Getting Its Game On

A report from the past.

When we profiled Electronic Arts last year, ("Playing to Win," December 2002), the game maker was frantically preparing for the upcoming holiday season when video games usually fly off the shelves. EA, the industry's biggest player, had high hopes for its online version of The Sims, the best-selling PC game of all time, as well as sequels to a string of popular franchises from Madden NFL to Harry Potter, and new games, including one based on the Lord of the Rings movies.

The sequel-heavy strategy may be overly derivative for EA's critics, but it continues to produce hits for the company. In fiscal year 2003, EA once again had more best-sellers (over 1 million copies each) than any other game maker: 22, up from 16 in 2002. Five titles sold at least 4 million copies each. Madden NFL 2004 alone hit 2 million in just three weeks.

Not surprisingly, EA's annual revenue shot up 44% to a hefty $2.5 billion. And the stock price reached record heights, doubling in the first ten months of 2003. But one notable disappointment was The Sims Online. Despite all the hype, it failed to deliver the audience (less than 100,000 players in its first year)--and subscription fees--EA expected. Nevertheless, the company remains convinced that online gaming is the next big thing. In August it launched EA Sports Nation, an online gaming site, which seems like a better bet. While fans of The Sims prefer to experience the game alone, fans of Madden NFL and other sports games relish going helmet to helmet against one another. Within weeks, this burgeoning nation had 200,000 players and counting.

This holiday season EA is counting on another round of sequels, featuring more impressive digital wizardry than last year's iterations. And why not? The success of these games has almost become predictable, even as the real world that inspires some of them seems less predictable than ever. As the NFL and NHL seasons got under way, Madden 2004 cover boy Michael Vick was sidelined with a broken leg, and NHL 2004 cover boy Dany Heatley was facing charges of first-degree vehicular homicide.

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