Electronic Arts: The Rise and Fall of EA

Electronic Arts: The Rise and Fall of EA


The whole point of video games is that they
are fun. So how did Electronic Arts grow to become
one of the biggest players in the gaming world and yet was voted the “Worst Company in
America”? Why did ‘Challenge Everything’ become
‘Milk Everyone Dry’ and has it made any difference to their bottom line? Today we’re going to look at the innovative
origins, bold decisions and later missteps of Electronic Arts. This video is brought to you by Squarespace,
by far the best platform for making a professional website out of scratch. Sign up with the link below to get 10% off
your first purchase. The founder of EA, Trip Hawkins, already sounds
like a video game character, so it’s no surprise that he ended up playing a huge part
in the development of the industry. As a teenager, Hawkins loved board games and
even designed one of his own, called Accu-Stat Pro Football, based around his love of American
football. But whereas a regular kid might just cut up
some cardboard and invite a few friends over, 17-year-old Hawkins convinced his father to
give him a small loan of $5,000 and actually tried to put the game into production. He ended up making about a hundred copies,
but the game was a commercial flop. Nevertheless, it was an invaluable business
lesson that would eventually serve him well. Later on he studied at Harvard, where he majored
in strategy and applied game theory. In 1971, he got to see a prototype computer
at a friends house, and that convinced him that computers were the way of the future. This led him to pursue a job at Apple, back
when it had just 50 employees. There he learnt everything he could, inspired
by Steve Jobs’s drive and ambition, but always with the knowledge that he was going
to start his own business eventually. So, four years later, when Apple went public,
he cashed in his shares and set about creating Electronic Arts, which he founded in 1982. He started with 11 employees and $5 million
in start-up capital, including money from , the godfather of Silicon Valley who also
invested in Apple, Atari, Google and Youtube long before they were household names. Hawkins played around with a couple of different
names for the company, but the one he eventually picked is telling of his philosophy:
to him software developers were artists, not just coding monkeys. In fact, he even spent his time between leaving
Apple and creating EA to look at the music business and to study the types of contracts
they had for their recording artists. You can see this reflected in EA’s early
releases like Pinball Construction Set and Hard Hat Mack. Their big, colorful covers featured the name
of the game designers, or electronic artists, written prominently on the front. From the very beginning EA’s model was different
from that of other game studios at the time. Instead of putting actual effort into coming
up with good ideas, they let freelancers submit game concepts and then EA would pick the ones
they wanted to work on, just like a Hollywood movie studio selecting scripts. EA managed the development of each game as
if it were a movie rather than a traditional piece of software, by focussing on the entertainment
and the audience. They ran multiple projects at the same time
so that if a game or two sucked, all EA needed was a good one to cover them up. For the most part, and this is still true
today, an independent developer or development team would create the game and then EA would
publish it. Hawkins really believed in games as a source
of entertainment. He wanted society to break out of brain-dead
television and to embrace the interactivity of games by connecting with others. Although, don’t ask your average Call of
Duty player how that worked out. In 1983, EA stumbled upon a formula that would
later allow them to totally dominate the world of sports video games. Doctor J and Larry Bird Go One on One was
a basketball game, but by tying it to real-life players Julius Erving and Larry Bird, and
getting them to help with the development and marketing, EA drew on a powerful idea:
that everyone aspired to be like their idols. If you were shooting hoops in the playground,
you didn’t want to be yourself, you wanted to be like Michael Jordan or Shaq. Or if you played Dungeons and Dragons: you
weren’t imagining yourself out there battling evil, no, in there you could be like Robin
Hood or Gandalf. So, when you picked up a game with one of
your real-life heroes on the cover, well, that was a chance to bring your dreams to
life on the screen. If you go to a game store now, you can see
how successful this idea was, with the faces of famous sports stars peering out at you
from the shelves, from Tom Brady on the Madden 18 cover to German soccer player Marco Reus
on Fifa 17. The Madden series was first released in 1988,
after a long development. In order to get the legendary coach John Madden
on board, EA agreed to make the game as realistic as possible in accordance with his immense
knowledge of American football. So far the series has about 30 versions, and
a new one comes out every year with an updated roster, and slightly better graphics. This method of producing games with no real
changes whatsoever has inexplicably brought in $5 billion. Of course, EA have covered a whole range of
other sports too, from hockey and tennis to golf and many others. All these titles were put into their own division
in 1991, with the creation of EA Sports, which quickly bought up the official licenses to
many leagues and tournaments so that only its games could have the official players. Aside from celebrity endorsements, another
key to the success of EA was their persistence in cutting out the middlemen. Rather than handing their games over to distributors,
EA went directly to the retailers in order to keep a bigger percentage of the sales. They made great deals with Walmart, Target
and Toys’r’Us, which gave them noticeably higher margins than their competitors. When the market for games consoles began to
grow, publishers had to take on the cost of making expensive game cartridges. This made it harder to release a game on multiple
platforms since you weren’t just dealing with the compatibility of the software, you
needed completely different manufacturing as well. Thanks to their good deals, EA could afford
this more expensive production, and releasing on multiple platforms has now become a key
strategy for them. That’s one of the reasons why EA would not
work with Nintendo back then, because they wanted games exclusively for the Nintendo
Entertainment System. Instead, EA took a gamble on the new, not-yet-released
Sega system called Genesis, which was twice as powerful as most other machines, particularly
the NES. The gamble paid off and by 1991, the Sega
Genesis was a shining success, largely because of the popularity of the growing number of
EA sports games. Hawkins eventually resigned from the board
in 1994, to pursue other projects. The company, of course, grew without him,
thanks to its sports titles and a number of movie tie-ins, such as Lord of the Rings,
Harry Potter and James Bond. But along the way, as EA grew ever larger,
they embraced a strategy that is one of the main reasons they are now infamous within
the gaming community. Rather than simply publishing the games that
developers made, EA started buying all of the developers themselves. They acquired Maxis in 1997, taking control
of the SimCity series and eventually running it into the ground. In 2007, they bought BioWare and their hugely
popular Mass Effect series, and then they ran that into the ground as well. At least they haven’t wrecked Star Wars:
Battlefront yet. EA’s list of acquisitions goes on and on,
however, and what they often did after buying a studio was to shut it down. Pandemic, for example, was closed just a two
years after purchase, with EA retaining the intellectual property, of course. A lot of EA’s releases now are simply rehashes
of all these titles that they have acquired. Fans feel like there’s no real development
happening, merely a few updates and name changes so they can market the same product all over
again. I mean, just look at the never-ending list
of Madden and FIFA titles. In the past a lot of innovations came from
the smaller studios, but now that’s far less likely to happen after so many have been
assimilated. EA have also had to adapt to the influence
of the Internet: now, for example, they aggressively push multiplayer modes in all of their games. The trouble with online multiplayer is that
you need to host it, which is pretty expensive. Players have bought a game on the promise
of online multiplayer, and then after a couple of years, EA shuts down the servers and they
basically can’t play the game anymore. Even for the big games, where hosting is supposedly
going to last indefinitely, players often need to buy online passes, which greatly add
to the cost of the game. Another notorious EA strategy has been to
release tons of downloadable content, or DLCs, at a pretty significant price. Mass Effect 3, for example, was released at
$60, but alongside its launch was a crucial DLC that cost another $20. You didn’t have to buy it, but if fans had
followed the series this far, they definitely wouldn’t want to miss out. To be clear, this is certainly not a problem
that is unique to EA, but industry leaders should always be held to a higher standard. The CEO for most of this negative period was
John Riccitiello and he was eventually removed in 2013, perhaps to keep the fans happy, but
probably for another reason. Even though EA was pulling in billion in revenue,
Riccitiello lost money for four years in a row. The CEO change really worked: EA went from
an $8 million profit in 2014, to $875 million the next year. Their success hasn’t quenched their thirst
for money, however, and when you look at some of their latest releases and the unstoppable
flood of DLCs, it’s hard to argue that EA is in it for the art and not just the money. Of course, the sheer scale of most of their
games will likely keep the fans coming for a long time; the hype around Battlefront 2
being just the latest example. But if EA really want to improve as a company,
they’re gonna have to stop squeezing their customers out of every last penny. Right now EA release half a game at full price,
and then charge the same or more when they release the rest of the game as downloadable
content. That might boost profits on the short-term,
but it’s absolutely not the way to build any sort of loyalty with the players and if
EA don’t improve their behavior, their reputation will eventually catch up to them. Our reputation is important to us here at
Business Casual, which is why we’re finally building our own website. This endeavor seemed daunting, especially
considering all the features we’ve got planned for our site, but to tell you the truth it
has been surprisingly easy thanks to Squarespace. Their all-in-one award winning platform truly
lived up to its reputation. They’ve got over a hundred beautiful templates,
which are perfect for any fansite, blog or business website you may want to build. There is no need to install, upgrade or patch
anything, ever and that’s why we’re building our website with Squarespace right now. If you visit http://squarespace.com/businesscasual,
you’ll get 10% off your first order. In doing so you’ll not only be on your way
to making an exquisite website with minimal effort, you’ll also be helping to support
this channel. Of course, I want to thank our patrons for
supporting us and to you for watching. Follow us on Twitter and Facebook to stay
in touch, and as always: stay smart.

Dereck Turner

100 thoughts on “Electronic Arts: The Rise and Fall of EA

  1. HN says:

    This video was made before Battlefront 2 EA. A lot has changed since then.

  2. Bob the Bobby says:

    EA Sports: It's in your WALLET

  3. 3NCode says:

    Even tho 2k is highway robbery it still has a much bigger market share then nba live ea couldn’t really find the balance

  4. Illeia Oslo says:

    Same fate with SE

  5. Alela Anzala says:

    3:21 Shaq Fu

  6. Ayush Pandey says:

    Yes,they actually shut down the servers for the previous games like fifa 17 server is no more online.

  7. Ayush Pandey says:

    The way they buy and kill the other gaming company the same way they are doing with themselves now.

  8. AshGamer007 says:

    EA Games Stealing Everything

  9. worthless says:

    4:51 xd

  10. paoloww says:

    Why would u care about reputation when internet fans change mind so quickly. Blizzard was for many years mercedes of gaming companies and now one annoucement later every fan hates them.

  11. Billy Bob says:

    Well I never thought I would say this but I think it’s time to go to PES

  12. i want to die says:

    Purchase ability to read comments
    99.99$

  13. MegaBoeboe says:

    Yay capitalism.

  14. Hoshimin Abdulcader says:

    Hi

  15. Miko Piko says:

    Just one thing. Money Oriented.

  16. cyberfrank 2010 says:

    the best days of EA were with the early days of the genesis.
    if Sega ever does a genesis mini classic, it needs those great games as;
    the strike serie, and road rash.

  17. Captain Tsubasa 10 says:

    They ruined FIFA! Wish 2K would make a proper football game

  18. The Goddamn Batman says:

    They paid for it this year. PWNED

  19. bing the great says:

    can you do a behinde the buessnes carinival cuise

  20. Treelight says:

    I miss sim-city. The mobile version sucks.

  21. Rial Seebran says:

    do Bethesda next please

  22. Theristai says:

    $$$$$

  23. Sowmin Trivedi says:

    Wow 4:52 didn't expected anime trap there.

  24. Brady Hagewood says:

    EA: "We don't need visceral games anymore, right guys?"

    Me"Fuck you…..and fuck your art! "

  25. David Wittberg says:

    Battlefront and Battlefield has been ruined since this video was made.

  26. KaibaCorp HQ says:

    EA is like the Borg; the abomination needs to die.

  27. Sybe De Backer says:

    7:51 yeah that would be real shame wouldn't it

  28. Mr. JustAGuyWithALightsaber says:

    Wait, how did you publish a video in 2017 and not already know what a colossal disaster BOTH of the reboot Battlefront games were? Even the second one would've been out by then, at the height of the micro-transaction controversy.

  29. Luke Skywalker Jedi Knight says:

    6:05 WAALLMMAAAARRTTT!!!

  30. ThunderBlastvideo says:

    Wii sports > EA sports

  31. Grookey says:

    EA kinda reminds me of Disney they both buy large company's and run them into the ground for money until nothing is left EA ran Mass Effect and Sims into the ground like how Disney is brought Star Wars and Marvel and currently running them into the ground.

  32. Tahoor Asim says:

    I want burnout again !!!

  33. Z Kid says:

    EA has ruin my xbox career😥

  34. IAN THESEIRA says:

    Yes this slash and burn M.O. and ethos is found throughout corporate world, more so in mass media, from telco providers to media producers/publishers.

    So that screwing over and burning bridges,, seems to be acceptable price, accounted for as casualties and collateral damage.

    Wonder if The dashboard dials they are looking at, (like totals satisfaction, or more like totals saturation on central nervous system – headway and ground gained) makes these cut throat business models, acceptable

    Due to the so called "real" value and satisfaction digital and electronic technology has afforded? Except that there's probably an error in quantifying and measuring somewhere

    Where values and principles that populate mind (the place where expereince is processed- relics of inherited value systems, heritage, history, genetic memory) has been discounted for some totals volume output

    – that is not experienced as satisfaction, well being, contentment by humans. Even though we are being stuffed full with content, we find ourselves less and less contented

  35. ShiroyoOchigano says:

    I stopped buying EA games a long time ago. I don’t even bother to watch the game trailer if EA has a hand in it.

  36. gast128 says:

    They used to make good games; especially the early years of 'Need for Speed'. Nowadays I despise their business strategy but customers still buy their games, dlc and lootboxes massively.

  37. sanch Sanchayan says:

    It's the smart phone and smart tabs that will give the competition. Just give it 5 more years time. I want the smart tablets to have GPU cores.

  38. Omicron Force says:

    Apex legends

  39. Diving Adventures says:

    They screwed up one of my favorite games, sim city. I will never buy another EA game.

  40. Ajal Chakma says:

    The fact that they ruined Command And Conquer still haunts me …

  41. Trayambakam says:

    Hate u EA for killing good franchisee

  42. MFC Media says:

    Wish They Wouldnt Of Brought Playfish I used to love there Social Media Games Like Hotel City but Alsass EA Brought them and smashed it into the ground 🙁

  43. DaDARKPass says:

    Ea: the company that ruined the chance of need for speed being good from 2011-2017 by killing Blackbox and having them make some stupid mobile games. ehh, no wonder most of those guys left or joined other areas of ea

  44. Joseph M says:

    Never knew EA created Shaq-Fu. This explains everything

  45. João says:

    When DLC was the problem.

  46. durai prasanth says:

    FIFA

  47. Srajan Dikshit says:

    EA Cricket 2007 was Legend

  48. Srajan Dikshit says:

    EA but ruined Sim City

  49. Peter Pober says:

    There are command and conquer fans with tears in their eyes right now.

  50. Uday Thambimuthu says:

    Office buildings I wouldn't shed any tears over if they were firebombed:
    EA, monsanto, bayer, BP, exxon, and the diamond cartel that I forgot the name of.

  51. J02Killahz says:

    No DLC for this video!!!! AMAZING

  52. [GD] Dionbest says:

    What is ea is going to be the president of America

  53. Bighawk says:

    So basically we should blame apple.

  54. Reality _ PW says:

    Whats wrong with EA huh

  55. Final Master says:

    EA: Once a pioneer, now a coward.

  56. marco garza says:

    🔮🔮🔮⚗🛡🛡We need John Madden back in the NFL 💻📡🔭

  57. Harsh misra says:

    you almost forgot about the old game of RoadRash which was released by EA during 90s and was a huge sensation

  58. Aristos Player 1 says:

    they are greedy af, I wish them a painful death

  59. manuelmetallica says:

    Never buy EA

  60. Anym says:

    2 words. Andrew Wilson

  61. KirinCloud says:

    4:50 hmmmm, was that Ferris
    ?

  62. Jason G says:

    I wouldn't mind seeing nba and nfl street redone

  63. John Greathouse says:

    Do a video on Value (Steam) .. good story by ex-Microsoft exc , Steam is now dominate

  64. gaming TR says:

    isn't it obvious ?

    challenged more than itself

    'ChallengedEverything' in fact

  65. Omer V says:

    Holy shit. Andrew Wilson increased profits by 1000% in ONE YEAR. I despise EA, but that’s actually commendable…

  66. Buddha Shaqtea says:

    "Pays 50 dollars to watch."

  67. Computer Power says:

    ….. to continue watching this video please transfer 100$ to this account 35669896256/12.43213821932917383
    7167316

  68. Rexx Bailey says:

    MAKE ONE ON ANOTHER EVIL.. YOUTUBE . 🙂

  69. Mateo Solano says:

    DLC and in-game purchases killed video games… or at least for broke people 😉

  70. Pyrocynical X says:

    THANK YOU SQUARE SPACE!

  71. joshua diola says:

    My favorite EA games is Command and Conquer Generals Zero Hour.😎👍

  72. dseme11 says:

    Didnt age well o star wars

  73. kai khai says:

    EA is evil. so please can a company just buy ea caused they are ruining everything. and if a company buy it please fix it company games cause they are ruined like fifa 19, pvz2, and madden 19, and also sims 4

  74. RaGe Bloody says:

    EA actually LISTENED, to it's consumers back then?!! Boy have things changed.

  75. RaGe Bloody says:

    What is it with Asian Tech Companies wanting to feel special? Nintendo refusing games from EA because they wanted it to be exclusive, Sony had Destiny 1 and 2 with PlayStation exclusive weapons, and all sorts of other shit. I'm sure Microsoft wouldn't cross platforming some games, but PlayStation wouldn't feel special enough because Xbox would require access to exclusives.

  76. Artemus Rodricq says:

    IT'S NOT "OUT OF SCRATCH"!!! IT'S "FROM SCRATCH"!!!

  77. Joe T says:

    Video game scripting

  78. Orckks says:

    with that music on background it looks like him watching a creepypasta xd

  79. Smitty says:

    DRM… non starter here

  80. patrick munyoki says:

    You are a good advertiser

  81. Alexandros Ntolgkov says:

    Thank God for CD projekt Red

  82. joshua43214 says:

    EA is the Apple of gaming

  83. Zuhair Khan says:

    Unlock comments for $29.99

  84. Jay Jay says:

    EA is like the Borg of Star Trek lore, but worse.

  85. Voodoo Child says:

    EA is the worst company in america because ubisoft is french

  86. NihlusGreen says:

    Great video. Oh how quickly things have turned for the worse in gaming consumption since this was published.

  87. Knuckles badass industries reviewsforeverman Bryguy says:

    do one on eb games to

  88. bsklasika says:

    and now, finally, PES is taking over FIFA and we are going to witness complete demise of EA.

  89. EmiDWD aka STK Salty says:

    I think PVZ will be safe under EA for now…

  90. THE16THPHANTOM says:

    5 billion dollars. its not inexplicable anymore, not in 2019. we know now that they milk unsuspecting players who don't actually play games but make an exception for sports games. they make them pay thousand of dollars a year on micro-transaction using psychology as a weapon then reset everything with their next barely improved version and make them pay thousands all over again.

  91. Jonas Martinez says:

    EA was publisher…. they should have stayed a publisher…. but noooooo, they had to own the companies that built the games they published, then destroyed the games that got them famous.

  92. Derrick Barnette says:

    Pretty big detail often slid under the rug, is that all these legacy companies founders especially those born in the early 80s worked for apple, Microsoft, Atari, branched off into creating the video game business as a hobby, then after success moved on to other ventures in Silicon Valley. Fast forward to 2010, Most of the founders of video games left their post, and gaming had finally become accepted as mainstream entertainment. This is when all the people only interested in profit took control of these companies and killed innovation. It could be argued that 2010 was the year that all the publishers and developers adopted ea s practice of rereleasing the same game with updates. Today, the only difference between most games is the story, which is rarely as good as anything from previous generations. At the beginning of Last gen all the excitement from the media was directed at how the future of games were going to be realistic and cinematic enough to compete with Hollywood, however the rise of mp gave these companies a reason to be lazy and now little effort is put into the most expensive gamble in game development, the single play story mode. Most publishers took advantage of the ea model and began promoting mp due to its popularity, however they knew a fortune lie in no only games. Gamers let this current state happen by jumping on the bandwagon after being seduced by the idea that gaming was no longer for nerds. Same thing is currently happening in comics where the mainstream popularity of the mcu has killed the source matierial.

  93. Iamwolf134 says:

    It's already catching up to them right now.

  94. leon watkins says:

    Because EA have blue balls us about skate 4

  95. TheGhostGamer says:

    i bet Trip Hawkins is disappointed what happened to his company

  96. b xpress6 says:

    they totally changed pogo loggin while ago..then lost a bunch of games when java games were eliminated recently..now flash games will be next..after that I will be gone from pogo..I'm amazed they can't find ways to make html5 games like the classic ones that are gone or about to be gone😑

  97. Vegeta says:

    its 2019, they already ran star wars into the ground lol

  98. Vegeta says:

    Hopefully they go bankrup and are forced to sell games to other developers.

  99. Niam Leeson says:

    Well that was a great breakdo- (pay 2.99 to see the rest)

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