Strengths.
- Strong brand equity and awareness in the video gaming industry, due to the longevity and durability of the company.
- Diversity of games (sports, racing, shooter genres).
- EA had #1 or #2 share on every major video game console for 2004, and was solidly #1 in terms of share for PCs.
Weaknesses.
Their software relies upon the platform that are created by companies such as Sony, Microsoft, Nintendo, etc.
2005 brought a 6 percent increase of net revenue, but a 12 percent decrease in net income. As of May 2005, EA had at least 25 games under development for next-generation systems, all of which would not be able to generate any revenue until November 2005, at the earliest.
Opportunities.
- Growing mobile & portable gaming .
- Growing online gaming & retail space.
- Gaming based online community.
- Increasing investments in new games for the next generation of consoles.
Threats.
- EA's competitors employ similar strategies to them because of it's effectiveness.
- Development costs for both current generation and next-generation games are rising significantly.
- Price competition was especially fierce in some of EA's core genres, such as sports games.
- Yahoo! Games and MSN games were major competitors in the online free and pay-to-play games.
Innovation & Disruptive Technology.
Firms often face problems with complacency and lack of innovation, and in a vicious industry, such as the video game industry with several growing segments, companies must constantly innovate to keep up with their competitors. In the article Darwin and the Demon, the author states that, "the most common mistake executive teams make when they seek to introduce change is leaving legacy structures untouched. " Old processes need to be changed, and the company needs to invest in innovations to remain competitive. One way companies can capitalize on innovations is explained in the innovation life cycle. .
A disruptive innovation is an innovation that helps create a new market and value network.