Business Breakdowns
Episode 106 Electronic Arts: FIFA, The Sims, Madden and More
Business Breakdowns

Episode 106: Electronic Arts: FIFA, The Sims, Madden and More

Business Breakdowns

Episode 106

Electronic Arts: FIFA, The Sims, Madden and More

The 10th Man is the author of a popular investing blog. We cover the relationship between game developers and publishers, how exclusive licensed content makes EA Sports so powerful, and how monetization models are changing in the industry.

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(00:02:18) - (First Question) - EA’s role as a video game publisher within the broader industry

(00:05:06) - EA’s size and scale today compared to its competitors 

(00:08:15) - The founding story and the company’s background

(00:16:12) - The impact of licensing agreements with sports games like Madden and FIFA

(00:28:31) - The proportion of their games made for mobile, console, and PC

(00:32:29) - Economics of a typical new game development and launch

(00:34:38) - Expected lifespan of a game or its peak popularity

(00:35:57) - How the industry is shifting from up-front sales to in-game sales

(00:38:19) - The cost of keeping games up to date and working properly

(00:40:00) - Working with third-party game engines versus developing a proprietary engine

(00:44:45) - In-game purchases like loot boxes and the legal risks of being deemed gambling

(00:48:26) - The video game M&A landscape and a discussion of Microsoft and Activision

(00:50:19) - How EA uses a subscription model to unlock value from their back catalog

(00:51:43) - Hypothetical top-line growth in the future and the bull case for EA

(00:55:48) - Lessons for builders and investors when studying EA’s story

Electronic Arts: FIFA, The Sims, Madden and More

Introduction

Matt
This is Matt Reustle and today, we are breaking down the iconic video game publisher, Electronic Arts. EA's corporate history dates back to the 1980s and the business has evolved with all of the industry shifts in the decade since. To break down EA, I am joined by the author of The 10th Man blog. We cover the role of a publisher in the video game ecosystem, the history and dynamics behind crown jewels like FIFA and Madden, and what the growth in mobile and new forms of monetization mean to a business like EA. Please enjoy this breakdown of EA.

EA's Role in the Overall Gaming Landscape

Matt
All right. I am excited to break down EA, Electronic Arts. I have a lot of personal experience with EA when many people were coming of age, going out, socializing, meeting new friends, I was typically in my basement playing Madden or playing some other video game, not socializing, not making friends. But I must say, amidst all of that, I'm not sure that I actually understood exactly what EA's role was in the video game atmosphere. So maybe you could just help explain that right off the top. What does EA actually do as a publisher of video games?

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