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00:05it started with one man's vision this is in the summer of 1975 and I actually concluded that I
00:12should start the company in 1982 and turned up that's exactly what I did EA laid the kind of
00:18DNA foundation pretty differently other companies trip was and is a visionary they played by their
00:26own rules where we're going to answer the question that we asked in our original recruiting ad which
00:31is can a computer make you cry and reinvented the entire game industry that was really the birth of
00:42EA Sports it was the first time in the industry that celebrities had been used in a game they've
00:47had this kind of core success in these core franchises that have allowed them to become
00:51experimental there were tough times EA's ultimate success even existence was in doubt but their
00:59perseverance paid off this is the story of electronic arts the EA machine works it is unstoppable it's
01:11like a giant battleship that's turning its gun so when it starts firing you do not want to be on
01:16the
01:44base
01:49in the late 1970s two students have a chance meeting I was at Stanford Business School we
01:58had a professor a decision analysis guy brilliant guy and in class one time he looked around I said
02:04you stand for kids you all worry about money so I'm gonna ask you different question if it weren't
02:08for money what would you like to do and came to me and I said I'd like to help create
02:12this kind
02:14of adult Disneyland where you're in a story kind of an athletic participant in a story but the
02:20computer creates the environment the people around you and you know there's a silence in a class like
02:24who boy is he ever see ever out of it and this guy came up to me afterwards said you
02:29know I've never
02:30heard that before there's one other kid in our class and one of the other classes said something
02:34similar that you gotta go talk to him and that was Trip Hawkins while Trip was at Stanford he had
02:39dreams of starting his own software company I started thinking wow if you can actually go to
02:44a store and get a terminal and take it home then that's exactly what I've been waiting for I want
02:51to be able to make games for home computers I went back to my desk and I spent the afternoon
02:57figuring
02:57out how long it would take for there to be enough of these computers and homes that I could start
03:02my
03:02game company and this is in the summer of 1975 and I actually concluded that I should start the company
03:09in 1982 and sure enough that's exactly what I did we got out of Stanford he said five years I'm
03:14gonna
03:14start a software company get ready so I did I did various this and that five years later he called
03:21up
03:21and said okay I'm getting six other people together want to talk about starting a company you want to
03:25come I said yes three months later he started a company and I came in after working at Apple
03:31computer trip starts amazing software in 1982 right on schedule after I hired several employees
03:38and people had to answer the phone and say amazing software if you were thinking you know I think
03:43this is kind of silly and and you know we should have a different name and the way they go
03:47about
03:47changing their name is a bit unusual there were about a dozen employees and we had a rule which
03:53was that we were going to stay up all night if necessary until we all agreed on a new name
03:58and
03:58that you could go to bed if you wanted but if you went to bed you would lose your vote
04:01so it was
04:02actually not until about two o'clock in the morning that everybody that was still awake agreed that the name
04:07should be electronic guards electronic arts is poised to turn the video game world upside down
04:13playing by their own rules probably the riskiest decision that I made in starting EA was the
04:21decision to sell directly to retailers and at that point in time nobody was doing that everybody sold
04:27to distributors who then sold to the retailers I had studied these other media industries like records
04:32and books and noticed that the leaders all had control of their distribution EA laid the kind of
04:39DNA foundation pretty different the other companies so at EA Tripp started out keeping I think it was 15
04:45percent of the company Tripp took about one-third of what other founders did and basically laid the
04:50financial DNA for a big organization electronic arts also quickly realizes the importance of
04:56presentation and packaging for video games my thought there was that here we have packaging that's very
05:01unsophisticated for games at that time a lot of it was just in ziploc bags I thought well number one
05:06I
05:07don't want to spend a lot of money on the packaging and number two you know when I have something
05:09that
05:10has more impact that makes people think that it's a creative product well hey records sell for less
05:15than ten dollars so why can't we just use record packaging first time I heard about EA was when their
05:20first you know batch of games came out they had this big press campaign about you know digital artists
05:24can't you know computer make you cry and they have become the record album looking packages when EA started there
05:30was a whole different philosophy of actually having a professional organization that started out
05:34thinking about the complete process of publishing part of that was that attitude of how you promote the
05:40artists the upstart game company also makes it a point to treat developers as artists and promote them
05:45accordingly I was applying a lot of thinking just from looking at the music business in the book
05:51business and transferable what are they doing and why does it work for them and how can we apply that
05:56to
05:56what we're doing he brought in producers from A&M Records to teach the producers at EA how to develop
06:03artist and repertoire because no one had ever used the title producer before so the handful of us who
06:09were fortunate enough to be the early producers of EA were the first people ever to have that job in
06:13the
06:13industry because Trip Hawkins was the first one to see that that was what was needed to guide products
06:18through the same way that was in film and the way it was in music terms like affiliate label producer
06:23director
06:24those are terms that are still used today in the game industry by 1983 EA is releasing games like
06:29hardhat Mac and the highly regarded strategy game mule mule by Ozark softscape and den button which got a
06:38complete aspect into players negotiating with each other through a very simple interface within the game I
06:44talked to more game designers still today 20 years later if you ask them what was a game that they
06:50respect or they in the influence them their careers a lot of people go back and talk about mule everything
06:55is going well for the young company but the roughest times are yet to come it was the fall of
07:021983 and
07:03the video game business was crashing around our ears bad games were flooding the market and sales were just
07:20dropping in 1983 electronic arts releases a game that sets the standard for sports games to come dr. j and
07:28Larry bird go one-on-one that was really the birth of what became EA sports and it was the
07:36first time in
07:37industry that celebrities had been used in a game graphically it was very simplistic compared to
07:43what we were used to in the coin opera they were actually taking real stats and applying them to a
07:49game trying to bring it to life made it more real it was really an interesting idea that game ended
07:55up
07:55being a big success for us was really our first genuine hit product not long after the success of dr.
08:01j and
08:02larry bird the video game market takes a turn for the worse the whole decade of the 1980s EA's ultimate
08:11success and even existence was in doubt it was the fall of 1983 and video game business was crashing
08:19around our ears the cartridge business had been suffocated in that tremendous oversupply of product from
08:26new people bad games were flooding the market and sales were just dropping and PCs were just starting
08:32to catch fire in the homes and take off EA survives by capitalizing on the rise of computers with popular
08:37PC titles like Archon in 1984 and the Bard's Tale in 1985 building on the success of dr. j and
08:49Larry
08:49bird go one-on-one trip pursues another sports legend John Madden being a serious football fan I wanted to
08:56make a real football game a much more sophisticated game that's why I wanted to recruit a coach like
09:01John Madden to help make sure we got all of the details of authenticity right so you got the Madden
09:05and Madden of course you know thought he was a total dweeb but Tripp rode across country on the train
09:10with
09:10Madden talking football all the time so after you know an hour of the train with Tripp he realized Tripp
09:15was
09:16also a football fanatic and Tripp came back with you know a three-ring binder full of notes so we
09:21decided to
09:22work with them then after the deal is done you know Tripp goes in and says okay coach here's your
09:27game
09:28Madden said where's all the guys it's seven on seven yeah this is you know on these computers this is
09:35all we
09:36do now and Madden said no you're not you can't ship a game with my name on it that's not
09:41real football we
09:42had such an ambitious undertaking it took four years to make the game it was almost killed a number of
09:47times
09:48and it became known in the company as Tripp's folly everyone in the company thought we should
09:53just give up and forget the whole thing and I was just very determined to to make it work but
09:57it was
09:58really his baby go back to the original PC versions the men's series was more of a novelty when it
10:08first
10:08came out it was not a huge success back then sports and video game players were not the same crowd
10:14although electronic arts survives the 80s by developing for the PC the video game market is
10:19rapidly becoming more and more console heavy up until that time EA was strictly a computer company
10:25we did no console work a bunch of us including Larry Probst who was a sales guy at the time
10:30he and I and
10:31a few others were you know pretty vociferous about wanting to take EA from this little you know what we
10:36called a boutique software you know company into a bigger mass market console company trip goes okay
10:43figure out what you want to do and let's do it I think you guys are you know finally right
10:47we've
10:48got this experience in sports we better stick with it and really go after it because that was one area
10:52where we felt secure that we could beat any competition we're developing the first set of
10:58sequels for EA sports lineup on the Sega Genesis so the first discussion was a guy named Rich Hillman and
11:04I
11:04are sitting around I said you know we should do Madden again next year and Rich goes that makes
11:09sense you know we went to everybody else in EA and they went so football two years in a row
11:14nah it'll
11:15never work but we insisted so we set off to do Madden football as well as long as we're doing
11:22that let's
11:22do another hockey and let's do another basketball and with that EA Sports was born
11:35the culture at EA sort of really took off when EA Sports sort of found its its center after the
11:42successful launch of EA Sports trip sets his sights on hardware it was a play I viewed as a way
11:49of taking
11:50electronic arts to the next stage as a software company because the most valuable software companies
11:54Microsoft and Sony are involved in the hardware business they're involved in the platform business
12:00they don't just make application software I thought hey why shouldn't we bid for that
12:04development of the 3DO begins within EA and becomes trips pet project that's a very risky thing to do so
12:11there was disagreement at the board level and within the management team about the risks associated
12:17with that two things happen to trip I think the first thing is he got bored you know it looked
12:21like
12:21we had three years of easy sailing on Genesis there wasn't enough for him to do well he's a real
12:27creative energetic guy he was demotivated from being a CEO of a company that wanted to grow and
12:33he had this vision about what became a 3DO and then as he got into 3DO it just obviously became
12:41a conflict
12:42something had to be done with 3DO to turn it into a more viable company and it was clear that
12:47that was
12:47going to take a lot of focus and I just didn't feel comfortable that I could just abandon it in
12:53the end
12:53when given a choice you know do you want to change the world again this time with a hardware company
13:00or you know kind of do this cyclical growth thing with EA he chose 3DO that's really how I ended
13:07up
13:07separating from EA I mean wasn't something that I planned in advance to work out that way a lot of
13:13people use the word visionary very loosely and the word is thrown out in a very casual way trip was
13:20and
13:20is a visionary in that a lot of things that came to pass trip did see them long before they
13:26they came
13:26to pass and his batting average for being able to view how events would unfold was so high plus his
13:35ability to motivate people to go out and try and make that vision of the world happen so that's the
13:39way I think of him as somebody who actually truly deserves the word visionary in 1991 trip Hawkins leaves the
13:46company he founded to embark on a new venture placing electronic arts in uncertain hands it did
13:52a really rocky transition in the early 90s from the founding CEO to a new CEO made for a really
13:57hard three
13:58years after Trip Hawkins leaves to start 3DO EA quickly fills the gap my impression of EA after Trip Hawkins
14:13is
14:14that Larry Probst took over the helm and Larry Probst is an amazing leader Larry Probst is the CEO of
14:20the
14:20company and sort of really kind of grew the company from a couple hundred million where it is today
14:25nearly three billion dollars in revenue he's a sort of phenomenal figure very balanced very fair very hard
14:32under new leadership electronic arts continues to dominate the industry and pursues talented outside
14:38developers that's when he realized that they should start making periodic acquisitions to just to just beef
14:44up the product line and beef up the internal development resources and add more brands they almost kind of
14:50started that campaign with origin I think they had a lot of disruption and chaos that happened after the
14:55origin acquisition and the important thing is they learn from it I think so that when they started doing
14:59their next acquisitions they had a much better sense of kind of what to look out for with the acquisition
15:04of
15:04origin EA continues the popular Ultima series and releases the first ever massively multiplayer
15:09online role-playing game Ultima online it did what role-playing games have been trying to do for a long
15:14time is kind of recreate that original like little community experience of people sitting down and
15:18playing it finally got it in 1990 EA acquires distinctive software a Canadian based company Don Mattrick who had
15:28found a distinctive software as a child prodigy and then run it for 10 years Mattrick called up trip and
15:34said you guys should acquire us distinctive software which is EA Canada today and it is the largest video game
15:40studio in the world they do have a lot of the big time titles their workhorse for EA NBA live
15:47speed
15:53Def Jam
15:57FIFA
16:00MVP Baseball
16:07what EA's done in terms of buying the developers it's been very successful they've worked with the developers on
16:12multiple skews it's given time to get to know each other and understand whether or not they're synergies rather than
16:18just go out there and chase after the hit developer who's got big million in seller last year and just
16:23buy them outright
16:25in 1997 EA buys Maxis the developer of the SimCity series it was actually pretty impressive the group of
16:32people they brought into Maxis about four sharp people replaced about ten vice presidents that we had at the time
16:37and generally did a better more focused job of running the company because of that Maxis as a studio I
16:42was
16:42able to get much more focused on what we were good at under electronic arts Maxis releases SimCity 3000 and
16:48the best-selling PC game of all time the Sims and EA helps change the makeup of the industry which
16:55came first the chicken or the egg you know is EA gobbling up developers thus changing the industry or is
17:00the industry changing thus requiring EA to gobble up the developers you know I'd always seen EA as kind of
17:04like the Death Star
17:05you know like this large monolith kind of going around gobbling up things you know what I didn't realize until
17:11they acquired us was they in fact were being run by very smart people
17:16other key acquisitions made by EA include Peter Molyneux company Bullfrog and the Florida-based Tiburon known for bringing the
17:23Madden franchise to the next generation consoles
17:25Madden NFL 2001 has a special place just because of it really put our company electronic cards Tiburon on the
17:32map
17:34as one of the premier sports games developers you know that was a huge achievement a lot of hard work
17:41really kind of set the pace for sports gaming on next-gen consoles all next-gen consoles were not blessed
17:47with Madden though
17:50electronic arts decided not to develop games for Sega's Dreamcast despite the company's success on the Sega Genesis
17:56there are a couple negatives about the Dreamcast the first was we'd lost a little faith in Sega's
18:02management because they had done the 32 acts they did the Sega CD they kept kind of cycling this new
18:09stuff and kind of changing their story about where they were going to put their emphasis the Dreamcast for
18:16a while there was going to be an online machine at launch they made too many changes for us to
18:22stay
18:22confident meanwhile Sony what they said they were going to ship they never change their message on the
18:27PlayStation for electronic arts one of the things that we've prided ourselves on is being platform
18:32agnostic we think that our responsibility is to create the best software experiences for consumers
18:38they've had this kind of core success in these core franchises that they've nurtured and that have
18:43allowed them to become experimental with several best-selling franchises under its belt EA continues its dominance in
18:49the game industry with a variety of big-name licenses they obviously moved a lot more towards licenses
18:56than Lord of the Rings franchises and James Bond a Harry Potter that's taken up a lot more of the
19:18growth of the
19:20company I think we've been the leader in innovation in the industry we've kind of invented movie games
19:25before Harry Potter and Lord of the Rings movie games all sucked and they came out late and we
19:33still see highly anticipated movie games that still suck the appetite for innovation and risk-taking in EA in
19:41the last five years has changed pretty dramatically today electronic arts continues to expand its reach into
19:47the video game community this gaming giant now has over 4400 employees worldwide and it's showing no signs of slowing
19:57down
19:59this company has a future
20:02electronic arts I think is now
20:04institutionalized learning habits
20:07marketing habits that can withstand
20:10kind of a transition between generations
20:14at EA in the next five years we're going to get to the place where we're going to answer the
20:18question that we asked in our original recruiting ad which is can a computer make you cry
20:23what makes EA successful is that they have a good mix of the right people and a good mix of
20:29the right personalities
20:30EA's success is a gestalt of those people as a producer it's a pretty impressive thing when the EA machine
20:37works for you it's very gratifying if you've just poured your heart and soul into something for the last 12
20:42to 24 months to see this machine fire up
20:48it's like a giant battleship that's turning its gun so when it starts firing
20:53you do not want to be on the beach
20:57I'm kind of amazed what has happened that's beyond my wildest dreams and it's totally exhilarating
21:05you
21:11phone 1.2 megapixel camera and holds 5,000 mp3s
21:15wow that's that's really impressive
21:17hmm
21:18hold on a second sorry
21:21hello
21:22yeah hey I'm in the middle of lunch uh can I call you back
21:24all right cool thanks
21:27so that's a lot of mp3s
21:28yeah
21:29see the best greatest biggest shiniest coolest and blinkiest new stuff coming next year
21:33when the screensavers goes live at the consumer electronics show coming up next
21:38hold on let me let me put you on speakerphone
21:40no
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