Arts or better known yet as (EAI) is known as one of the biggest gaming development companies still around today. Electronic Arts is the organization in which develops markets and distributes the so called EAI games. The man behind Electronic Arts Inc is Trip Hawkins who hired designers and programmers to develop EAI games as early as 1982. During that time, the company developed only home computing games that laid the foundation of today’s EAI games which include the Battlefield series and Need for Speed.
EAI essentially had a smooth run to become a successful video game business compared to other companies such as Activation who struggled in the beginning. EAI today is still one of the biggest successful gaming companies out today nearing 5 billion USED in revenue with the help of their EAI sports division which has a huge fan base and also their Battle Field franchise which was a huge success also helped acquire their income. Activation Inc, one of the most famous game development companies alongside EAI was founded in 1979 by Howard Marks.
In 1983 Activation capitalized on its gratitude by going public. Yet suffering, elated to the fate suffered by Atari was unfortunately down the road. Resulting the old saying of beating the competition by Joining it, Activation acquired Inform in 1987. By the beginning of the asses, the Activation name was about to be revived. For fiscal year 1999 Activation was indeed on a roll with year-end revenues rocketing 40 percent to $436. 5 million, with net income leaping to $15. 3 million from the previous year’s $5. 1 million, a whopping 197 percent increase which is a huge accomplishment for them.
North American operations in 1999 amplified from the previous fiscal year’s 4 percent to 34 percent of revenues while international revenues fell faintly from assess 71 percent to assess 66 percent. Activation today still remains in top shape with its current revenue nearing USED 5 billion dollars with the help of one of their biggest franchises the Call Of Duty Series. 1) How might SOOT analysis have helped Electronic Arts assess its slippage in the video-game market? The way in which EAI could have used SOOT analysis is by going step by step and going over the strengths, weaknesses, opportunities and threats.
Strengths: If EAI utilized their strengths and used it against the competition sugarless of how much more successful they are to the other companies they would ultimately not of had the drop in which they countered. To succeed in the video game industries one must listen to the gamers, accept feedback and learn from their mistakes. When companies act in ways that consumers do not approve of numbers will show and the news will more or less be bad news. Weaknesses: EAI should evaluate its weaknesses to overcome them. When a company recognizes what’s not working to contribute the company it should be revised and fixed.
If weaknesses are present and known and not acted upon that will essentially dead too non-successful business. Opportunities: E ‘s opportunities should almost always be assessed and thought through. With being a big game developing company their opportunities should always be to make the greatest game possible that’s better than the competition and gain fan loyalty towards electronic arts produced games like franchises such as Battle Field which is one of the greatest first person shooters ever created and has a great fan base.
Threats: Sea’s biggest threat at the time and also present time is Activation. When overlooking threats EAI should’ve looked at how will we (EAI) create a game bigger and utter than our competition to gain fan loyalty and ultimately build a great game that will be played for years to come 2) How might Porter’s generic strategies theory help to explain why Electronic Arts lost its leadership in the video game market to Activation Blizzard? EAI Games directly competes with several different competitors but one in particular is Activation Blizzard Entertainment.
Rivalry intensifies among these firms because many employ new ideas to appeal to different segments and boost market standing in these areas, there is zero to low exchanging costs, the diversity of competitors from round the globe drives new creative gaming, and the number of competitors that are equal in size and capability to EAI has increased. EAI has made rough decisions to try and make things work while Activation improved their direction to overtake the lead in the video game industry.
Rivalry among these firms is weakened because the market is fast-growing, the number of firms is great thus diminishing the effect of strong competitive moves, and the product-lines are highly differentiated and appeal to a variety of diverse segments. Porters strategy simply states “An organization that reuse a differentiation strategy seeks to distinguish itself from competitors through the quality of its products or services” (Griffin 211).
EAI competes with Activation with video games on the basis of differentiation where it shows how Sea’s loss of interest of their video game development gained the popularity of Activation as they went along to gain leadership in the video game development world. 3) How would you use the Miles and Snow typology theory to advise Activation Blizzard on the best way to maintain its leadership in the video-game market? Miles and Snow argued that companies develop their adaptive strategies based on their perception of their environments.
It’s broken down into three parts of strategies. The first being Prospector which helps seek new market opportunities, the second which is the defender strategy which implements a strategy to defend its market and last but not least the analyzer strategy which helps maintain its current business. If Activation utilized the prospector strategy it will constantly seek out new markets and new opportunities and is oriented toward growth and risk. For example “Amazon. M follows a prospector strategy as it constantly seeks new market opportunities for selling different kinds of products through its websites” (Griffin 213), Amazon today is known as one of the biggest online retailers in history of online retailers. It Activation utilizes this strategy, indeed they would maintain leadership in the gaming industry. If Activation focuses on the defender strategy, they would concentrate more on protecting its current markets, maintaining stable growth, and serving current customers, generally by lowering its costs and improving the performance of its existing products.
While Activation should try other ideas to help the company grow, they should always maintain their core business strengths that will always help the company no matter what. 4) If you ran a small video-game start-up what would be your strategy for competing with EAI and Activation Blizzard? First and foremost I would utilize the SOOT analysis to differentiate myself from the two companies to help me own a more successful company than both EAI and Activation. When it comes to video games there are a variety of different types of games, shooters, Ammo’s, open world game, etc.
Creating video games is not an easy process and can take some serious time. It’s also a game creating these games because a lot of games most know don’t succeed when it comes to sales and leaves the company wondering whether they should still continue on to create those games. By using SOOT and breaking it down with first strategy I would essentially lay out a blue print of my company and map out different parts of the company and group developers on what they prefer to create to generate great ideas. I would also view what my competitors are creating and go above and beyond that.
Organizational Weaknesses are skills and capabilities that do not enable organizations to choose and implement strategies that support its vision (Griffin 2010). Even though it’s difficult to come up with weaknesses, if I were to develop a game company to compete and to ultimately conquer analyzing the weaknesses is essential to correct anything that needs to be corrected in order to facilitate a future successful gaming company. If there are things that need will help drain the company down than they need to be addressed. Opportunities are important because if not taken into inconsideration opportunities will longer be available.
Seeking ones opportunity should be taken into advantage because it will help a company succeed. If there are opportunities to develop an amazing game that would ultimately out sell the competitors, there’s no doubt about it to go ahead and seize the opportunity. Activation and EAI would be my threats and would be analyzed as to what they have created that they have gained many fans on. I would create games that gamers want, open blobs to take input on what the gamers want to create that perfect game that ill in the long run out sell anything my threats create.
Fan loyalty is key when creating fans like how EAI has battlefield loyal fans and Activation’s Call Of Duty has a great deal of fans. I would get together with my developers to create the greatest of all games to eliminate my threats. 5) If you’re a gamer, what aspects of Activation’s strategy have led to your playing more (fewer) fewer of its games? As a gamer, Activation in most ways have done a great Job when it comes to creating games. When they published the Call tot Duty series I instantly became descanted tit the franchise because of how Call of Duty transformed the shooter genre for the better.
But, as time went on the sequels to these games began to seem repetitive and not interested anymore and made it seem since the company flourished on the past Call of Duties that they almost in a sense got lazy creating the sequels. Sea’s battlefield franchise is Activation’s Call of Duty biggest competitor and at the beginning Activation was greatly in charge of the first person shooter genre until Sea’s battlefield sequels have greatly improved blowing out the Call of Duty series. As of right now, Activation’s decisions about all of their new games coming out are repetitive and have no innovation nor bring creativity to the plate.
As you may know the next generation consoles will be available later this year 2013 and the lineup for Activation is sad to say but weak compared to EAI. Not only does EAI have their great deal of shooter genre but their sport games are amazing and have such a huge fan base compared to other sport game companies. Activation needs to reevaluate their games and see what else they can bring to the table and create a whole new IP start from scratch ND create the greatest game possible to gain their fans back.
Activation publishes all the movie games that end up being a total destruction game and sales wise. Conclusion As a gamer this case study was indeed fascinating and grabbed my attention almost instant. As a fan of both Electronic Arts and Activation it was great learning about their history and their come up to gaming fame. With all the competition out there in the game development world being the top game developing companies must be a great accomplishment. Both companies had its ups and downs sales wise and created good and also bad games.
Activation’s success over EAI was indeed overwhelming because of how they showed leadership and creativity of their games which earned them a great deal of fans that are willing to purchase their games. Even though both companies are doing well with well over 1 billion dollars of total net income there are some flaws as gamer that I would like corrected. Beginning with EAI there was an issue where there newly released games were being required to purchase an “online code” to be eligible to play online with people only when the game is first purchased brand new that code is available.
For people out there like myself whom purchase used games because of it being cheaper when one would try and play online EAI was charging 1 5$ do purchase that code which was revolting. Immediately when EAI began to send the idea out with its games, gamers everywhere petitioned that EAI stop the idea in which ultimately led to EAI having no choice to eliminate because of sales dropping almost ten percent. Activation on the other hand did not charge more money for its services but essentially began being repetitive with their games. There present games have no innovation, creativity and the same chances as their past games.