May 1982. Electronic Arts founded by Trip Hawkins and a group of friends, mostly with a background in marketing (Bing Gordon, Andy Berlin, and others). Founded as Amazin' Software. Wanted better name, first settling on SoftArt, which was taken. The next choice was Electronic Arists. This was modeled after United Artists Pictures. UA was known as "the company built by the stars," having been established in 1919 by Charlie Chaplin, Mary Pickford, Douglas Fairbanks, and D.W. Griffith. By the 1930s, UA was known as Hollywood's artist studio.

The key concept of UA was independent production. The company sought to offer artistic freedom to filmmakers as the authors of their films. UA itself was more of a distribution company than an assemblage of production facilities and soundstages, unlike the other major Hollywood studios. Not until the 1940s did other studios branch out extensively into independent production. Such illustrious producers as Gloria Swanson, Samuel Goldwyn, Howard Hughes, Walt Disney, and Darryl Zanuck signed with United Artists. Today it a unit of MGM.

However, Electronic Artists implied that the company consisted of digital artists. In October, 1982, it became Electronic Arts. It was incorporated in 1989.

Venture capital support came from the major VCs in Silicon Valley: Don Valentine at Sequoia Capital; Kleiner, Perkins, Caulfield, etc., and later from A&M Records and even Steve Wozniak.

The first four products were released in May, 1983: Pinball Construction Set, Hard Hat Mack, Archon, and M.U.L.E.

The company had its first profitable month in December, 1983, fueled largely by Music Construction Set and Dr. J. and Larry Bird Go One on One.

By the end of 1984: 50 employees, sales reached $6 mill/pa.

The elements:

* The designer as star. This was not an original idea with EA. Sierra On-Line (1982), founded in 1980 as On-Line Systems by Ken and Roberta Williams, treated designers lavishly, with lavish pay and publicity. Sierra compared them to rock stars. Sierra started out by making home versions for home PCs (Commodore, Apple, Atari) of popular arcade games. Its Mystery House, written by Roberta Williams and published in 1980, was probably the first graphical adventure game. Titles included the King's Quest and Leisure Suit Larry series.

Budge was the first to be signed, in Dec. 1982. He was a well-known software designer, with a reputation for artistic graphics. His company, BudgeCo, had published the first simulation of a pinball machine, RasterBlaster, for the Apple II, in 1981."Raster Blaster was also an Apple II game. I did it in my spare time while working as a graphics engineer at Apple Computer. I had seen an arcade pinball, and had learned enough about hi-resolution graphics to realize that a very nice simulation could be done on the Apple. For the first couple of weeks, I built the basic simulation and built a board database by hand. Nobody quite understood what I was doing. Then one night I got the ball bouncing around on the board and it became apparent how cool it would look (by 1981 standards at least) I got the rest going pretty quickly." Source: The Tower of Pin website, from interview with Bill Budge.

Artistry in Electronic Gaming
The "star" system pays off
By David Duberman

ANTIC VOL. 2, NO. 6 / SEPTEMBER 1983 / PAGE 63
Electronic Arts, a visionary new company in San Mateo, California, has introduced a line of software that could quite possibly change the history of computer gaming. Archon, Murder on the Zinderneuf, Pinball Construction Set, M.U.L.E., and WORMS? are five of the most original and innovative programs that have been produced under the heading of entertainment for any home computer. Indeed, they could be the forerunners of future software that will be more than entertainment.
Electronic Arts is deliberately emulating the music recording industry in producing and marketing its computer software. It is building a "star" system of programmers for whom the best development tools and supporting staff will be provided. Even the packaging is similar. Each game comes in its own handsome, three-panel, cardboard jacket. Everything about these programs attests to thorough professionalism

Budge had tired of running his own company, to EA took care of marketing, packaging and distribution, paying Budge to go on a promotional tour. He was given top billling as designer.

* sports licensing and celebrities. Started in 1983 with Julius Erving and Larry Bird. By the late 1980s, dozens of athletes and celebrities (experts and such, like Chuck Yeager--Chuck Yeager's Advanced Flight Trainer--or Timothy Leary--Mind Mirror) were signed up, and at one time EA was one of the largest licensors of sports personalities. John Madden. FIFA. The relationship with John Madden began in 1986. The game first shipped in 1988, with extensive input from Madden about the feel of the game, use of the playbook, etc. Although it initially released for the Apple II, C64 and IBM PC, Madden Football drove EA more solidly into the videogame market. It was one of the first EA games ported to the Sega Genesis in 1990. Scott Orr was the designer. Bing Gordon came up with the idea of sequels. "EA Sports" became the company's strongest brand.

* packaging. Album covers. Games produced on diskettes, not cartridges, for C64, Atari, etc. The delightful cover for Pinball Construction Set was one of the elements that had attracted Budge. The use of floppy disks allowed for more variety and complexity in game play, but they also made the innovative cover design possible. The cover looked like a smallish LP jacket, with a glossy cover offering color graphics. Manuals were inserted inside. This was a leap beyond the packaging then common--baggies hung from a hooks on a stand or peg-board wall. These became an industry standard until CD jewel cases and boxes.

* producer model. Producers such as Stewart Bonn (Skyfox) filled a function similar to that of a movie producer, hiring the graphic artists, programmers, writers, musicians, etc. Controlled the budget and schedule.

* control of a distribution network. EA sidestepped the existing system of small, third-party and mostly regional distributors. EA created its own national network of regional offices and worked directly with software stores. Its software fulfillment group worked to insure the stores remained satisfied. EA had its own sales force, handled the distribution pipeline, and thus improved margins.

* videogames. Reverse engineering of Sega Genesis. EA had avoided NES, remembering the crash of Atari and the rest of the business in 1983. Moreover, Trip Hawkins especially disliked Nintendo's strict licensing requirements. In 1989, Sega released the 16-bit Genesis. An engineer at EA, Monty Finefrock, led an EA team that reverse engineered the Genesis almost immediately in a cleanroom. At the 1990 Consumer Electronics Show (CES), Hawkins informed Sega that EA had done this and would release a suite of games for the machine. The bold move paid off, as EA received excellent terms from Sega, so that they were able to launch with splashy games such as Peter Molyneux's Populous. These showed the Genesis off favorably, benefiting both companies. Sales took off. By 1993, Sega-related sales surpassed EA's computer-related sales and led a strong surge in profits (also benefiting Sega).

Some of EA's original strategies were:

Publish the best games from independent "software artists" like Bill Budge, Ozark Softscape and Free Fall Associates.
Distribute directly to retailers and cut out the distributor middlemen.
Develop on leading edge technology. EA published on floppy disks only at this time while other companies still supported cartridges and cassettes .
Build a company brand name to stand for quality.
All employees would act like owners and get stock options

After establishing itself in the industry, EA management continued to strive for higher goals. The company continued to partner with the best studios to create the best games, and it also made its first game created entirely in-house (Skate or Die). The company also began to expand internationally, opening an office in Great Britain. As EA continued to grow, company leaders set the goal of becoming the world leader in the video game industry. As one means of assuring high-quality products, EA made it a practice to get expert input into its games. By the late 80's, EA had managed to sign top-level talent, including Julius Erving, Larry Bird, Earl Weaver, Michael Jordan, and Chuck Yeager, just to name a few. These types of collaborations continue to this day with people like Clive Barker, Tiger Woods, Muhammad Ali, and others. Started with Bill Budge (PCS). Will Harvey (MCS), Eric Hammond (Dr. J, later did Loom for LucasArts) and Ozark Softscape (Bill and Dan Bunten. Dan later Danielle Bunten, Danielle Berry)-M.U.L.E., Seven Cities of Gold, Modem Wars, all published by EA.

EA's move into self-production.

First step: Tim Mott and the Artist's Workstation. Came to EA in 1982. Became VP of R&D and developed AWS to increase programmer's productivity. It emphasized multimedia and graphics technlogy, included a heavy allotment of memory for rapid compilation and test execution of code, and included a suite of proprietary programs covering AI, file managers, music editors, graphics, debuggers, etc. Many of these tools laid the foundation for consumer products in the mid-1980s, such as Get Organized, Financial Cookbook, and Cut&Paste, culminating in the Deluxe series of software tools: paint, music, and video editors, a word processor, clip art library. For example, Deluxe Paint was the best-selling application for the Amiga computer.

First game shipped in house was Skate or Die (1987), though it continued to work primarily through independent programmers and artists.

Next step was affiliated labels, acquisitions that became in-house design studios. Began in 1985 with Software Toolworks, the first Affiliated Label Partner, and Strategic Simulations, Inc. (SSI). These were independent software houses that signed long-term exclusive distribution deals. Affiliated labels today account for roughly one-third of EA's income.

Then acquisitions, beginning with Distinctive Software in 1991. It produced sports games: car racing and soccer. After the acquisition, it was brought fully into EA and became EA-Canada. In 1992, EA acquired Origin Software (Lord British, Ultima). Later acquisitions included Maxis and Westwood Studios.

In the early 90's, EA experienced a significant management change when Larry Probst became company president. Probst assembled his management team, prepared to take the company to a new standard of operational efficiency, and set out to reach even higher goals for the company. Under Probst's leadership, EA continues to flourish and reach new levels of industry-wide and worldwide dominance.

In 1991, the company launched the EA SPORTS™ brand, along with its trademark slogan: "If it's in the game, it's in the game". EA had previously released a few sports games, but the objective of the EA SPORTS division was to create a top-selling game for every major sport. Madden Football, FIFA soccer, NBA Live, and other EA SPORTS franchises became so popular among gamers around the world that EA SPORTS rapidly became the strongest brand in entertainment software.

By carrying out its business model as planned, EA saw its unit sales and its profitability skyrocket over the years. This allowed the company to grow and invest in other studios. EA made many strategic acquisitions during the nineties. In 1991, it acquired Distinctive Software, Inc., a company that had developed more than a hundred products, including Test Drive and International Soccer. This highly successful studio now operates as EA Canada in Vancouver. In 1992, EA acquired Origin Systems Inc. This Austin-based company was best known for developing the games Ultima and Wing Commander. EA kept acquiring studios over the following years, like Bullfrog productions of London, makers of Populous and Theme Park; Manley & Associates, which became EA Seattle; Maxis of Walnut Creek, CA, maker of SimCity and The Sims series of games; Westwood Studios of Las Vegas and Irvine, maker of Lands of Lore and Command & Conquer; ABC Software AG of Switzerland; and Tiburon Entertainment of Florida.

With strong leadership, a growing international presence, and a vast array of high-quality entertainment and sports games on multiple platforms, EA has grown into the industry powerhouse that it is today

In May of 1995, EA made itself a home on the Internet at www.ea.com. At first, the EA.com website featured marketing information and news about EA products. Over time, it evolved into one of the most popular sites on the Web. In 1997, Ultima Online™ was launched and showed the potential for a whole new world of online games. This highly immersive online world instantly attracted more than 125,000 players and is still thriving to this day.

Seeing how popular the EA.com website had become and the opportunities for more growth in the future, EA decided to further explore its online potential. In the fall of 1999, EA.com acquired PlayNation and Kesmai Corporation. EA also signed a long-term agreement with America Online and, as a result, created a new business division called EA.com, which is AOL's sole provider of web-based interactive games. In December of 2000, EA signed an agreement with Boxerjam, a company known for its online interactive "game shows". Currently, the EA.com website consists of more than 54 games and over 1,250,000 registered users, with 10,000 new users registering every day. More recently, the company acquired Pogo.com, the leading family-oriented interactive gaming site on the Internet.

The company's online strategy, including the acquisition of Pogo.com, is only one of the strategic decisions EA has made to start off the new millennium on the right foot and ensure the company's continuous growth and success. In February of 2000, the company acquired DreamWorks Interactive, maker of the best-selling and award-winning Medal of Honor™ franchise. EA also signed a new distribution agreement with the LucasArts Entertainment Company, with whom it had done business before. These steps, and many more, will assure that EA continues its industry dominance.

Trip Hawkins. Created his own undergraduate major in Strategy and Applied Game Theory, then attended Stanford's Graduate School of Business, where he met Bing Gordon. He joined Apple in 1979 as employee #68. Became director of product marketing.