Team Case Critique

Electronic Arts is an American based company it mainly markets and produces computer and video games. It’s widely recognized for developing brilliant sports games along with this it also produces a wide variety of different games for the consumers. Moreover it manufactures the games fulfilling the requirements of all the platforms that is it does not restrict its games for the usage of one platform only.

It is a profitable and prosperous company, however in the present days it is suffering as there are some great concerns regarding its business. For this purpose the board would advice the CEO that the company should bring a change in its strategies in order to thrive in such a competitive and demanding environment the company should firstly look towards the creation of downloadable games of this will not only increase the sales of its games but also reduce the costs of physically making the game, the handling and inventory of the games.

More to add Electronic Art should work on establishing an online platform where games are available for being downloaded, although this will cost the company some amount but the increase in revenue that will be generated by the sale of the games online will be completely worth the efforts. Additionally making small versions of the game will also be favorable for the company as converting the larger versions into mini versions does not require much additional resources.

This way the games can easily be downloaded to wireless devices such as the mobile phones and I pods, which will be an added source of income for the company without incurring a great deal of added costs. There is a price ceiling that exists in the game market of $59. 99 the platform manufactures do not wish to increase the price beyond that, these console manufactures have great power to influence the prices. The only way Electronic Art can shatter this price limit is by producing innovative and distinguished games.

By offering product differentiation only will the manufactures be able to set their own prices for their product instead of being under pressure by the console manufacturers. For this purpose the company should look to towards attracting fresh and young talent and merge them with the experienced teams that have made the name of the “popular games” a huge success in the market. The company’s statistics show that the top 100 games are responsible for 50 % of the sales for the company this means that the rest of the games for which money is spent on is simply wasted as it does not prove to be fruitful for the company.

The company should adopt a strategy of producing limited games but doing a lot of research and development for the making of these games this as this will lead to a greater possibility that these games will be a winner in the market. This will provide opportunities for the company to cut down its costs and use its resources more competently. We also agree with valuing the employees and develop strategies to retain the talented and experienced personnel of the organization. As a result we should provide the employees with enhanced monetary and non monetary benefits.

Profit sharing with the employees is a great idea as that will make the employees feel a part of the company and encourage them to use resources more wisely. Try to coordinate employees to work cooperatively and come up with out of the box ideas and strategies. In our opinion the company should not discontinue usage of celebrity endorsement to promote the games but to limit it as far as possible in order to keep costs within a limit. Unnecessary and excessive celebrity endorsements should be avoided as this leads to increasing the burden of costs for the company.

To resolve the issue of the high royalty fees charged by the console manufacturers EA should look forward with having negotiations with those companies. The companies should be told that Electronic Art is willing to pay for the royalty fees when a game is lucrative in the market but in those cases where the games are not doing well in the market the console manufacturers should not take royalty fees from those games as the dealing for those games would be mainly to recover the costs and settle at breakeven.

Special incentives such as supplementary royalty fees should be provided to the console manufacturers if the games are unbeaten and are doing a flourishing business. This incentive will help to motivate the console manufacturers to agree to Electronic Art’s offer. Starting off with small console manufacturer is a good idea as that enables to convince those manufacturers easily as they rely on Electronic Art’s games.

They should motivate the console manufacturers that by following our company’s proposed recommendation regarding the royalty fees both of our companies will grow together this way. The future strategies have to be based on lowering costs but increasing revenue, but at the same time not compromising on the entertainment factor the games provide. The including of inbuilt advertisements within the game is a great source of revenue and also doesn’t distract the attention of the gamer.

Advertisers are ready to market their products and services in such a manner as it is a fabulous way to subconsciously advertise a company’s product and services. Furthermore the suggestion of providing opportunities for the improvement the characters online with a small amount of fee is quite impressive. As many gamers will be willing to enhance the style and functionalities of their characters and with a small amount of fee numerous customers will be wanting to avail this facility which will lead to increased revenue for the company.

After the company attains substantial success and generates enough funds it should focus its attention on developing multiplayer games, as these games require a great deal of capital to be developed. Hence firstly the company should expand by all those means that do not call for a significant amount of excess funding then move on to those projects that need a great deal of investments. Moreover the company should think of implementing other major projects which include virtual simulation when they have enough financing as these types of games also require ample of resources.

Additionally in the long run the company could also work on coming up with its own platform, however this decision has to be taken quite carefully and vigilantly as there is a risk of losing out the customers if this strategy proves to be unsuccessful. At present the company’s strategy should be to capitalize on the sports section of the games in which the company is fine and move forward with the innovative and creative ideas that develop in the company that do not require a high level budget, later on it should move on to extensive projects when Electronic Arts has loads of funds to commence them.

Summary Electronic Arts is a company that manufacture a wide variety of games for many console manufactures, online use and mobile phone devices. It specializes in the development of sports games . The company has its headquarters in America and it has been a giant in the game business and has come up with several of “super hit “games for the industry. It is recognized for a company that comes up with creative ideas and innovative games by altering the graphics, animation, programming, etc.

The company is facing certain issues at present ant the only way to get back again is to develop certain strategies and act on them as soon as possible. Due to increased restrictions from the console manufacturers the company should also focus its attention to provide games online and on mobile phones as these steps will enhance the prosperity of the company. Additionally Electronic Arts should come up with original and new games, those games will be differentiated and then Electronic Arts will have the opportunity to charge more on those games.

This will help to diminish the price ceiling that exists in the market as Electronic Arts will be able to influence the price of the games. The company should try to negotiate with the other console manufacturers to remove the royalty charges incase the game does not do well in the market. Furthermore, the company should look for further ways to increase the revenue and cut down costs for the company.

Inbuilt advertisements within the games and providing gamers the opportunity to upgrade the characteristics of the characters with a small amount of charge, these tactics will enable the company to generate added revenue. In the future when Electronic Arts has sufficient funds it should look towards emphasizing on multiplayer games and games with simulation effects. At present its strategy should be focused on increasing revenue while keeping costs within boundaries. Reference: 1) Website: www. ea. com Date accessed 1 July 2008