A Short History of Electronic Arts

The game company known for ruthlessly guarding its market dominance through franchise purchase and protection -- though it began life with a noble mission to foster and reward 'art'

After the Activision story, the tale of EA may sound kind of familiar – but its vastly amplified and simplified. When Trip Hawkins founded EA, he did it under the then-novel premise of an independent publisher; EA would run no internal studios, would produce no development of its own. Instead it would scout out, publish, and distribute the work of outside developers, operating under the early Activision principle of promoting programmers and designers nearly as much as the games they developed.

The name itself (based in part on United Artists) is telling; EA existed to proselytize the burgeoning art of electronic games; to act as a popular outlet for the voiced, yet scattered and unheard "software artists".

If anything, EA was positioned as – from a certain perspective – an improvement upon Activision's founding ideals, out record-labeling the record producer even down to the packaging. Whereas Activision served to broadcast the names and statements of its own – of the disgruntled superstars of bestsellers past – Trip Hawkins wanted to dig up new talent; to act as a sort of equalizer so your future Richard Garriots would have somewhere to turn. And hey, if those future talents happened to hit it off and make EA a bundle of money – then... well!

Indeed, EA started off well enough. In 1982, Hawkins left Apple Computer (formed in part thanks to Atari; see "Five that Fell" on this site), taking along several of his coworkers to staff his new venture. The initial plan, later put fully into gear by Larry Probst, was to sell directly to retailers – again an unprecedented idea – rather than work through a third party, the idea being that, as a professional conduit of other people's work, EA needed the best profit margins and market know-how in the business. The trade-off was that EA promoted its artists to the teeth and shared a large chunk of the profits.

Successful Donkey

Beyond promising, EA's initial 1983 software lineup has become legendary: Archon, Pinball Construction Set, and M.U.L.E, along with the successful Donkey Kong knock-off Hard Hat Mac and a lesser-known worm-training game.

For the next few years, EA would continue much in this vein, offering its distribution services to other publishers (EA didn't put out enough games to maintain its channels alone) and irritating figures such as Richard Garriot due to what he perceived as a focus on showy marketing over quality product. Regardless, through the mid '80s EA would release such landmarks as Seven Cities of Gold, The Bard's Tale, Starflight, and Wasteland. EA began to experiment with licenses, especially celebrity-based ones – especially sports-based ones. And then... something strange began to stir. Despite all its early proclamations, EA began to get the artistic itch itself.

The result, in 1987, was Skate or Die! – a sort of a cross between Summer Games and 720°, taking the Olympic format of the former and the stylization and catch phrase from the latter. And it wasn't bad! Getting ported to the NES by Konami a full year before 720° hardly hurt, either. Speaking from my own experience, all the kids just assumed it was the NES port of their favorite arcade game from last summer. Surreptitious, though not altogether undeserved, win for EA. Since no one really complained, EA took silence as a blessing and forged ahead. Slowly, over the next few years, EA began to move more development in-house.

Around 1990, EA decided it wanted a part of Sega's new console, and yet – like Accolade (and Atari Games with the NES, before them both) – they didn't care for Sega's licensing fees, preferring to manufacture their own cartridges. A few legal threats later, EA and Sega worked out a deal, though EA continued to manufacture its own oddly-shaped cartridges – and it is within these cartridges, combined with EA's experience with celebrity sport licenses, that EA hit its true goldmine.

Repackage essentially the same game year after year, adjusting its roster and adding a few mechanics to stay current, and sell it for full price over and over – it was a whole new model for game publishing. Both disposable and mass-market; buy it one year, you have to buy all of the upgrades if you want to stay current.

In 1991, before this circus got on the road, Trip Hawkins left to follow a new muse (one the world would soon know as the 3D0), leaving his company in the very rational hands of Larry Probst. At the time it seemed a reasonable business decision; Hawkins was more a game developer than a businessman, and after a decade his original ideals were making overt growth harder and shareholders impatient – so Probst knew exactly what to do.

Acquisitions Frenzy

No sooner was Hawkins out the door than the acquisitions (and Madden milking) began. The first came in 1991, with Stunts developer Distinctive Software (later to become SSX and NBA Live studio EA Canada). A year later, fate frowned on Origin; Probst picked them up and set 'em under the eye of Distinctive founder Don Mattrick, who applied a strict discipline whether required or not.

Some staff began to draw conspiracies, or at least detect a conflict of interest, due to the shared resources between Origin and Mattrick's own EA Canada: the less for one, the more for the other. The battles here are many and famous, Mattrick enforcing a policy of big blockbuster games over small, reasonably profitable projects, then holding the blockbusters to an impossible schedule.

The strained relationship with Origin presages a decade-long streak of what could easily be called ruthlessness. In 1995 EA bought out Bullfrog, another wunderkind-led brainstorm house; within two years, its chief Peter Molyneux left to start a new studio, complaining of similar interference; by 2001 Bullfrog was closed.

After Bullfrog, the acquisitions went into rapid fire, at least one a year, nearly every year: Lost in L.A. developer Manley & Associates (1996); Maxis (1997); Westwood and Tiburon (1998); pioneering online developer Kesmai (1999); Dreamworks Interactive (2000); former Sega Sports studio Black Box (2002); racing game developer Studio 33 and PC port master NuFX (2003); Criterion (2005); and three more studios this year: JAMDAT Mobile, Mythic, and DICE.

Tallying in spin-off studios, that's an average of 1.2 acquisitions a year since 1991 – half that, within the current hardware generation. Of the total, one-third have since been closed – all, again, within the past five years. All save Origin, Bullfrog, Maxis, and DICE have been renamed after their parent company, either in part or in whole.

The pattern to these acquisitions, if not universal, is infamous: find a company that made a really popular game, acquire the company and its properties; then set the team on churning out sequel after sequel to the game in question. Sometimes, likely not by design, the staff leaves or burns out, or one of the products sells poorly; the studio is closed or subsumed. Of EA's acquisitions, only Maxis is known for retaining its autonomy and culture within the EA corporate structure, the jewel in EA's crown.

EA seemed to have abandoned all of its founding principles and developed an attitude of rapid growth whatever the long-term cost, thereby setting a poor example for the rest of the industry. But it's not all bad news. The firm has set its sight on growth through creativity, and has been forced to come to terms with the costs of its own ambitions.

Thanks in part to Erin Hoffman and a high-profile class action lawsuit, that overtime business in particular (90-hour weeks, no compensation) has come under close scrutiny, bringing Larry Probst's EA into a critical light. When, therefore, EA decided to buy up 20% of one of its closest rivals, freaking out Ubisoft, everyone's eyes were turned to EA, glaring, almost daring them to take the next step – a step which has, as yet, not manifested itself…

Hunker Down

There is a balancing force to the world. When things get a little bad, people hunker down and wait for better times. When things get worse, they say that's just the way things are. But when things get ridiculous, people tend to get angry and to react. We're nearing that stage, and I think the game industry in general is in due for some really significant structural changes that will directly impact the way it will function in years to come.

When the way we make videogames changes, the way we think about making them changes alongside. And when the way we think about videogames changes, videogames themselves will start to change. And if all these changes reflect a new focus on the lives and health of the people behind the games, then that humanity will tend to come out in the end product – making for a livelier, healthier game, and game industry. When we get to this point – where we can take care of ourselves and our own – the industry will be effectively mature. And then that is when the magic will happen.

Before it's here, it's on the Bloomberg Terminal.