Situation Analysis (SWOT)

Internal:

·       Strengths

o   Customer Centricity: EA places great emphasis on customer satisfaction, actively solicits player feedback, and promptly improves products and services. In 2018, one of EA’s games, Star Wars Battlefront II, was criticized for its “pay-to-win” system, which undermined the fairness and gaming experience. Upon receiving this feedback, EA immediately made changes to the game, completely altering the unfair aspects of the original system. This is not the only example;  EA has demonstrated its attention to player feedback on multiple occasions throughout history, adjusting its games or policies accordingly.

Furthermore, EA maintains active official accounts on major social media platforms (such as Twitter, Facebook, and Instagram). EA staff actively interact with players on these social media platforms, addressing their questions and comments. EA has also created a platform for players to directly post feedback, suggestions, and report issues: EA Answers HQ. EA’s community managers and technical support teams regularly review posts and respond to player inquiries.  Many of EA’s games also have built-in feedback functions.

o    Strong and Popular Game IPs: EA boasts an impressive roster of game franchises that transcend the gaming community, becoming cultural icons recognizable even to those outside the gaming world, such as Plants vs. Zombies and The Sims. These titles significantly elevate EA’s brand visibility and have cultivated a vast and dedicated fan base.  Leveraging these well-established IPs, EA consistently innovates by releasing new games or downloadable content (DLC) annually. This strategy ensures a steady revenue stream for EA, underlining the company’s ability to maintain its financial health through its strong and popular game properties.

o   EA Originals Program: The EA Originals Program is a cornerstone project of EA to support independent game creators. This initiative helps these creators bring their innovative games to life by providing full support in the form of cash, platform access, and marketing assistance. This strategic support structure has considerably improved EA’s position in the game development business, demonstrating its commitment to promoting innovation and helping the independent gaming community.

Beyond aiding developers, the EA Originals Program has contributed significantly to enhancing the gaming landscape for EA’s audience. It provides EA customers to a wealth of new, inventive, and distinct gaming experiences that differ from traditional offerings. These games frequently defy conventions, fusing creative expression with imaginative gameplay to provide players with unforgettable experiences. Such as It Takes Two.

Furthermore, the program has proven to be a magnet for drawing a broad and younger clientele, which has helped EA increase its consumer base. 

·       Weakness

o   Technical Imperfections: The EA app (formerly known as Origin) has been widely criticized for technical flaws that negatively impact the user experience. Issues such as frequent disconnections, difficulties connecting to the internet, and a general lack of platform robustness have been common complaints among users. In this regard, EA’s competitors, including Steam, Epic Games Store, and Ubisoft Connect, generally outperform the EA app in terms of user experience and platform stability. These competitors also tend to manage their platforms and game updates more effectively than EA.

The technical shortcomings are also evident in the games released by EA. In recent years, EA has faced criticism for launching games that many consider to be incomplete or flawed. There’s often a rush to develop games leveraging the brand names of strong IPs, but due to insufficient technical polish, many of these games suffer from poor quality, including numerous bugs.

o   Weak Security Measures: There have been situations where EA’s products and services have shown security flaws, potentially jeopardizing customer data and privacy. Such breaches in security procedures reflect badly on EA’s dedication to protecting its users, undermining faith in the corporation. 

o   Over-reliance on DLCs and IPs: EA’s business model has increasingly relied on downloadable content (DLC) and the monetization of its intellectual properties (IPs). While DLCs and IPs represent significant revenue streams, an over-reliance on these elements can lead to consumer fatigue and resentment. Many players on Reddit have expressed dissatisfaction with new games straying from their original themes, accusing EA of compromising the integrity of their beloved franchises. This strategy risks alienating the very consumer base EA aims to engage. 

o   Deteriorating Brand Reputation: Perhaps the most profound weakness of EA has been the erosion of its brand reputation. Due to various controversial decisions and a business approach that many believe prioritizes profit over the artistic and creative essence of gaming, EA has faced backlash from the gaming community. This sentiment was epitomized when EA received the “Worst Company in America” award by Consumerist, securing nearly 78% of the vote. Such a distinction underscores the disconnect between EA’s strategies and the expectations of its consumers, indicating a misalignment with the gaming community’s values.

External:

·       Opportunities

o   AR & VR Technologies: The advent of AR and VR technologies presents a golden opportunity for EA to lead in innovation. The fusion of AR and VR with EA’s gaming portfolio could redefine the boundaries between the digital gaming environment and the real world, providing players with an interactive experience that is both innovative and deeply engaging. EA’s array of games, including “The Sims” and “EA Sports FC,” are celebrated for their immersive experiences and high levels of engagement. By integrating these games with VR, EA has the opportunity to pioneer groundbreaking gaming experiences that merge the virtual with the tangible, captivating a broader audience and establishing new standards for realism and immersion in gaming. 

o   The Global Gaming Market’s Growth: The global gaming market is witnessing remarkable growth. The global video game market is expected to grow at a compound annual growth rate of 13.4% from 2023 to 2030 to reach USD 583.69 billion by 2030 (Grand View Research 2023). This is mainly driven by the accessibility of mobile games and technological advances.

Emerging markets in Latin America, Africa, and the Middle East are at the forefront of this expansion, thanks to their young, tech-savvy populations and increasing internet and smartphone penetration. Countries like Brazil, Mexico, South Africa, Nigeria, and those in the Middle East are experiencing a gaming boom, presenting unique opportunities for the industry.

Even though entering these markets comes with its set of challenges, including cultural differences, the potential for growth is significant.  For gaming companies, capitalizing on the mobile gaming trend and tailoring experiences to meet local preferences could unlock success in these dynamic markets.

·       Threats

o   Intense Competition: The competition within the gaming industry, where EA operates, is incredibly fierce, facing threats both from established companies and new entrants. Increasingly, large technology companies are investing in interactive entertainment, which could challenge EA’s market share. To ensure its products remain appealing and retain gamers, EA needs to continuously innovate and develop better technology.

o   Market Fluctuation: The volatility of the entertainment market represents another threat to EA. This industry is particularly sensitive to rapid changes in consumer preferences and technological disruptions. EA’s reliance on a few popular franchises makes it vulnerable to shifts in market trends, which could lead to fluctuations in revenue and profitability. As gaming evolves, EA must stay ahead of consumer tastes, which can swiftly change due to new gaming experiences or technological advancements. 

o   Secondary Market: The resale of used games can impact new game sales, affecting EA’s revenue from newer titles. While digital distribution has mitigated this issue somewhat, the existence of a vibrant second-hand market still represents a potential threat to direct sales, especially for physical copies of games.

Reference: 

Grand View Research. (2023). Video game market size, share and Growth Report, 2030. Video Game Market Size, Share And Growth Report, 2030. https://www.grandviewresearch.com/industry-analysis/video-game-market

GuruFocus Research. (2024, February 26). Decoding Electronic Arts Inc (EA): A strategic swot insight. Yahoo! Finance. https://finance.yahoo.com/news/decoding-electronic-arts-inc-ea-050830060.html

Hewish, C. (2023, August 22). Council post: Shaping the future of gaming. Forbes. https://www.forbes.com/sites/forbestechcouncil/2023/08/21/shaping-the-future-of-gaming/?sh=4b10e66d7e08

Morran@themorrancave, C., & Morran, C. (2013, April 9). EA makes Worst Company in America history, wins title for second year in a row!. Consumerist. https://consumerist.com/2013/04/09/ea-makes-worst-company-in-america-history-wins-title-for-second-year-in-a-row/

Shastri, A. S. (2023, September 2). Detailed SWOT analysis of Electronic Arts – 2024. IIDE. https://iide.co/case-studies/swot-analysis-of-electronic-arts/

Why does everyone hate ea? why do they love their games?. Quora. (n.d.). https://www.quora.com/Why-does-everyone-hate-EA-Why-do-they-love-their-games