Electronic Arts Case Study

Question 1

As all industries, the video game industry is made up of both business and economic characteristics. The most important players in this industry are the suppliers and the consumers. Suppliers are made up of those who manufacture the hardware, that is, the consoles and those businesses who supply the software, the video games. There are also certain businesses who manufacture both.

The industry is made up of video game consoles, handheld players, and arcade machines; game developers, retailers of video game players and video games, and companies that have Web sites for online game play.

One vital characteristic for this sort of business are the consumers, that is, the players of video games that add up to between 250 million to 300 million people worldwide. If it wasn't for them, who the majority of them are preteens, teenagers and young adults, then enterprises in this industry would not survive.

Nintendo became the most successful in the world's...

English: A Nintendo 3DS in Aqua Blue, photo taken ...

English: An original Nintendo Game Boy.

Innovativeness is the major business characteristic that is very important for companies which make up such an industry. Sony, Microsoft and other hardware and software firms still manage to exist in the video game industry, because of the Innovative solutions they provide customers with on the market. In fact a lot of money is spent on research and development to achieve the best product to improve it upon.

During the 1990s, video game developers created increasingly sophisticated, multi-featured games that allowed players to compete in a host of sports events, pilot supersonic fighter jets and spacecrafts, and enter mystical worlds. Firms that lacked innovativeness failed to survive in this industry such as Nintendo and Sega which from 1985 to 1994 dominated the market for video game consoles, with a combined market share of 90%. Then in 1995, competitive rivalry in video games took on a new dimension when...