Ea Case

Electronics Art broadly competes in the entertainment industry. It is mainly in the console, personal computer and online gaming business. It competes with console manufacturers like Microsoft, Sony and Nintendo as well as game developing companies like THQ, Activision, and Sega amongst others.

A very important issue that was very briefly addressed in the case is Intellectual Property Rights cost. I believe Copyrights and Intellectual Property Rights is a very important issue that game development companies as well as console manufacturing companies should fight together. Just like movies, music and other entertainment sources, game companies do lose a lot of money every year due to piracy. There are mod chips available on prominent websites like e-bay which help promote piracy. There are also pirated games available in the market. The consoles are manufactured so that they do not play pirated games, but with the help of the mod chip, pirated games which sometimes are as cheap as $5 can be played.

There are two ways the industry could curtail piracy:

1. The console manufacturing companies can modify the hardware in a way that they can curtain piracy or at least make piracy more difficult.

2. Console manufacturing companies and game development companies can develop Digital Rights Management software together which can curtail piracy issues.

Changing the hardware would require a lot of changes in the internal structure of the consoles and can be an expensive proposition. Also, it will take a lot of time to change the internal structure as other chip manufacturing companies would also be affected. This cost will have to be incurred only by the console manufacturing company and will not be strategically as well as financially a viable option. Although, this might be a permanent solution to the piracy problem but might take a long time and be really expensive. Whereas, changing developing software would be less costly and may be a permanent solution to the problem. Also, the cost will be incurred by both the console manufacturer and the gaming companies. This will help both the companies to better their financial numbers as every game that is sold, the console manufacturer gets royalty. The time consumed to write software will also be a lot less than changing the hardware. Thus, developing software would be a strategic as well as a