Electronic Arts: The Blockbuster Strategy


Read:

1) How Pixar Fosters Collective Creativity

2) Electronic Arts: The Blockbuster Strategy

3) Basic Quantitative Analysis for Marketing

Description:

The case describes the process that Electronic Arts employs to allocate resources to new product development projects. Examines whether the firm can sustain its competitive advantage given its existing game design process.


Questions:

1) What business is EA in and how has it changed since the founding of the company in 1982?

2) What are the competitive forces in video game industry today?

3) How do you see them changing in the future?

4)  What is EA's core competence and how defensible is it?

5) What are the strategic activities used by EA to create a hit game? Rank them in order of importance?

6)  What is EA’s cost model (i.e. the approximate cost of R&D, Marketing, Cost of Goods Sold (COGS), and Profits as a percentage of Revenue)?

7) How many games does EA need to sell to break-even on a new title?  For EA’s revenue per game, assume that EA receives only 50% of the retail price paid by             consumers. (The other 50% goes to the retailer in exchange for providing a place for the customer to purchase the game and often service and support.)

8)  Describe and critique EA’s development process.  Which factors are most important? What are the risks?

9)  Contrast PIXAR and EA in terms of their management of talent, their development processes, and their corporate cultures.

10) What action plan do you recommend EA implement to continue churning out blockbuster hits and why?