Electronic Arts the Blockbuster Strategy

Electronic Arts: Blockbuster Strategy The purpose of this paper is to write an Internal Analysis on the Electronic Arts, the Blockbuster Strategy and identify the problems and concerns of the company as well as company resources and the company's competitive advantage. Further to pinpoint the company's business strategy, assess the company's performance and offer an possible recommendations for the addressing of said problems.

Blockbuster, a major video rental chain has a strategy that appears like that of a "specialty game store" and this has opened up an entirely new marketing and sales field in the industry. In the quarterly earnings report for June 30, 2003. A sales of $58.5 million was reported by Blockbuster and that was incidentally, triple the sales for the same quarter in the preceding year. A total of 21.3% of Blockbuster's sales in merchandise was attributed to video game sales.

Business was not only good for Blockbuster but for other video game retailers Movie Gallery and Hollywood Video. During that same quarter Hollywood Video reported an 11% increase from direct sales of games.

The factor of having more than "just video rentals" the "blockbuster" strategy offers a: Store within a store" is key to success in this channel....these rental chains are making sure that gamers understand that they are serious about games," (Arioco, J 2003) Competitive Advantage: CEO and Chair for Blockbuster, John Antioco stated that the Blockbuster chain has decided on plans in opening 200 "Games Stations" in the U.S.

And overseas stating further that: We now believe we have a business model that will provide extremely high ROI." Antioco further believes that several thousand of the complete total of 8000 Blockbuster stores have: Plenty of square footage as well demographic requirements, reliance on low capital investment with expected "very, very high rates of return." Video rental chains such as Blockbuster have great advantage in dealing with the mass consciousness.

The attraction of game sales as well as the customer interaction are some of the advantages that these rental chains have as compared to mass retailer and those businesses in the venue of specialties. There exists "untapped marketing" in this area. The strategy of the deliberate "stocking of expert" customer assistance is one of used by the "blockbuster" EA businesses demonstrated in their hiring of "expert gamers" as store clerks.

More mature strategies: fewer titles, greater emphasis on retail pre-orders, widespread cross marketing deals, more creative grassroots.' appeal characterize games marketing plans at both large and small publishers of electronic games. " (Geistman, B. 2003) Mr. Geistman goes on to state that: They are a great place for marketing for having product on the shelf." "In fact, the marketing possibilities for game sales in video stores remains virtually undiscovered. Competitors: Stiff competition from other game specialty stores. With low investment, these game areas can prove to be lucrative.

Blockbuster inserted a page from specialty stores but included "game trading and pre-played re-sales in the model." Challenges, Suggestions and Conclusion: The games are quite pricey and this does seem to be a negative factor however there is something of a much larger impact under consideration of all those in the "Electronics Art" industry, and indeed any establishment that is structured in the "blockbusters strategic" business environment.

The main problem faced by Blockbusters, Movie Gallery, Hollywood Video and indeed the entire industry of "Electronics Art" of the "blockbusters" strategy are focused intently in observation of the actions of Microsoft which has left serious doubts concerning Microsoft's capacity to serve as game box provider for the "EA." The prospect has began to appear a bit gloomy, due to the fact that Microsoft is not cooperative in marketing strategies, demonstrated by Microsoft's tight grip on the rein in attempt to control game features as well as disinterest in retaining good customer relations.

Further Microsoft's failure to cooperate in provision of subscription access in coordination with publishers has put a sour taste on the deal. However, there are solutions for this structure of organization implementing this strategic process. The good news is that Sony, the rival of Microsoft has offered terms on the Playstation2 games that EA finds to be completely acceptable. The "blockbuster" strategic marketing method is one that will not easily be predicted until intellectual law has become.