EA: Still in the Game?

Sean Sands | 8 Aug 2007 17:00
Op-Ed - RSS 2.0

Every good story needs a villain, and while the PR department at Electronic Arts would bristle at the idea of being portrayed as the antagonist in some haphazard metaphor of the videogame industry, you can't be the big-dog without turning a few dirty tricks. The gaming landscape is too often described as one that would better if EA hadn't bought up half the acreage and filled it with disposable townhouses. But is the king of the hill ready to be toppled?

In 2006, Electronic Arts generated nearly $3 billion in revenue, accounting for roughly one-third of the entire gaming industry. With that in mind, a world without EA isn't easy to fathom. But 2007 has been less stellar for the company, with Activision exceeding EA's revenue for the first half of the year on the back of Guitar Hero and movie tie-ins. This draws a comparison to General Motors, which also this year fell from its long perch as a defining industry leader.

Of course, Madden doesn't come out in the first half of the year, and that crucial property is coming off its own record-breaking 2006 release. Conceding the first half of the year certainly wasn't in EA's playbook, but losing the year entirely is practically unimaginable for the Redwood City-based publisher.

And EA has an uncanny ability to subvert even the strongest competing franchises. The buzz on Rock Band is it's a Guitar Hero 3 killer. EA's ability to strangle competition has earned the company no shortage of ire, most famously illustrated when it secured exclusive rights to the NFL teams and logos, effectively pushing 2K out of the market. But a little negative press among the hardcore gaming base doesn't change the fact EA now enjoys a monopoly making games based on the most popular sport in America.

And EA seems content in the mindset. Commenting on the release of All Pro Football 2K8, new EA CEO John Riccitiello said EA intended to ensure the 2K game was merely a blip and not repeatable. That strategy doesn't win friends, but it sure influences the bottom line.

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