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We See Farther - A History of Electronic Arts
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We See Farther - A History of Electronic Arts

February 16, 2007 Article Start Previous Page 2 of 7 Next

Building the Business

Julius Erving and Larry Bird, EA's first sports celebrities.

Another early hit for EA was Doctor J and Larry Bird Go One on One. Released in 1983, the basketball game enjoyed healthy sales, boosted by the involvement of sports stars Julius Erving and Larry Bird.

"EA Sports really originated with One on One," Hawkins explained, "which I designed, and where I introduced the business practice of involving celebrities in the design and promotion of video games."

To build its business, Electronic Arts had to aggressively upset the traditional rules of software publishing. Determined to set his own terms, Hawkins reduced the discount that EA would give software distributors, keeping more of the profits for itself.

In the fall of 1984, Larry Probst joined the company as vice president of sales. Probst brought an unparalleled level of organization to EA's strategy of bypassing distributors and dealing directly with retailers, causing its already successful market presence to grow even further. With its increased sales potential, EA began to distribute games from other companies, including Lucasfilm Games, SSI, and Interplay.

The Crash

Meanwhile trouble was brewing in the world of console video games that would soon undermine the entire industry. Since its introduction in 1977, the Atari VCS/2600 home console had dominated American living rooms.

In the console’s halcyon years, Atari poured millions of cartridges into retailers, feeding a customer base that was hungry for anything new to plug in. Third-party publishers, eager to cash in on Atari’s success, blossomed in a market that seemed limitless.

However, by 1983 the machine was aging. Consumers were losing interest and there was no coherent plan for what would follow. As the market softened, the small, undercapitalized publishers were the first to die off, leaving retailers little choice but to drastically discount unsold cartridges that they had previously been able to return for credit.

This brought about an accelerating chain reaction of price cuts across the board and vast warehouses of unsold merchandise soon piled up. By the end of 1984 the implosion was complete. Retailers were burned out, publishers were decimated, and customers walked away, leading many to believe that video games were just a fad whose time had passed.

The stink lingering over the video game industry was so bad that it spread to personal computers as well.

"Atari's meltdown created a tsunami that wiped out public interest in games, retail support, media interest, and gave gaming a stigma that lasted a decade," Hawkins remembered.

The Eighties

Electronic Arts was forced to revise their business plan in order to weather the lean years following the crash.

"I made a conscious decision to ignore Atari and to focus on the next generation of technology," Hawkins said. "We had to operate like the Fremen of Dune, recycling our own saliva to live in the desert, to survive. We had to rebuild the industry brick by brick over a period of years."

1988's Wasteland, an early RPG from EA

Although EA’s original marketing had focused on promoting individual game designers, the company quickly realized that consumers were more attuned to the games themselves. Designers were still credited, but EA’s marketing shifted in favor of game genres and building brand recognition.

The success of One on One taught EA the power of tying popular sports figures to game properties and a series of licensed sports games followed, including Jordan vs. Bird: One on One, Ferrari Formula One, Richard Petty’s Talladega, and Earl Weaver Baseball.

As it grew, Electronic Arts built a diverse catalog of games over the 1980’s. Titles were produced across multiple computer platforms, from the Apple II and Macintosh, to the Amiga, Commodore 64, IBM PC, Atari 800, and Atari ST. Some of the highlights included The Bard’s Tale, Wasteland, Starflight, and Chuck Yeager’s Advanced Flight Trainer. EA even branched out into productivity software, publishing Deluxe Paint, one of the key applications for the Amiga computer.

Initially, Hawkins had little regard for the wounded console market, and felt that the personal computer would be the dominant entertainment platform of the future. However, as the Nintendo Entertainment System brought some stability back to the business, EA began its first in-house development with Skate or Die, which was published by Konami in 1988. Electronic Arts itself would not truly begin publishing console games until the era of the Sega Genesis.

"Once we were publishing for Genesis, we did go back and publish a few titles for NES, like Skate or Die 2," said Hawkins. "But it was a token effort. We did a lot more titles for SNES later on when it came out, but the Genesis was the real focal point, because I negotiated such a favorable deal."

EA developed both Skate or Die and Will Harvey's The Immortal for the original Nintendo Entertainment System.

Hawkins was cautious in dealing with Nintendo, seeing their strict licensing terms as an impediment to EA’s profits. He also felt that Nintendo's 8-bit hardware was underpowered.

"Because we had been 100% on floppy-disc based computers with more RAM and full keyboards, our technology base was well above the consoles," he explained.

Article Start Previous Page 2 of 7 Next

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