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A (Brief) History of EA

EA’s has had its hand in the gaming industry since the beginning, and a quick peek into this company’s past could help predict not only its future, but the future of esports.

EA
Courtesy of EA

Few know that EA was founded by an Apple employee. Trip Hawkins was the Director of Strategy and Marketing for Apple in ‘82 until he left to start EA. Founded on May 27th, 1982, EA would be the leader in shifting worldwide game focus from single-person to multi-team projects. The shift was popular, and the partnership of John Madden (Yes, that one) would see the company producing a Madden game almost every year afterwards (Even though every “new” Madden game is basically a copy-paste with a few tweaks to gameplay and style.)

With their success in the gaming industry, it was only a matter of time before the company would start to butt heads with other well-known names like Sega and Nintendo. In the ‘80s, both Nintendo and Sega had extremely strict licensing policies, including extremely high-rate royalties for games sold on their systems. EA, wanting to get around this policy, saw Hawkins contracting out a third party to practically reverse-engineer the Sega Genesis. This would allow EA to start publishing games for the new console, even if they were unofficial.

An important thing to note is that EA did all of this legally. So, when EA up and confessed to Sega, they basically told them, “Try and sue… or just reduce our rates.” It actually worked, mainly because Sega was paranoid that all their information and tech for the Genesis would be sold out, which would nab EA money anyway. Not only did Sega agree to reduce the rates, but they even agreed to enter a partnership with EA.

Trip Hawkins. Courtesy of Bizjournals.com

Hawkins wouldn’t step down as CEO of EA until ’91, at which point Larry Probst was appointed CEO and Hawkins shifted focus to his new start-up named 3DO, which would later fail. During Hawkins’ time as CEO, EA only developed and published 12-to-13 games on their own, acting primarily as a publisher for other devs.

At first, 3DO was involved with EA, but after 3DO developed lagging sales and policies that only hurt the company, EA was forced to drop them to maintain longevity. From there, EA started to focus more on both developing and publishing their own games, and their number of games created rose from just 12/13 games total in Hawkins time to well over 100 during Probst’s reign. In fact, after dropping 3DO from their support list, Probst would later deliver a high-performing partnership with Playstation, leading to a plethora of titles that are still played today.

When Probst stepped down in 2007, he selected John Riccitiello as his successor. Riccitiello’s time as CEO would cement EA’s modern-day greedy practices and mark the first time the company faced serious financial trouble since its start in ‘82. Riccitiello wanted to increase the productivity down the streamline which would’ve helped get more games out to the market faster. To do this, Riccitiello proposed the company “Buy and assimilate” smaller studios. EA wasn’t a stranger to this, seeing how they did this to many smaller software companies during their infancy. Here, the idea was to buy up much smaller creative studios and allow their own workers to face layoffs once profits began to dip south.

John Riccitiello. Courtesy of The Wall Street Journal

Riccitiello would regret this, dubbing it a mistake after an unintended side-effect saw creative workers stripped from the studios, severely limiting capabilities of game development. During this time, even though major titles like Crysis and Battlefield 2142 would hit the market, EA would lose $641 million dollars in the market crash of ’08. This forced them to close down 12 facilities and lay off 1,500 employees, a total of 17% of the company’s entire workforce.

In 2011, EA gained over $3 billion in profit and managed to maintain a good track record profit-wise until Riccitiello left in 2013.  During the final years of Riccitiello’s time, EA would face issues with Steam over licensing, refusing the platform to upload any games until 2019 and missing out on big business in the process.

When Riccitiello left in March of 2013, it wasn’t until September of that year that Andrew Wilson took on the role of CEO. EA would lay off another 10% of its workforce and partner with Disney for Star Wars before Wilson’s control. EA wanted to diversify their portfolio and started working on newer IPs with smaller teams while maintaining focus on making Battlefront II more profitable with loot boxes, directly causing multiple anti-gambling laws to be enacted around them.

A loot box. Courtesy of The Verge

Since then, another 4% (350 people) of EA’s workforce has been cut. This was dubbed necessary for the company to survive and prepare for the COVID-laden road ahead.

With such a long history of buying and assimilating, it’s good to see EA start a more direct approach to customer sales. Every company is trying to create a “Netflix but for video games” phenomena; at the very least, they’re trying to catch up to Microsoft’s GamePass library. Despite its history of copy-and-pasted sports games, the huge titles they’ve pumped out in recent years don’t show any signs of slowing down. With their new partnership with Steam mirroring their profitable stint with Sega way back when, this company doesn’t look like it’s slowing down. Mark my words: EA’s going to remain an esports titan for a long, long time.

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