Case Study 2

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CASE STUDY: MATRICES ASSIGNMENT 2

Case Study: Matrices Assignment

School of Business, Liberty University

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Case Study: Matrices Assignment

1. Existing Mission, Objectives, and Strategies

EA currently operates under the mission a call to the world to play, which focuses on worldwide expansion, digital innovation, and premium gaming experiences (Electronic Arts, 2021). The company aims to draw 700 million players while it expects live-services revenue to rise by 73% during FY24 to achieve profitability growth and develop new intellectual properties and technological solutions (Cole, 2025). The company generated $7.562 billion in net revenue during FY24, with live services contributing $5.55 billion to total revenue.

EA generates business revenue through its live-service operations, which include game releases across multiple platforms, its $1.2 billion Codemasters acquisition, its $ 2.4 billion Glu Mobile acquisition, and its annual $1.35 billion investment in Frostbite engine and AI technology development (Cole, 2025). The company operates more than 25 development studios worldwide, and its global network supports 700 million registered players.

2. New Mission Statement

Customers with EA draws players from all around the world who span different age groups and demographics because it has 700 million registered users spread across various gaming communities worldwide. Products/Services: The company provides interactive entertainment through its live-service games and sports titles, and mobile games and digital content, which maintain continuous player engagement. Markets: EA operates worldwide through its North American market, which generates 47% of revenue, its European market, which generates 28% and its Asia-Pacific market, which generates 19% while it expands into new markets through localized content and regional partnerships.

Technology: The company relies on its Frostbite engine, together with cloud infrastructure, AI content generation, and cross-platform technology, to create advanced gaming experiences.

The company focuses on sustainable expansion through its 77% gross margin and $7.46B annual revenue (FY24) while developing new live-service models to boost player spending. Philosophy: The company creates motivational gaming content through its commitment to creative thinking and innovative approaches, and its goal to create fair gaming standards that protect respectful and safe communities.

Self-concept: The company leads the world through its ownership of EA Sports FC, Apex Legends, The Sims, and Battlefield IPs and its leadership in live-service operations and gaming technology development. The company maintains responsible gaming standards and supports diversity and inclusion programs, environmental sustainability, and community development initiatives through its corporate social responsibility activities. The organization supports its workforce of 14,500 employees through career development programs and an inclusive work culture, which enables them to generate innovation and reach excellence.

3. Analysis of the Firm’s Existing Business Model

EA operates a complex live-service model that generates lasting financial value through digital player spending across multiple platforms. EA generates 73% of its total revenue from live services, as these operations generated $5.55 billion during FY24, while full-game sales accounted for 27% of total revenue at $2.015 billion.

EA generates its revenue from three primary sources: console gaming at 59%, PC gaming at 24%, and mobile gaming at 17% (Greenspan et al., 2022). The company achieved digital sales success through its distribution approach, which now generates more than 90% of its revenue from digital channels (Greenspan et al., 2022). EA Sports games generate most of their revenue through Ultimate Team modes because these modes draw players who want to purchase seasonal content updates.

Strategic Assets and Competitive Advantages: EA maintains multiple proprietary game franchises, operates on the Frostbite engine, and connects 700 million registered users worldwide across 25 development studios. The company demonstrates its ability to deliver live-service content through the release of Apex Legends and EA Sports titles, which continue to receive updates to keep players engaged (Greenspan et al., 2022). The company uses modern technological systems that support platform-independent gaming and cloud-based services to expand its business operations into the future.

4. SWOT Analysis

Strengths: The primary strengths of EA are its big player ecosystem, high margin live-services revenue base, and robust portfolio of established IP (Greenspan et al., 2022). These strengths rest on significant technological capacities.

Weaknesses: EA has some structural vulnerabilities such as its over-reliance on live-service, high development costs, Unpredictable game releases, dependence on third-party sports licenses and low presence in major Asian markets (Pfeifer, “Equity Research Report: Electronic Arts - a Financial Analysis”).

Opportunities: On the outside, EA stands to ride global growth in gaming, mobile-first markets, AI-based content creation, and a growing cloud-gaming infrastructure (Alotaibi, 2024). Another source of growth is rising interest in esports.

Threats: The threats to revenue stability include industry consolidation, tightened monetization laws, high platform dependency, and rapidly changing consumer preferences (Klimas, 2019).

5. TOWS Analysis

SO Strategies (Strengths–Opportunities): EA has its live-services model (that brings more than 70 percent of revenue), its 600-million-player base, and Frostbite to achieve the growth in the mobile-first regions and cloud-gaming markets (Statista, 2025). New IP expansion into India, MENA, and LATAM, as well as AI-driven growth facilitates the growth of new IP and esports brands including EA Sports FC and Apex Legends.

WO Strategies (Weaknesses Opportunities): The inconsistent launches, dependence on ageing franchises, and inadequate Asian presence can be tackled using AI, procedural generation, and expanding the market globally (Carabali, 2024). Localization and regional alliances minimize geographic risk.

ST Strategies (Strengths-Threats): Competition, monetization regulation and platform dependency can be offset by strong cash reserves, technology infrastructure and wide IP portfolio (Pineda, 2025).

WT Strategies (Weaknesses- Threats): Decreasing the reliance on live-service, enhancing QA, and extending original IP ensure no internal vulnerabilities can aggravate external threats.

6. Strategic Group Map

The strategic group map analyzes Electronic Arts independently to conduct a complete competitive assessment of the gaming industry. The complete method enables better competitor evaluation by examining multiple gaming genres across different platforms on which competitors operate.

The strategic group map bases its competitive advantage assessment on two essential factors: Innovation & Technology Investment (horizontal axis) and Revenue Diversification (vertical axis). EA maintains High Innovation with Moderate-High Diversification status because it dedicates $1.35 billion annually to R&D, uses the Frostbite engine, and operates across sports, shooters, simulation, and mobile game segments (Hivelr Business Review, 2025).

The competitive analysis places Activision Blizzard in the High Innovation, Moderate Diversification category because it maintains strong tech capabilities while focusing on fewer franchises. At the same time, Take-Two Interactive is rated Moderate Innovation with Low Diversification due to its focused IP approach. Ubisoft operates at Moderate-High Innovation with High Diversification through its wide genre selection, and Nintendo maintains Moderate Innovation with Moderate Diversification by focusing on first-party hardware integration (Hivelr Business Review, 2025). The positioning shows how EA achieves market expansion through its strategic methods, which maintain equilibrium between technological progress and business development.

7. PESTLE Analysis

· Political: The worldwide regulatory focus on loot box systems has intensified, as Belgium and the Netherlands have established complete bans that affect EA's Ultimate Team payment systems (“Simmons & Simmons”). The existing regulatory system creates compliance challenges that threaten EA's revenue growth, as the company removed FIFA Points sales in Belgium to safeguard its live-service business model.

· Economic: The worldwide gaming industry generated $184.4 billion in 2023, and experts predict it will grow to $211.2 billion during the next two years, which presents substantial business expansion possibilities for EA. The gaming industry faces two significant economic challenges: players reduce spending on games during uncertain times, and EA faces revenue declines in the European (28% of revenue) and Asia-Pacific (19% of revenue) markets due to currency fluctuations (Pfeifer, “Equity Research Report: Electronic Arts - a Financial Analysis”).

· Social: The European gaming market now generates 90% of its revenue from digital games, and mobile gaming leads this segment with 44% of total digital revenue, which shows EA's expanding mobile gaming presence through its Glu Mobile acquisition. The gaming industry is welcoming more players from older age groups and female gamers, creating new business opportunities for EA's wide range of games.

· Technological: EA dedicated $1.35 billion to research and development in 2023 to enhance its engine technology, AI tools, and cross-platform systems, demonstrating its leadership in technological innovation. Microsoft, Google, and Amazon developed cloud gaming infrastructure that enables new distribution channels and AI content-generation tools, helping developers build games at speed while offering personalized experiences to players (Pfeifer, “Equity Research Report: Electronic Arts - a Financial Analysis”).

· Legal: The ongoing 19-country investigations and loot box bans pose various legal challenges that require tailored solutions for each region to safeguard EA's existing monetization systems (“Simmons & Simmons”). EA requires intellectual property protection to defend its valuable franchise assets but needs to allocate funds for GDPR and other data privacy regulations compliance and operational adjustments.

· Environmental: EA's cloud gaming systems require 30% more power than regular gaming systems, which creates sustainability problems for its digital content delivery network. EA needs to reduce its carbon footprint by optimizing digital operations across worldwide locations and maintaining international development sites to fulfill its environmental sustainability goals.

8. Porter’s Five Forces

· Threat of New Entrants (Low): as one with digital distribution, entry barriers are lowered and enable indie entry, but EA has strong IP and brand recognition as a Strength that shields it against new entries.

· Bargaining Power of Buyers (High): In platforms such as Steam, there are 132 million active users monthly, which can switch and buy with high power, which presents a Weakness to EA and external Threat to review sensitivity (“Number of Steam MAU 2021| Statista”).

· Supplier Power (High): Technology suppliers, licensors and sports rights holders have great bargaining power, which increases royalty expenses and creates long-term dependency which is a Weakness (Pineda, 2025).

· Threat of Substitutes (Low): Mobile games command half of all gaming revenue globally, providing an Opportunity because EA mobile portfolio, enhanced by the acquisition of Glu mobile, is prepared to seize this market segment (Grand View Research, 2024).

· Rivalry Among Competitors (High): Major firms, such as Tencent, Sony, and Microsoft , control over 40% of global gaming revenue creating a significant Threat for EA (Grand View Research, 2024).

Appendix 1: SWOT Analysis Matrix

STRENGTHS	WEAKNESSES
700 million registered player network (EA, 2024) 73% live-service revenue ratio ($5.55B FY24) 77% gross profit margin (FY24) Proprietary Frostbite engine across 15+ titles $1.35 billion annual R&D investment 25+ global development studios 90%+ digital distribution rate $6.4 billion cash and equivalents (FY24) Cross-platform technical capabilities Established sports licensing relationships	73% revenue dependence on live services $100-300M average AAA development costs Limited Asian market presence (<5% revenue) Aging franchise dependency (FIFA 30+ years) Inconsistent game launch performance High platform dependency (53% console revenue) Limited mobile portfolio (17% revenue) Regulatory compliance costs increasing Long development cycles (3-5 years) Third-party license vulnerabilities
OPPORTUNITIES	THREATS
Global gaming market growth to $321B by 2026 Mobile gaming $92B market (49% of total) Cloud gaming market $15.7B by 2025 AI content creation capabilities Emerging markets expansion (India, LATAM) Esports market $1.8B annually Cross-media IP licensing opportunities Subscription service growth (Game Pass model) 5G mobile gaming enhancement VR/AR gaming market emergence	Industry consolidation (Microsoft-Activision $69B) Loot box regulations in 19+ countries (“Simmons & Simmons”) Platform dependency risks (Apple/Google fees) Intense competitive rivalry (40% market share top 5) Economic recession impact on discretionary spending Changing consumer preferences (battle royale trend) Cybersecurity and data breach risks Climate change operational impacts Talent acquisition competition Technology disruption risks (blockchain gaming)

Appendix 2: TOWS/Bivariate Strategy Matrix

Internal/External	OPPORTUNITIES	THREATS
STRENGTHS	SO STRATEGIES: Leverage 700M player network for mobile market expansion in emerging regions Utilize Frostbite engine and AI capabilities for cloud gaming platform development Expand live-service expertise into esports and subscription models Deploy $6.4B cash reserves for strategic acquisitions in high-growth markets Cross-platform IP expansion into VR/AR gaming segments	ST STRATEGIES: Use strong cash position to develop alternative monetization models beyond loot boxes (“Simmons & Simmons”) Leverage diverse IP portfolio to reduce single-platform dependency Deploy technical expertise to create proprietary distribution platforms Utilize established sports relationships to negotiate better licensing terms Strengthen cybersecurity through increased R&D investment
WEAKNESSES	WO STRATEGIES: Address Asian market gaps through localized mobile game development Reduce platform dependency by expanding direct-to-consumer capabilities Accelerate development cycles using AI and procedural generation Diversify revenue streams through subscription and cloud gaming services Enhance mobile portfolio through strategic partnerships and acquisitions	WT STRATEGIES: Reduce live-service dependence through diversified monetization approaches Improve launch reliability through enhanced quality assurance processes Develop regulatory compliance expertise for global market requirements Create contingency plans for license loss scenarios Invest in defensive technologies against competitive threats

Appendix 3: Strategic Group Map

Strategic Group Positioning Analysis

The strategic group map shows gaming companies based on their positions between two essential factors.

X-Axis: Innovation & Technology Investment (Low → High)

The evaluation system bases its assessment on research and development expenses, together with domestic technology advancement and internal technical expertise.

Y-Axis: Revenue Diversification (Low → High)

The assessment evaluates how the company distributes its portfolio across different game genres, platforms, and revenue streams.

Company Positioning:

Electronic Arts is in the high-innovation segment with moderate to high revenue diversification.

The company invests $1.35 billion in R&D through its work on the Frostbite engine and maintains an extensive portfolio of intellectual property.

Microsoft runs Activision Blizzard through advanced technology platforms that enable it to focus on maintaining its core game titles.

Take-Two Interactive operates at average levels of innovation because it specializes in developing GTA and NBA 2K games without exploring other gaming platforms.

The company operates at a moderate to high level of innovation because it develops games across multiple genres and platforms.

Nintendo operates at average levels of innovation while maintaining average diversification across its business operations.

The company uses its resources to develop unique games while making sure its gaming devices work seamlessly with software programs.

References

Alotaibi, Omar. (2024). Role of Artificial Intelligence in Enhancing Metaverse Gaming Experience and Human Interaction. International Journal of Metaverse. 2. 11-19. 10.54536/ijm.v2i1.2933.

Carabali Noguera, Raul. “Analysis of Financial Risks in the Video Game Industry and Future Trends.” Www.theseus.fi, 2024, www.theseus.fi/handle/10024/860206.

Cole, C. (2025).  Electronic Arts: A Fortress Balance Sheet and Digital Dominance Fueling Future Growth. Ainvest. Available at: https://www.ainvest.com/news/electronic-arts-fortress-balance-sheet-digital-dominance-fueling-future-growth-2504/.

Electronic Arts. (2021).  Electronic Arts Completes Acquisition of Glu Mobile, Creating a New Global Leader in Mobile Gaming. Available at: https://ir.ea.com/press-releases/press-release-details/2021/Electronic-Arts-Completes-Acquisition-of-Glu-Mobile-Creating-a-New-Global-Leader-in-Mobile-Gaming/default.aspx.

Gaming as a Service Market Size | Industry Report, 2030. Grandviewresearch.com, 2024, www.grandviewresearch.com/industry-analysis/gaming-as-a-service-market-report.

Greenspan, D., Dimita, G., Boyd, S.G., and Rizzi, A., 2022. Mastering the Game: Business and Legal Issues for Video Game Developers-A Training Tool.

Hivelr Business Review. “Electronic Arts (EA): PESTEL and Macro-Environmental Analysis.” Hivelr, 2 Nov. 2025, www.hivelr.com/2025/11/electronic-arts-ea-pestel-and-macro-environmental-analysis/#google_vignette. Accessed 23 Nov. 2025.

Klimas, P. (2019). Current Revenue (Monetization) Models of Video Game Developers.  Journal of Management and Financial Sciences,  28, 119–136. https://doi.org/10.33119/jmfs.2017.28.5

Number of Steam MAU 2021| Statista. Statista, 2021, www.statista.com/statistics/733277/number-stream-dau-mau/?srsltid=AfmBOoqs3M7eYdZ-OUDxzeAffyb-7CUEkQ9C-xXX5O3anJO6fddl2s-M.

Pfeifer, Matthias. “Equity Research Report: Electronic Arts - a Financial Analysis.” Handle.net, 19 Dec. 2023, hdl.handle.net/10362/175543, http://hdl.handle.net/10362/175543. Accessed 23 Nov. 2025.

“Simmons & Simmons.” Www.simmons-Simmons.com, 18 Apr. 2023, www.simmons-simmons.com/en/publications/clgm1i0ko0020upv4ipezwfz4/status-of-loot-box-regulations-in-europe-q1-2023.

Statista. (2025). Topic: Electronic Arts (EA). https://www.statista.com/topics/7545/electronic-arts-ea/?srsltid=AfmBOorkxJhQM4oAIRtEffKL-DtUDMokSP1sjgRPQqX9PviaRS6w_piP