Electronic Arts in Online Gaming

Presented by Group 6

AHANA AYUSH DIBYA SAUMYA SREYAS

 CASE FACTS

Sony's PS2 experimented with convergence via "Eye Toy" and PSX, combining a PS2,
digital video recorder, DVD recorder, and TV tuner. Sony worked on a secret PS3
chipset rumored to handle over 1 trillion calculations per second.
PS2 online gaming, according to Andrew House, didn't promise revenue under a
pay-for-play model. Middleware providers like GameSpy and "Butterfly Grid"
created networks for online gaming, supporting smaller developers. Microsoft's
Xbox, designed for online gaming, introduced Xbox Live for content sales.
Xbox's convergence potential was hindered by its smaller base and game library
compared to the PS2. EA's support for PS2 online gaming reflected disagreement
with Xbox Live's model, said CEO Lawrence Probst. EA's exclusive development of
online features for PS2 marked a shift from its platform-agnostic approach.
Console makers managed proprietary platforms, with games incompatible across
rival systems. Online gaming attracted new players like broadband providers and
middleware developers, investing heavily in consumer adoption.
The Xbox unit has incurred substantial
cumulative operating losses, with Microsoft
losing over $120 on each console sale.
Despite these losses, the investment in the
Xbox unit can be justified due to the long-
term strategic vision of Microsoft.
The company aims to establish a strong Xbox unit has huge
presence in the video game industry and cumulative operating
believes that the Xbox platform, coupled losses. Is this
with the Xbox Live online gaming network, investment justified?
will provide a significant competitive
advantage in the evolving digital
entertainment landscape.
Microsoft's deep pockets and commitment to
the video game business indicate a long-
term investment strategy, with the
expectation of recouping losses and
generating profits in the future.
Video game platform providers choose to sell
consoles at breakeven or loss-making prices,
profiting instead from royalties charged to
game publishers due to the strategic
importance of establishing a large user base Why do video game
for their platforms. platform providers
By offering consoles at competitive prices, choose to sell consoles
platform providers can attract a larger at breakeven or loss
consumer base, thereby creating a larger making prices,
market for game publishers.
profiting instead from
This strategy allows platform providers to
generate revenue through royalties from royalties charged to
game sales, subscription fees for online game publishers?
services, and other related revenue streams.
Additionally, a larger user base can lead to
network effects, driving further adoption of
the platform and increasing the potential for
long-term profitability.
Console-based gaming is expected to
emerge as a mass-market phenomenon, with
the potential for significant growth in the
future.
The industry observers anticipate that the
Will console-based
console-based online gaming market will
gaming emerge as a
experience substantial penetration in the
next console cycle. mass market
The importance of network effects in this phenomenon? How
context cannot be understated, as a larger important will network
user base will lead to increased engagement, effects be?
more game titles, and a richer online gaming
experience.
As a result, network effects will play a
crucial role in driving the mass-market
adoption of console-based gaming, creating
a self-reinforcing cycle of growth and user
engagement.
Electronic Arts (EA) holds significant
importance to Microsoft's success in online
gaming.
As a major player in the video game industry,
EA's participation and support are crucial for
the growth and sustainability of Microsoft's
online gaming initiatives, particularly the How important is EA to
Xbox Live network.
Microsoft's success in
EA's expertise in marketing, distribution, and
online gaming?
game development, coupled with its strong
portfolio of popular game titles, can
significantly enhance the appeal and
competitiveness of the Xbox Live platform.
EA's decision-making regarding its
involvement in online gaming, including its
partnership choices and strategic direction,
can influence the overall success of
Microsoft's online gaming efforts.