Pretty good strategy from a financial perspective if you consider game purchasing to be a zero-sum game. If your average consumer is willing to spend $XX on games, and $YY is going to solid competitor ZZ, then acquiring and shutting down ZZ, removing them from the game industry, frees up that $YY to be spent on EA games.

What I don't understand about that strategy is what prevents the acquired employees from re-forming as a new company? Are there non-competes in place? Is it difficult to get financing to form a AAA game company? I'm presuming that, regardless of what happens, it takes a while.

>What I don't understand about that strategy is what prevents the acquired employees from re-forming as a new company?

Nothing prevents this, there had been many studios by former employees of a shut down studio (e.g. Ensemble -> Robot, Pandemic -> Killzone, Incognito -> Lightbox, Big Huge Games -> Impossible etc. etc). However, usually the reason a studio had been shut down was its poor performance and not some evil marketing plan so the respawned studios inherit the problems of the original studio complicated with the talent drain that happens during such a transition.

It is very difficult to get financing for a AAA game company since the industry is so hit-driven. Moreover, it'd be rather difficult to find investors just after the studio you worked for just shut down due to poor performance.

Financing AAA games through a studio is similar to dealing with a record label, the cards are stacked agains you unless you really make it big.

I hope that is EA's strategy, as it will end them.

The overhead of entering the games industry is cheaper than ever, and as a result we are seeing more and more independent game developers successfully penetrating the market.

EA has been around for 30 years though, so whatever they are doing, it works - what I don't understand is why does it work.

EA survive off of Madden and FIFA licenses. They don't have to spend that much money on improving the game year after year, but millions of people purchase them almost religiously.

They don't spend a lot on development but they certainly do on licensing fees.

Agree with @interesting_att - it's all about EA Sports. As much as I despise EA, even I get sucked into FIFA. Their sports franchise will support one hundred studio fuck-ups - annual minor updates are as good as owning a money printing press.

I personally agree. But consider none of this is on the radar of the stereotypical MBA/middle manager/C-level execs/...