Case Analysis 1
Electronic Arts 2005
1. External Technology Sourcing
|Substance |External Technology Sourcing | |Competitive Strategy | In the follower position in sourcing external components to Electronic Arts (EA) video | | |game. | | | | | |EA is outsourcing the console, portable gadgets, PC and mobile (hardware). Many other | | |companies in the same industry involve in producing the finest products of video games. | | |In order to complete the product has to get all the hardware from others. Hardware | | |Platform Companies are as follows: | | | | | |Sony – EA is authorized in developing and distributing DVD-based software products | | |compatible with the PlayStation 2. Under the terms of the licensing agreements, EA | | |engages Sony to supply PlayStation 2 DVD’s for their products. In fiscal 2005, | | |approximately 43% of EA’s net revenue was derived from the software on the PlayStation 2.| | |Microsoft - Under the terms of the licensing agreements, EA is authorized to develop and | | |distribute DVD-based software products compatible with the Xbox. In fiscal 2005, | | |approximately 16% of EA’s net revenue was derived from sales of EA Studio games designed | | |for play on the Xbox. | | |Nintendo - Under the licensing agreement, EA engages Nintendo to supply Nintendo GameCube| | |proprietary optical format disk products for their products. In fiscal 2005, | | |approximately 7% of EA’s net revenue was derived from sales of EA Studio games designed | | |for play on the Nintendo GameCube. | |Value Chain Stance |Broad (total video game market) – narrow (game software scope) | | | | | |EA focus on the software component and not a complete video game product. | | |Interdependence in hardware companies in order to pursuit new games. | | |In conjunction to EA successful online properties, they had engaged in $85 million | | |co-marketing with America Online (AOL) (page 209). | | |EA had traditionally partnered with a specialty mobile game developer, licensing out | | |EA-controlled properties in exchange for revenue sharing from the sales to mobile | | |customers (page 210). | | |EA had worked with media...
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