In our last blog, we discussed the SWOT Analysis of one of the leading videogame creators and hardware manufacturers, Nintendo. In this blog, we will be doing an in-depth SWOT Analysis of Electronic Arts.
It is one of the largest video game companies in the world by market capitalization. It is also one of the top gaming companies in the world by revenue. Electronic Art is one of the wealthiest gaming companies in the world with total assets of $11.2 billion.
It has marketed its products by focusing more on social media influencers. It can improve its marketing techniques by implementing some of the latest digital marketing techniques as most of its target audience are online users. Having knowledge of the latest digital marketing skills is very important for any business. If you want to know what is digital marketing and how to use it to your advantage – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
Thus this makes us more eager to know about the story of how Electronic Arts became the big brand it is today. So, for that, we will be doing a SWOT Analysis of Electronic Arts. But before we start with its SWOT Analysis let us learn about Electronic Arts as a Company, its products, competitors, financials, and more.
About Electronic Arts
Electronic Arts is an American Company that develops video games for Mobile phones, PCs, and Internet-connected consoles. Some of the famous video games developed by it are the Fifa series, the Sims series, the Need for Speed series, Madden NFL series, etc.
Electronic Arts Inc. was founded in 1982 by Trip Hawkins. Its ownership is public and it has its Global Headquarters in Redwood City, California. Andrew Wilson is and has been the CEO of Electronic Arts (EA) since September 2013.
Its mission is to build a company through a community of artists, storytellers, technologists, and innovators who will think of the player experience at every step and build quality and innovative products and work with integrity and operate as one team.
It is a leading company in digital interactive entertainment and had a GAAP net revenue of $5.6 billion in the year 2021. It has a market capitalization of about $41.62 billion as of 2020.
Quick Stats About Electronic Arts
|Origin||San Mateo, California, US|
|No. of Employees||9,800 (2020)|
|Market Cap||$41.62 Billion (2020)|
|Annual Revenue||$5.6 Billion (2020)|
|Net Profit||$3.04 Billion (2020)|
Products of Electronic Arts
Electronic Arts is one of the largest gaming companies in the world. It provides its customers with some of the best and entertaining games in the world. Following are some of the products that Electronic Arts provides:
- PC Games
- Console Games
- Origin Platform
Close Competitors of Electronic Arts
Electronic Arts is one of the well-known companies in the world. With such a large audience it has many competitors to face in the market. Some of the competitors of Electronic Arts are as follows:
- Valve Corporation
- Rockstar Games
- Electronic Arts
- Activision Blizzard
- Sony Computer Entertainment
- Sega Games
Now that we know about the company let us begin with the Comprehensive SWOT Analysis of Electronic Arts.
SWOT Analysis of Electronic Arts
SWOT Analysis is the study of Electronic Arts internal factors strengths, weaknesses, and external factors opportunities, threats that affect the company. It helps the company to know what are its strengths and weaknesses so that it can improve on them. It also makes you aware of the possible opportunities and threats to the company.
Let us now understand its SWOT Analysis by first starting with the Strengths of Electronic Arts.
Strengths of Electronic Arts
The company’s strengths give it a competitive edge and also are the reason for it being a leading company and the company should try to increase its strengths in order to keep growing.
- Focus on Customer Satisfaction – The company following its mission has always been focused on customer satisfaction. It has been able to achieve it among its present customers and this also positively affects the goodwill of the company in turn affecting its sales.
- Creative and Innovative Products – It has a very good record of building innovative and creative products and this allows it to be experimental with its products which have been a plus point for the company.
- Automation – It using automation has brought consistency of quality in Electronic Arts (EA) products and has enabled the company to scale up and scale down based on the demand conditions in the market.
- Highly skilled Employees – It has created highly skilled employees through successful training and learning programs. It is investing a huge amount of resources in the training and development of its employees that has resulted in building a motivated and highly skilled workforce.
- Highly successful Market strategies – The company spends more on influencers which have increased its digital sales over the last 12 months. One of its most recent and successful strategies was the FIFA Faceoff series which was a two-part game show which involved pairing celebrities with FIFA influences and members of the public to win a prize of $25,000.
Weakness of Electronic Arts
Although Electronic Arts have been a leading video games company, it still lacks in some parts which may affect its revenue and may give benefit to its Competitors. These are some of the parts where it can do better to increase its profit:
- The profitability ratio and Net Contribution – Electronic Arts (EA) are lacking and are below the industry average in profitability ratio and net contribution.
- Marketing – Although Electronic Arts have used good marketing strategies which have given it success in terms of sales, it lacks in highlighting the unique selling benefit of its products which can act as an advantage for the competitors.
- Lack of Investment in Research and Development – Even though Electronic Arts (EA) is spending more than the industry average on Research and Development, it has failed to compete with its competitors in terms of innovation.
- Gaps in the product range – There are gaps in the product range sold by the company which may give a benefit to its competitors.
- Lack of investment in new technologies – The sectors and the parts in which the company is planning to expand require more investment in the latest technology. The company’s recent investment in technology is not at par with its vision.
Opportunities for Electronic Arts
The company is in a growing industry and many other external factors act as a benefit for the company and increase its opportunities. Following are some of the opportunities for Electronic Arts:
- The new taxation policy – The new taxation policy can significantly affect the way the firms do their business and can also create new opportunities for firms like Electronic Arts(EA).
- Decrease in the cost of transportation – The decreased cost of transportation has resulted in lower shipping prices bringing down the cost incurred by the company thus giving a benefit to the company to use the saved money in the factors which it lacks or give an incentive to its loyal customers.
- Online platforms – With the world moving towards digital transformation it has largely benefited many business firms and has created an opportunity for them to reach more people through online platforms. Over the years, the company has made its online presence strong which has opened a new marketing channel for Electronic Arts (EA) which is more beneficial and affordable. It can also use this as an opportunity to interact with its customers and understand their needs.
- Growth in the Video game industry – The video game industry is growing with the increase in the number of gamers around the world. This acts as an opportunity for video game companies to use marketing strategies relevant to today’s trends to increase their sales.
Threats to Electronic Arts
The same industry whose growth may act as an opportunity also may act as a threat for the company because of the increasing competition. There are also some other threats which it faces in which the company should look:
- Growing Competition – Although there are growing gamers there is also growing competition in the Video game Industry with tech giants looking forward to entering the Industry due to its table profit and its increasing trend.
- New technologies – With new technology being developed by the competitors it acts as a threat to Electronic Arts(EA) and poses a challenge to do better than the rival.
- Increasing Isolationism – The increase in isolationism in the economy of America can result in similar reactions from the other countries. This would negatively impact its international sales.
- Increasing local distributors – It acts as a threat for the company as the competitors pay higher amounts to the Local distributors to increase their promotion and sales.
With this, we come to an end of the SWOT Analysis of Electronic Arts. This study helps the company to understand where it stands in the market and what it needs to improve and be aware of.
On the study of the SWOT Analysis of Electronic Arts, we saw that it is one of the best game developers in the world. It has trained its employees and made them some of the best in the industry which provides customer satisfaction in return. There is rapid growth in the gaming industry and the new taxation policies are opportunities for the company to grow more. Even with such positive factors, there are some flaws that affect Electronic Arts.
They have a below-average profitability ratio due to some lack of marketing tactics that can be improved. The change in technology and the higher pay from competitors to local distributors create a threat to the company. The company can use the latest digital marketing techniques which can help the company gain a larger advantage as the brand’s presence will increase in the eyes of the company and eventually they will go for their product. If you are interested in learning and upskilling, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
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