Electronic Arts
Electronic Arts Inc. is an American video game company headquartered in Redwood City, California. Founded in May 1982 by former Apple employee Trip Hawkins, the company was a pioneer of the early home computer game industry and promoted the designers and programmers responsible for its games as "software artists". EA published numerous games and some productivity software for personal computers, all of which were developed by external individuals or groups until 1987's Skate or Die! The company shifted toward internal game studios, often through acquisitions, such as Distinctive Software becoming EA Canada in 1991.
Into the 21st century, EA develops and publishes games of established franchises, including
Army of Two, Battlefield, Command & Conquer, Dragon Age, Dead Space, Mass Effect, Medal of Honor, Need for Speed, Plants vs. Zombies, The Sims, Skate, SSX, and Star Wars, as well as the EA Sports titles College Football, Dirt Rally, FC–''FIFA, Madden NFL, NASCAR, NBA Live, NHL, PGA, UFC, and WRC''. Since 2022, their desktop titles appear on the self-developed EA App, an online gaming digital distribution platform for PCs and a direct competitor to Valve's Steam and Epic Games' Store. EA also owns and operates major gaming studios such as BioWare, Battlefield Studios, and Respawn Entertainment.
EA announced plans for a leveraged buyout and will become privately owned by the Saudi Arabia Public Investment Fund, Silver Lake and Affinity Partners for $55 billion in September 2025, including $20 billion in debt equity. If completed, it would be the largest leveraged buyout to date. The deal is expected to close by June 2026, pending regulatory approval and shareholder agreement. A regulatory filing in Brazil revealed the PIF would own 93.4%, Silver Lake 5.5% and Affinity 1.1%.
History
1982–1991: Trip Hawkins era, founding, and early success
had been an Apple Inc. employee since 1978, at a time when the firm had only about fifty employees. Over the next four years, the market for home personal computers skyrocketed. By 1982, Apple had completed its initial public offering and become a Fortune 500 company with over one thousand employees. In February 1982, Hawkins arranged a meeting with Don Valentine of Sequoia Capital to discuss financing his new venture, Amazin' Software. Valentine encouraged Hawkins to leave Apple, where the latter served as Director of Product Marketing, and allowed Hawkins to use Sequoia Capital's spare office space to start the company. Trip Hawkins incorporated and established the company with a personal investment of an estimated on May 27, 1982.For more than seven months, Hawkins refined his Electronic Arts business plan. With aid from his first employee, Rich Melmon, the original plan was written, mostly by Hawkins, on an Apple II in Sequoia Capital's office in August 1982. During that time, Hawkins also employed two of his former staff from Apple, Dave Evans and Pat Marriott, as producers, and a Stanford MBA classmate, Jeff Burton from Atari for international business development. The business plan was again refined in September and reissued on October 8, 1982. By November, the employee headcount rose to 11, including Tim Mott, Bing Gordon, David Maynard, and Steve Hayes. Having outgrown the office space provided by Sequoia Capital, the company relocated to a San Mateo office that overlooked the San Francisco Airport landing path.
When he incorporated the company, Hawkins originally chose Amazin' Software as their company name, but his other early employees of the company universally disliked the name; as a result, the company changed its name to Electronic Arts in November 1982. He scheduled an off-site meeting in the Pajaro Dunes, where the company once held such off-site meetings. Hawkins had developed the ideas of treating software as an art form and calling the developers "software artists". Hence, the latest version of the business plan suggested the name "SoftArt". Hawkins and Melmon knew the founders of Software Arts, the creators of VisiCalc, and thought their permission should be obtained. Dan Bricklin did not want the name used because it sounded too similar to Software Arts; however, the name concept was liked by all the attendees. Hawkins had also recently read a bestselling book about the film studio United Artists and liked the reputation that the company had created. Hawkins said everyone had a vote, but they would lose it if they went to sleep.
Hawkins liked the word "electronic", and various employees had considered the phrases "Electronic Artists" and "Electronic Arts". When Gordon and others pushed for "Electronic Artists", in tribute to the film company United Artists, Steve Hayes opposed, saying, "We're not the artists, they are..." This statement from Hayes immediately tilted sentiment towards Electronic Arts and the name was unanimously endorsed and adopted later in 1982. He recruited his original employees from Apple, Atari, Xerox PARC, and VisiCorp, and got Steve Wozniak to agree to sit on the board of directors. Hawkins was determined to sell directly to buyers. Combined with the fact that Hawkins was pioneering new game brands, this made sales growth more challenging. Retailers wanted to buy known brands from existing distribution partners. Former CEO Larry Probst arrived as VP of Sales in late 1984 and helped expand the already successful company. This policy of dealing directly with retailers gave EA higher margins and better market awareness, key advantages the company leveraged to leapfrog its early competitors.
Promoting its developers was a trademark of EA's early days. Games were sold in square packages modeled after album covers. Hawkins thought the packaging would both save costs and convey an artistic feeling. EA routinely referred to their developers as "artists" and gave them photo credits in their games and full-page magazine ads. Their first such ad, accompanied by the slogan "We see farther," was the first video game advertisement to feature software designers. EA shared lavish profits with their developers, which added to their industry appeal.
In the mid-1980s, Electronic Arts aggressively marketed products for the Amiga, a home computer introduced in 1985. Commodore had given EA development tools and prototype machines before Amiga's actual launch. For Amiga EA published some notable non-game titles. A drawing program Deluxe Paint and its subsequent versions became perhaps the most famous piece of software available for Amiga platform. In addition, EA's Jerry Morrison conceived the idea of a file format that could store images, animations, sounds, and documents simultaneously, and would be compatible with third-party software. He wrote and released to the public the Interchange File Format, which soon became an Amiga standard. Other Amiga programs released by EA included Deluxe Music Construction Set, Instant Music and Deluxe Paint Animation. Some of them, most notably Deluxe Paint, were ported to other platforms. For Macintosh EA released a black & white animation tool called Studio/1, and a series of Paint titles called Studio/8 and Studio/32.
Relationships between Electronic Arts and their external developers often became difficult when the latter missed deadlines or diverged from the former's creative directions. In 1987, EA released Skate or Die!, their first internally developed game. EA continued publishing their external developers' games while experimenting with their internal development strategy. This led to EA's decision of purchasing out a series of companies they identify as successful, as well as the decision to release annualized franchises to cut budget costs. Because of Trip Hawkins' obsession of simulating a sports game, he signed a contract with football coach John Madden that led to EA's developing and releasing annual Madden NFL games.
In 1988, EA published a flight simulator game exclusively for Amiga, F/A-18 Interceptor, with filled-polygon graphics that were advanced for the time. Another significant Amiga release was Populous developed by Bullfrog Productions. It was a pioneering title in the genre that was later called "god games". In 1990, Electronic Arts began producing console games for the Nintendo Entertainment System, after previously licensing its computer games to other console-game publishers.
On March 26, 1990, Electronic Arts filed for an IPO at the NASDAQ stock exchange and went public under the ticker symbol "ERTS", opening at a split-adjusted price of $0.52. The symbol was changed to "EA" on December 20, 2011.
1991–2007: Larry Probst era, continuous expansion, and success into the new millennium
In 1991, Trip Hawkins stepped down as EA's CEO and was succeeded by Larry Probst. Hawkins went on to found the now-defunct 3DO Company, but still remained EA's chair until July 1994. In October 1993, 3DO developed the 3DO Interactive Multiplayer, which at the time was the most powerful game console. Once a critic of game consoles, Hawkins had conceived a console that unlike its competitors would not require a first-party license to be marketed and was intended to appeal to the PC market. Electronic Arts was the 3DO Company's primary partner in sponsoring their console, showcasing on it their latest games. With a retail price of US$700 compared to its competitors' $100, the console lagged in sales, and with the 1995 arrival to North America of Sony's PlayStation, a cheaper and more powerful alternative, combined with a lower quality of the 3DO's software library as a backfiring of its liberal license policy, it fell further behind and lost competition. Electronic Arts dropped its support for 3DO in favor of the PlayStation, 3DO's production ceased in 1996 and, for the remainder of the company's lifetime, 3DO developed video games for other consoles and the IBM PC until it folded in 2003.In 1994, Electronic Arts and THQ signed a licensing agreement to develop and release EA's titles, like John Madden Football, FIFA International Soccer, Shaq Fu, Jungle Strike and Urban Strike for various consoles. In 1995, Electronic Arts won the European Computer Trade Show award for best software publisher of the year. As the company was still expanding, they opted to purchase space in Redwood Shores, California in 1995 for construction of a new headquarters, which was completed in 1998. Early in 1997, Next Generation identified Electronic Arts as the only company to regularly profit from video games over the past five years, and noted it had "a critical track record second to none". In 1999, EA replaced their long-running Shapes logo with one based on the EA Sports logo used at the time. EA also started to use a brand-specific structure around this time, such as names like Westwood Studios, Maxis, Jane's Combat Simulations and Bullfrog Productions, as well as the short-lived label Gonzo Games with the main publishing side of the company rebranding to EA Games in 2000. The EA Sports brand was retained for major sports titles, the new EA Sports Big label would be used for casual sports titles with an arcade twist, and the full Electronic Arts name would be used for co-published and distributed titles. EA began to move toward direct distribution of digital games and services with the acquisition of the popular online gaming site Pogo.com in 2001. In 2009, EA acquired the London-based social gaming startup Playfish.
In December 1997, Electronic Arts ended their Japanese publishing joint-venture with Victor Entertainment, entitled Electronic Arts Victor, and purchased out Victor's 35% stake in the venture. On May 1, 1998, Electronic Arts announced the formation of two joint-ventures with Square. The first; Electronic Arts Square K.K., would publish Electronic Arts' titles in Japan and also developed the PlayStation 2 launch title X-Squad. The second; Square Electronic Arts L.L.C., would publish Square's titles in North America. The venture was described as a success by Square, as it allowed the company to release more of their titles in the North American market. In February 2003, with the preparation of Square and Enix's merger into Square Enix; both partnerships were announced to be dissolved at the end of March with each partner buying the other's shares. Electronic Arts Square was renamed as Electronic Arts K.K. and began self-publishing EA's titles in Japan from then on while Square Electronic Arts was folded under Square Enix's North American operations.
In 2004, EA made a multimillion-dollar donation to fund the development of game production curriculum at the University of Southern California's Interactive Media Division. On February 1, 2006, Electronic Arts announced that it would cut worldwide staff by 5 percent. On June 20, 2006, EA purchased Mythic Entertainment, who are finished making Warhammer Online. After Sega's ESPN NFL 2K5 successfully grabbed market share away from EA's dominant Madden NFL series during the 2004 holiday season, EA responded by making several large sports licensing deals which include an exclusive agreement with the NFL, and in January 2005, a 15-year deal with ESPN. The ESPN deal gave EA exclusive first rights to all ESPN content for sports simulation games. On April 11, 2005, EA announced a similar, 6-year licensing deal with the Collegiate Licensing Company for exclusive rights to college football content.
Much of EA's success, both in terms of sales and with regards to its stock market valuation, is due to its strategy of platform-agnostic development and the creation of strong multi-year franchises. EA was the first publisher to release yearly updates of its sports franchises—Madden, FIFA, NHL, NBA Live, Tiger Woods, etc.—with updated player rosters and small graphical and gameplay tweaks. Recognizing the risk of franchise fatigue among consumers, EA announced in 2006 that it would concentrate more of its effort on creating new original intellectual property. In September 2006, Nokia and EA announced a partnership in which EA becomes an exclusive major supplier of mobile games to Nokia mobile devices through the Nokia Content Discoverer. In the beginning, Nokia customers were able to download seven EA titles on the holiday season in 2006. Rick Simonson is the executive vice-president and director of Nokia and starting from 2006 is affiliated with John Riccitiello and are partners.