Ea Origin - Market Strategy Analysis

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EA Origin – Marketing Strategy Analysis

www.EAorigin.com

Program Module Title Student Number Submission Deadline Word Count Assignment # Title

EMBA 2012 MICE Z0933034 April 16 2012, 8:45AM 2441 Summative Assignment #1 EA Origin – Marketing Strategy Analysis

Summative Assignment Purposes Only – Not for Distribution or Use

04/16/2012

EA Origin – Marketing Strategy Analysis

2

Situational Analysis
Electronic Arts Inc is a global industry leader, developer and publisher of Digital Media. They generate annual revenues of over 3.5billion USD selling video games globally. Up until 2009, out of this 3.5billion USD only about 10million USD annually was being generated from video games sold through online channels. (April 2010 - EA Annual Report) EA Online is a division of Electronic Arts that is responsible for all EA products sold though their website EA.com. In 2009, the purpose of this website was mostly marketing and original game related content delivery as opposed to ecommerce. The site did not have a sizable catalog, promotions that were compelling or a robust system for direct game purchase. Gamers got the best deals for game purchases through big box retailers such as Best Buy. (March 2009 - EA internal quarterly revenue report) Certain franchises such as SIMS, Battlefield and other such popular game studios started to sell their games online through their individual sites such as SIMSonline.com etc. These websites were fast becoming more successful in generating revenue. There was no single standard e-commerce offering that catered to entire EA’s gaming community at large. (March 2009 – EA Internal Quarterly Sales Report)

• EA Studios
Full games developed & Sold

Sets retail price

• Big Box Retailers

• End Customers
Maintain relationship with Retailers

•  EA Studios

Direct to Customer •  EA ONLINE SYSTEMS

Part development & ITERATION

•  Customers Download Games Directly Maintain relationship with EA

Figure 1: State of Business in 2009

Figure 2: Ideal future state of business

As you can see from Figure 1, the big box retailers enjoyed a direct relationship with the end EA customer; hence they controlled most of the pricing, marketing and game development decisions. Due to various factors listed below, EA executives decided to build a robust online system that can get the games direct to EA gamers without the help of big box retailers. Figure 2, explains the future state of business that EA wanted to pursue to help alleviate market, revenue, and other competitive pressures.

04/16/2012

EA Origin – Marketing Strategy Analysis

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In 2010, various internal, industry and market factors caused EA to invest in an offering that can cut the middleman and deliver EA content directly to EA gamers. Some of these factors were opportunistic others revenue focused. 1) The great success of competitor Valve’s direct to consumer game delivery system “STEAM” (EA Internal – Neilson Research Report 2010) 2) Technology advancements in faster download speeds & secure digital rights management. 3) 30% revenues that was lost to retailers in the existing business model. 4) Changing market that required newer game content – quicker. 5) Various internal factors: (EA Internal Quarterly Report – March 2010) a. Advent of social gaming and the purchase of Playfish Inc brought in new game culture and ideas among EA executives. b. New top management within EA Online that had a much higher influence on EA game studios to negotiate appropriate catalog & pricing. c. EA CEO’s new direction of channeling sizable $$ to marketing from development. d. Restructure of entire EAOnline team from a PR group to an ecommerce business. e. Failure of a previous acquisition meant to a key step in this initiative. Armed with the above forces, EA Online gave birth to a new product offering called EA ORIGIN in the fall of 2011. I was the Director in-charge of customer experience for this ambitious initiative....
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