From computer to video: a game-y success story

Last year, Electronic Arts Inc. was doing just fine with a stable computer-game product line. The company was worth an estimated $265 million dealing in PC-based games, but founder and chairman William M. Hawkins III wanted more: specifically, the home video game market.

Hawkins turned to Lawrence F. Probst, a former marketing director for Apple and seven-year Electronic Arts veteran, to lead the company into the home videogame field.

The first game from Electronic Arts for the Nintendo Entertainment System was Skate or Die II, a sequel to the company's successful computer game. When the inventory arrived, Probst immediately cut the price from industry-standard $50 to $35 and scaled back production on a second program to prevent discounting. Electronic Arts broke even with Nintendo products while competitors were writing their figures primarily in red.

Hawkins also led the company into games for the Genesis system from Sega, and games for that system contributed 25% of Electronic Arts' considerable earnings in the first year.

The coupling of computer games and videogames remains the strategy for Electronic Arts. Hawkins said in a Business Week article that no single game accounts for more than 6% of revenues. "We wouldn't mind having a Batman," Hawkins explained. "We just don't want to run the company on it."