Electronic Arts Inc. at a Glance

Uppers

  • Competitive salary
  • Ability to work on latest video games

Downers

  • Many positions require extensive overtime hours

The Bottom Line

  • EA is an industry leading video game developer with moderate employee satisfaction. ?

About Electronic Arts Inc.

Electronic Arts (EA) puts gamers in action on the gridiron, the pitch, the battlefield, and in outer space with its most popular games. Its leading titles are Madden NFL (American football), FIFA (football/soccer), and Star Wars (all of which are licensed) and its own Battlefield, Mass Effect, and The Sims. While EA generates increasing sales for games on mobile devices, it still makes most of its revenue from games played on consoles from Sony and Microsoft and on personal computers. EA also provides online social games such as those licensed from Hasbro, which include Monopoly. The company is moving into competitive gaming and eSports with its Competitive Gaming Division.

Operations

Electronic Arts collects revenue from sales of its games on disc, digital downloads (onto several platforms), subscription fees, and in-game transactions.

Digital has become increasingly important for EA, bringing in more than 65% of revenue. Packaged games account nearly 35% of revenue. Its digital products and services are delivered via Sony's PlayStation Network, Microsoft's Xbox Store, Apple's App Store, and the Google Play store. About 40% of revenue comes from the sale of live services (extra content, subscription, advertising, and other services).

Perennially popular games are FIFA, Madden NFL, Star Wars, Titanfall, Battlefield, and Sim City. FIFA is a top seller, generating some 11% of the company's total revenue.

Geographic Reach

California-based Electronic Arts operates development studios in North America and leases properties for R&D, sales, and administration in Europe and Asia. North America is its largest market, accounting for more than 40% of sales. International customers supply the rest.

Sales and Marketing

As Electronic Arts' business becomes increasingly digital, more of its products sales are generated through the internet. Such channels include Origin, the company's direct-to-consumer platform, digital downloads from third-party retailers, and mobile applications.

EA sells directly to console makers Sony and Microsoft, which account for more than 25% and more than 15%, respectively, of total revenue. The company also sells packaged games to retailers, including mass merchants (Walmart), consumer electronics stores (Best Buy), and specialty game shops (GameStop). EA has partnerships with Tencent Holdings Limited in China and Nexon Co. Ltd. to sell FIFA Online 3 in Korea.

Financial Performance

Electronic Arts’ up-and-down revenue was up in 2018 (ended March), rising 6% to about $5.1 billion from 2017 results. Stronger sales of its FIFA franchise and first-person shooter franchise Mass Effect drove the increase. Digital rose about 20%, reflecting players increased interest in digitally delivered games and engagement with EA’s live services. Driving the spike in Digital, live game services net revenue rose 31%, due in large part to increases in Battlefield 1 Premium and Ultimate Team services sales.

EA’s net income rose to $1 billion, up 8% in 2018 from 2017 year-over-year. Higher overall revenue, as well as a lower cost percentage for product and service revenue, drove the increase.

Total cash on hand was $1.6 billion in in 2018. A $385 million sales increase in the sale of Ultimate Team and Mass Effect: Andromeda, launched in 2017, increased cash flow from operations to $1.7 billion in 2018 from $1.4 billion in 2017.

Strategy

Electronic Arts has discovered the value of connection. By connecting players through its Ultimate Team mode and live services, which allow players to interact in real time, EA's player network has captured more of its customers’ time and established lucrative revenue streams. The more players it attracts and keeps playing in its networks, the more money the company brings in.

In fact the company derives a significant portion of total revenue (more than 20%) from its Ultimate Team game mode, a feature that breathes new life and player interest in EA's FIFA, Madden NFL, and other long-running franchises . Live game services also provide additional revenue streams for EA that includes extra digital content, subscriptions, and advertising.

Aside from its player network, EA is investing heavily in its technology infrastructure, for both external-facing and internal systems. On the customer side, the company is extending many of its console and PC games to digital platforms to increase EA's presence in the mobile game market, which has captured more market share in recent years.

To improve internal operational efficiently, EA has moved nearly all of its development activity to one game engine. This allows the company's developers to work across platforms, which in turn accelerates development and streamlines technology operations.

Mergers and Acquisitions

In late 2017 Electronic Arts acquired independent game development studio Respawn Entertainment LLC, creators of AAA shooter and action games, including the critically acclaimed Titanfall™ franchise.

Company Background

After four years with Apple, video game pioneer Trip Hawkins left in 1982, raised $5 million, and founded Electronic Arts to explore the entertainment potential of PCs. The company went public in 1989, and sales exploded the next year when EA began designing games for SEGA's Genesis video game system. Hawkins stepped down as CEO in 1991 and was replaced by president Larry Probst. (Hawkins remained chairman until 1994; he left to devote time to another game company, 3DO, which later went bankrupt.) The company bought game developer ORIGIN Systems in 1992 and began marketing its games in Japan with partner JVC. That year Sony introduced its PlayStation game system in the US.

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Electronic Arts Inc.

209 Redwood Shores Pkwy
Redwood City, CA 94065-1175
Phone: 1 (650) 628-1500
Fax: 1 (650) 628-1380

Stats

  • Employer Type: Public
  • Stock Symbol: EA
  • Stock Exchange: NASDAQ
  • CEO: Andrew Wilson
  • Executive Chairman: Lawrence F. Probst
  • CEO: Andrew Wilson
  • 2018 Employees: 9,300

Major Office Locations

  • Redwood City, CA

Other Locations

  • Concord, CA
  • Los Angeles, CA
  • Pasadena, CA
  • Orlando, FL
  • Louisville, KY
  • Baton Rouge, LA
  • Minneapolis, MN
  • New York, NY
  • Pearl River, NY
  • Braine-L'Alleud, Belgium
  • Burnaby, Canada
  • Montréal, Canada
  • Shanghai, China
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