Dependence on Major Console Manufacturers
Electronic Arts has no opportunity to release its products on major platforms without the necessity to have contact relationships with various corporations. As stated in the case, Electronic Arts partnered with Sony and Microsoft regarding new releases on their consoles (Hoffman & Gold, 2018). However, those contacts deprive Electronic Arts of decision-making power over its launch policy for these consoles for years to come.
Electronic Arts offered unfavorable conditions to both companies, hoping to expand the console audience of their products. This ultimately leads to the company putting more effort into console gaming development, while computer users will be less prioritized. Electronic Arts could have offered less restrictive contract terms and served all segments of customers.
Impact of Restrictive Partnerships on Decision-Making
The company did not follow its best options, interacting with Sony and Microsoft as they partnered on extremely restrictive terms. Electronic Arts should have proposed more favorable conditions that implied collaboration rather than dependent relationships with those companies.
Electronic Arts gave the manufacturers their major franchise, which puts the company at greater risk. They could offer Sony and Microsoft the opportunity to develop exclusive projects that are part of the franchise to attract the audience. Additionally, the company should not forget about market diversification, as putting all the assets on one platform is potentially dangerous. Electronic Arts could have collaborated with producers of computer hardware as well in order to serve all its customers and keep its customer base.
Recommendations for Diversification and Collaboration
Therefore, the company puts itself at greater risk by partnering with major manufacturers and giving them its biggest franchise. Electronic Arts should have reconsidered its business proposal and offered the company collaboration. They could have developed affiliate projects for both platforms to attract new audiences. Additionally, they could partner with computer hardware manufacturers to keep the existing gamers. The company’s decision restricts its decision-making power and does not allow for bargaining with Sony and Microsoft.
Reference
Hoffman, A.N, & Gold, N. (2018). Electronic Arts (EA Games): An overreliance on console manufacturers Sony and Microsoft. RSM Case Development Centre. Web.