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EA Leads Videogames In Sales

Published: 2005-05-11

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The challenge comes from rivals and the increase in costs of developing games for advanced game consoles.

They've got Madden. They've got The Sims. And they've even got everyone's favorite wizard, Harry Potter.

Last year, Electronic Arts did over 30% of videogame business in the United States, for $1.68 billion USD in sales. And demand for games will not abate anytime soon, as console makers Sony, Microsoft, and Nintendo all prepare next-generation offerings.

Why should EA worry? They just completed a deal last fall that gives EA exclusive rights to make NFL-brand games. And in terms of sports popularity, the NFL stands well above Major League Baseball and the NBA.

But the budgets for making new games have reached Spielberg-like proportions. $10 million USD for a title like the one that will tie-in to the movie "Batman Begins" has become the norm.

And the console industry continues to develop platforms capable of better graphics, improved physics, and finer sound. Meeting gamer expectations based on the new exciting specs means bringing in more development talent, either through hiring or competitor acquisitions.

Most gamers consider the first year of a new console to be one where games won't fully utilize the hardware. A $50 price tag commonly accompanies new game releases, and there will be reluctance to purchase what may be an unsatisfying game when compared to releases after the first 12 months.

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