisition and management practices

During its period of fastest growth, EA was often criticized for buying smaller development studios primarily for their intellectual property assets, and then producing drastically changed games of their franchises. For example, Origin-produced Ultima VIII: Pagan and Ultima IX: Ascension were developed quickly under EA's ownership, over the protests of Ultima creator Richard Garriott,[52] and these two are widely considered[53] to be subpar compared to the rest of the series.[54][55]

In early 2008, current CEO John Riccitiello acknowledged that this practice by EA was wrong and that the company now gives acquired studios greater autonomy without "meddling" in their corporate culture.[26]

In 2008, John D. Carmack of id Software said that EA is no longer the "Evil Empire"[56] and decided to go with EA Partners, despite having a poor opinion of the publisher's past record.

"I'll admit that, if you asked me years ago, I still had thoughts that EA was the Evil Empire, the company that crushes the small studios...I'd have been surprised, if you told me a year ago that we'd end up with EA as a publisher. When we went out and talked to people, especially EA Partners people like Valve, we got almost uniformly positive responses from them."

Like other EA Partners, such as Harmonix/MTV Games, Carmack stressed that EA Partners deal "isn't really a publishing arrangement. Instead, they really offer a menu of services—Valve takes one set of things, Crytek takes a different set, and we're probably taking a third set".[56]

EA was criticized for shutting down some of its acquired studios after they released poorly performing games (for instance, Origin).[57] Though, in some of the cases, the shutdown was merely a reformation of teams working at different small studios into a single studio.[58][59] The historical pattern of poor sales and ratings of the first game shipped after acquisition suggests EA's control and direction as being primarily responsible for the game's failure rather than the studio. In the past, 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 and Bullfrog Productions had previously produced games attracting significant fanbases. Many fans also became annoyed that their favorite developers were closed down, but some developers, for example the EALA studio, have stated that they try to carry on the legacy of the old studio (Westwood Studios). Once EA received criticism from labor groups for its dismissals of large groups of employees during the closure of a studio. However, later, it was confirmed that layoffs were not heavily confined to one team or another, countering early rumors that the teams were specifically targeted—countering the implication that the under performance of certain games might have been the catalyst.[60]

EA was once criticized for the acquisition of 19.9 percent of shares of its competitor Ubisoft, a move that many felt would lead to a hostile takeover but has not yet materialized. However, Ubisoft CEO Yves Guillemot later indicated that a merger with EA was a possibility. "The first option for us is to manage our own company and grow it. The second option is to work with the movie industry, and the third is to merge," he said.[61] However in July 2010, EA elected to sell its reduced 15 percent share in Ubisoft[62] That share equated to roughly €94 million (US$122 million).[63]

EA was criticized in the media for its attempted hostile takeover of Take Two Interactive.[64]

Treatment of employees

In 2004, Electronic Arts was criticized for employees working extraordinarily long hours—up to 100 hours per week—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 behavior (at 6:30 p.m.)".[65] The company has since settled a class action lawsuit brought by game artists to compensate for unpaid overtime.[66] The class was awarded US$15.6 million. As a result, many of the lower-level developers (artists, programmers, producers, and designers) are now working at an hourly rate. A similar suit brought by programmers was settled for US$14.9 million.[67]

Since these criticisms first aired, it's been reported that EA has taken steps to positively address work-life balance concerns by focusing on long-term project planning, compensation, and communication with employees. These efforts accelerated with the arrival of John Riccitiello as CEO in February 2007. In December 2007, an internal EA employee survey showed a 13% increase in employee morale and a 21% jump in management recognition over a three year period.[68]

In May 2008, 'EA_Spouse' blog author Erin Hoffman, speaking to videogame industry news site Gamasutra, stated that EA had made significant progress, but may now be falling into old patterns again. Hoffman said that "I think EA is tremendously reformed, having made some real strong efforts to get the right people into their human resources department," and "I've been hearing from people who have gotten overtime pay there and I think that makes a great deal of difference. In fact, I've actually recommended to a few people I know to apply for jobs there," but also claims that she's begun to hear "horror stories" once again.[69]

Game quality

For 2006, the games review aggregation site Metacritic 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-Two Interactive (publishing as 2K Games and Rockstar Games) at 70.3. The remaining top 10[70] publishers (Sega, Konami, THQ, Ubisoft, Activision) all rate in the mid 60s. Since 2005 EA has published five games, Battlefield 2, Crysis, Rock Band, Mass Effect 2, and Dragon Age: Origins that received Universal Acclaim (Metacritic score 90 or greater).

EA's aggregate review performance had shown a downward trend in quality over recent years and was expected to affect market shares during competitive seasons. Pacific Crest Securities analyst Evan Wilson had said, "Poor reviews and quality are beginning to tarnish the EA brand. According to our ongoing survey of GameRankings.com aggregated review data, Electronic Arts' overall game quality continues to fall...Although market share has not declined dramatically to date, in years such as 2007, which promises to have tremendous competition, it seems likely if quality does not improve."[71][72]

EA had also received criticism for developing games that lack innovation vis-à-vis the number of gaming titles produced under the EA brand that show a history of yearly updates, particularly in their sporting franchises. These typically retail as new games at full market price and feature only updated team rosters in addition to incremental changes to game mechanics, the user interface, and graphics. One critique compared EA to companies like Ubisoft and concluded that EA's innovation in new and old IPs "Crawls along at a snail's pace,"[73] while even the company's own CEO, John Riccitiello, acknowledged the lack of innovation seen in the industry generally, saying, "We're boring people to death and making games that are harder and harder to play. For the most part, the industry has been rinse-and-repeat. There's been lots of product that looked like last year's product, that looked a lot like the year before." EA has announced that it is turning its attention to creating new game IPs in order to stem this trend, with recently acquired and critically acclaimed studios BioWare and Pandemic would be contributing to this process.[74][75]

Anti-trust lawsuit

On June 5, 2008, a lawsuit was filed in Oakland, California alleging Electronic Arts is breaking United States anti-trust laws by signing exclusive contracts with the NFL Players Association, the NCAA and Arena Football League, to use players' names, likenesses and team logos. This keeps other companies from being able to sign the same agreements. The suit further accuses EA of raising the price of games associated with these licenses as a result of this action.[76] However, in an interview with GameTap, Peter Moore claims it was the NFL that sought the deal. "To be clear, the NFL was the entity that wanted the exclusive relationship. EA bid, as did a number of other companies, for the exclusive relationship," Moore explained. "It wasn't on our behest that this went exclusive... We bid and we were very fortunate and lucky and delighted to be the winning licensee."[77] More recently, EA has been sued by former NCAA players for allegedly using their images without compensation.[78]

EULA agreements and DRM

In the September 2008 release of EA's game Spore it was revealed that the DRM scheme included a program called SecuROM and a lifetime machine-activation limit of three (3) instances. A huge public outcry over this DRM scheme broke out over the Internet and swarmed Amazon.com with one-star ratings and critical reviews of the game in order to get EA to "pay attention to their consumers".[79] This DRM scheme, which was intended to hinder the efforts of pirates to illegally use and distribute EA software, instead mainly affected paying customers, as the game itself was pirated well before release.[80] On September 13, 2008, it was announced that Spore was the most pirated game ever with over half a million illegal downloads within the first week of release.[81] In response to customer reaction, EA officially announced its release of upcoming Command & Conquer: Red Alert 3 would increase the installation limit to 5 rather than 3.[82] Many customers were still unsatisfied, claiming they were still renting the game at full price.

On September 22, 2008, a global class action law suit was filed against EA regarding the DRM in Spore, complaining about EA not disclosing the existence of SecuROM from the game manual, and addresses how SecuROM runs with the nature of a rootkit, including how it remains on the hard drive even after Spore is uninstalled.[83][84][85] On October 14, 2008, a similar class action lawsuit was filed against EA for the inclusion of DRM software in the free demo version of the Creature Creator.[86]

On March 31, 2009, EA released a "De-Authorization Management Tool" that allows customers who have installed games containing the SecuROM activation scheme to "de-authorize" a computer, freeing up one of the five machine "slots" to be used on another machine.[87]

On June 24, 2009, EA announced and formalized a change in its approach to preventing piracy of PC games. The company plans to drop all DRM from its games, replacing it with a traditional CD-key check. However, games will include content that is not present on the disc, requiring a download during the activation of the game. The intent is to create an incentive to buy a legitimate copy of the game. A general policy has been laid out with plans envisioning games more as services with a lot of content to freely download or buy linked to the game, some goodies and regular updates as a way to coax players to use the genuine copies of EA games.[88]

Sexism and ageism in advertising

EA's advertising campaign for Dead Space 2 was decried as sexist and ageist, with gamers claiming that it reinforcing out-dated stereotypes against female and older gamers.[89][90] The game is rated M for Mature, and is therefore only recommended for players over the age of seventeen. Others thought the advertisements were pointless and would hurt market share.[91] "The video game's campaign hinges on a unique premise – one that ignores how much the culture of gaming has changed."[92] As of 2010, 40% of console-only gamers were women and the average game player was 34 years old.[93]

For the advertising campaign, 200 women were selected for their conservative values and lack of familiarity with video games. Their reactions to a screening of the game were featured in EA's web and TV advertisements with the campaign slogan "Your mom hates Dead Space 2."[94]

On February 24, 2011, the Extra Credits team of The Escapist published 'An Open Letter to EA Marketing' in their weekly video column, denouncing Electronic Arts' marketing decisions for the Dante's Inferno, Medal of Honor and Dead Space 2 releases. They argue that EA's decisions to hire fake protesters and market games solely on shock value, while neglecting to defend the Medal of Honor on a 1st Amendment basis for letting the player play as the Taliban, have been hurtful to the gaming industry. They also argue that the advertisements are counterproductive to Electronic Arts' wishes to elevate games to an art medium as demonstrated in the 1980s Electronic Arts ad 'Can a Computer Make You Cry?'.[95][96]

Games

Notable games published

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.

Electronic Arts also published a number of non-game titles. The most popular of these 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. Other non-game titles include Music Construction Set (and Deluxe Music Construction Set), Deluxe Paint Animation and Instant Music. EA also published a black and white animation tool called Studio/1, and a series of Paint titles on the Macintosh: Studio/8 and Studio/32 (1990).

Games in development

2011 release

2012 release

TBA

Logos

The Electronic Arts logo has undergone few changes in the company's history. EA's classic Square/Circle/Triangle corporate logo, adopted shortly after its founding and phased out in 1999, was devised by Barry Deutsch of Steinhilber Deutsch and Gard design firm. The three shapes were meant to stand for the "basic alphabet of graphic design." The shapes were rasterized to connote technology. Many customers mistook the square/circle/triangle logo for a stylized "EOA." Though they thought the "E" stood for "Electronic" and "A" for "Arts", they had no idea what the "O" could stand for, except perhaps the o in "Electronic." An early newsletter of EA, Farther, even jokingly discussed the topic in one issue, claiming that the square and triangle indeed stood for "E" and "A", but that the circle was merely "a Nerf ball that got stuck in a floppy drive and has been popping up on our splash screens ever since." Other customers saw the logo as a stylized "ECA". The circle may have been put in to separate the E and the A.

Nancy Fong and Bing Gordon came up with the idea to hide the three shapes on the cover of every game, borrowing the idea from the urban legends concerning the placement of the bunny symbols on the covers of Playboy magazine. Finding the logo's hidden placement on early EA titles was a ritual for employees whenever a new cover was displayed outside Fong's cubicle. In December 1986 David Gardner and Mark Lewis moved to the UK to open a European headquarters. 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.

The current EA logo was derived from the logo used by sub-brand EA Sports. It was first used, in a different form, in 1988, when Electronic Arts introduced the "EASN" brand (later changed to "EA Sports" due to legal difficulties with ESPN. The logo was modified and adopted company-wide around 1999.

The in-game logo introduction has changed several times since the inception of Electronic Arts. In late-1990s to 2001, Originally an explosion sound effect accompanying the letters for "Electronic Arts" flying into formation, followed by an electronic voice. The sound effects have changed in certain games (sounds of the letters whipping past, for example). In 1999 to 2003, An outlined circle flips and forms the modern EA Games logo. Accompanied by a synthesized ping sound. In 2002 to 2004, EA Games logo appearing on screen, accompanied by a very loud voice saying "EA Games" followed by a whisper saying "challenge everything". In 2005, Silver EA logo appearing then fading away. *2006 to present: The logo is different with every game, taking on certain visual aspects of the game it is presented with. However the EA letters always remain the same and the logo always remains a circle.

The company's slogan has changed several times since the company's inception. Initially, it was "We see farther." – Founding tag line, then "EA Games, challenge everything.", then "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 Sports, it's in the game" is spoken by Andrew Anthony.

See also


References

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