Porter's Five Forces Applied to Electronic Arts Essay

Consider the situation faced by Nintendo, the oldest video-game company in the world. The company had positioned its line of developing good games for all age stages and strongly opposed to violence and pornography. In 1985, shortly after the company’s introduction of Nintendo Entertainment System to the United States, Nintendo met its match when Japanese entertainment giant Sony and American tech behemoth Microsoft entered the field with the PlayStation and Xbox.

As is the case with the music industry, one of the biggest shifts to happen in the Videogames industry is the increase in accessibility of the tools and knowledge required to both develop and release videogames. This has given rise to the ‘Indie’ game movement, which consists of studios that are usually self-funded, have very few people working as staff and have the goal of successfully creating and releasing videogames without the need for financial help from any of the established videogame publishers. As a result of this, there is now an increase in demand for people working in videogame development.

With the competition in the video games industry getting more intense, the next steps of the video game companies become more crucial for their positioning on the market. Due to the low product differentiation, the next market leader will be the platform provider that manages to offer an innovative gaming experience and a wider population of buyers that include all demographics. Although the industry is being totally dominated by Nintendo’s console, the industry is still considered to show a

While for years Nintendo dominated the market for virtual gaming, a rise in competition presented serious challenges for the company. After struggling for the first five years of the new millennia, Nintendo made an exceptional comeback with its innovative products, the Wii and the DS that shook the market and brought in a completely new set of customers. Their new strategy was so successful it allowed the company to become Japan’s second most valuable business after Toyota (Farhoomand, 2009).

Atari pioneered the video game industry in 1971 with a title called Pong, which was sold as an arcade game for $1,200 each. The console market did not take off until 1977, when Atari 2600 was launched (Lipson, 2009) and this became the first generation of consoles. In the videogame industry, consoles are primarily stationary “boxes”, which require a monitor or television set for use. Known as consoles or platforms, these devices are standardized computers tailored for gaming and produced by a single firm. The term “generations” is meant to define “chapters” in the industry denoted by a series of console launches with significant technology improvement compared to the previous launches (Exhibit 1).

Sometimes it seems like the computer game industry is dying, crushed to death by its own bulk. Every year more and more gaming companies get gobbled up into huge conglomerates like Electronic Arts, companies that mostly put out trash that is technically and visually impressive, but devoid of concept and content. However, there are some small gaming companies that buck the trend. While mostly just small groups of programmers and artists, some are huge unions of fans who, irritated with the dropping quality of computer games, have decided to use the power of the internet to get together and to produce games tailor-made to their personal preferences.

Video games have been around for the past 45 years and have been enjoyed by millions of Americans and people across the world. It all began with a console named Atari that offered a very simple tennis game. The game had no characters and no story line, just a black screen with two lines and a dot that a player can move up and down and enjoy with their friends to kill a quick 30 minutes. Now, we have various types of consoles available on the market that offer a variety of complex games that include characters, story lines, missions and improved graphics.

In the early 1980s, videogames’ popularity grew at a staggering rate as people saw the rising potential of the medium to fulfill their needs (more on that later). However, many businesses also saw the

The video game industry (formally referred to as interactive entertainment) is the economic sector involved with the development, marketing and sale of video and computer games. It includes video game consoles, game software, handheld devices, mobile games and online games. The video gaming industry has been growing exponentially in recent years. The growth is expected to leap-frog in the future.

Video games have been around for many years and have slowly developed into a common hobby for many young adults. In fact, more than 1.2 billion people are playing video games worldwide. The original gaming console by Magnavox has evolved tremendously over the last decade and has been developed by many different companies. Although there is an innumerable amount of consoles in the world, two iconic consoles are the Microsoft’s XBOX 360 and the Nintendo’s Wii. The XBOX 360 and Wii are two very popular gaming consoles that are different in appearance, the applications and services they provide, and the amount of games and accessories they each have available.

Video games have been around since the 40’s, reaching its popularity from the mass mainstream crowds by the 70’s. Back to the simpler times where there were less pixels and control buttons. Back to the games that didn’t have storylines – no police chases, zombie apocalypses or saving any princesses. Which were what video game creators and fans wanted as time progressed. More games, more visuals and graphics, more dimension, more realism. Thru the years, video games have evolved and expanded greatly due to more imaginative and creative ideas being developed and thru the constant technological improvements there is a huge advancement compared to the games that first came out 40 years ago.

Electronic Arts or better known yet as (EA) 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 EA games. The man behind Electronic Arts Inc is Trip Hawkins who hired designers and programmers to develop EA games as early as 1982. During that time, the company developed only home computing games that laid the foundation of today’s EA games which include the Battlefield series and Need for Speed. EA essentially had a smooth run to become a successful video game business compared to other companies such as Activision who struggled in the beginning. EA today is still one of the biggest successful gaming companies

Scoffed at by many during its infancy, the global video gaming industry has become a multi-billion dollar enterprise today that promises continued strong growth in the future. With several platforms and thousands of game titles available in hundreds of languages, video gaming systems are increasingly popular among young and old players alike. Although uptake patterns continue to shift among major target countries, video game demand, particularly online gaming, remains strong in countries such as South Korea. The objective of this report was to identify a country in Asia that would be a favorable market for a product launch from Krome Studios, currently Australia's largest video game developer. Krome Studios has a proven track record of success that makes it especially well situated to expand its international operations into a growth market such as South Korea. In this regard, the results of the research showed that South Korea represents the most favorable target country at present for Krome's business goals and recommendations are provided in support of this initiative.

Over the years, corporations in the video game industry revolutionized the concept of consoles and videogames through strides of innovation. The videogame entertainment industry is highly competitive and is largely driven by creativity in the products being created. All throughout the 1980s and 1990s, Nintendo redefined entertainment through its innovative consoles and videogames. The company had skyrocketing sales. However, as new entrants such as Sony and Microsoft entered the market, Nintendo was exposed to severe competition. As a result, their sales and profitability started to plummet as the years progressed. Despite the shifts and changes in technology and forms of entertainment, Nintendo is adamant about sticking to its videogame strategy. In order for Nintendo to survive after the emergence of this technological substitution and be active competitor in the market, the company should license its popular games for use on smartphones and tablets.

The main obstacle facing a start-up video game console company from entering the industry is saturation of the market from the larger video game console makers or the “big three” Nintendo, Microsoft, and Sony. The big three tend to release new game consoles around the same time frame and compete head to head for sales. During the time frame it is impossible for a new entry to jump into the fray. 2010 was a banner year for video console sales Sony’s PS3 sold 14 million units followed by Microsoft’s Xbox 360 13 million and surprisingly Nintendo’s Wii led the big three selling 17 million units. After the 2010 release of all three consoles sales started to decline for each company. Nintendo took the largest sales loss at 72% in 2013 only 747,000 were sold compared