Stories
The Story of Video Gaming Company Electronic Arts (EA)
Published
5 years agoon
With the advent of computers and consoles, gaming took the world by storm. It evolved into a multibillion dollar industry with different companies releasing franchises and breakthrough games every year. Gaming pushes the human boundaries as to what is possible and with multiple exciting technologies like virtual reality and augmented reality, the industry is set for a massive change in the future. However, the gaming industry had humble beginnings and this is the story of one of the industry giants, Electronic Arts (EA.)
Beginnings
Electronic Arts was founded in 1982 by Trip Hawkins, an Apple employee, who left his job and began his own company. Initially, the company was named Amazin’ Software. After the release of Apple’s Macintosh personal computer (PC,) the market for PCs was thrown open.
Trip Hawkins met with Don Valentine, the founder of the venture capital firm Sequoia Capital, to discuss financing options for his new venture. Don Valentine convinced Trip Hawkins to resign from Apple and provided a spare office for Hawkins to use. Hawkins spent seven months with his first employee, Rich Melmon (also a former Apple employee,) to refine their business plan. Hawkins continued to hire former Apple and Atari workers till his team outgrew the office Sequoia Capital provided and moved to a bigger office in San Mateo.
Naming of Electronic Arts
The name Amazin’ Software was disliked by the rest of the team. Trip Hawkins believed developing software was an art form and called the developers ‘software artists,’ leading the team to consider ‘SoftArt’ for the company’s name. However, there was another company by the name Software Arts and owing to the similarities in names, the idea was dropped. Electronic Arts and Electronic Artists are some of the names which were floated around at the time and the popular sentiment was towards Electronic Artists. Electronic Artists was a tribute to the film company United Artists, but an employee insisted filmmakers were the real artists, leading to which everyone agreed to Electronic Arts.
Growth of EA
Trip Hawkins was determined to sell directly to buyers and the policy of dealing directly with retailers gave EA better margins and real time market awareness. Game developers were given due credit in games as well as in magazines. The album cover box type packaging like the packaging for games we see now was pioneered by EA. Game development became in house and EA released their first game, Skate or Die! At the same time, they worked with external developers as well. Owing to Trip Hawkins’s obsession to develop a sports game, a contract was signed with football coach John Madden, which led to the development of the popular video game franchise Madden NFL.
Over the decades, EA continued developing games for various platforms like the PlayStation, Nintendo consoles and PCs. EA also acquired its license to develop Star Wars games after LucasArts was shut down by Disney.
EA also released multiple successful franchises like Need for Speed, FIFA, Madden, Star Wars, Battlefield, NBA Live, Medal of Honor and The Sims.
EA changed the way games are perceived and is always on the forefront of innovation. A recent bad publicity incident due to its microtransactions in Star Wars: Battlefront II hurt their image badly, but they quickly bounced back with the game Apex Legends, a battle royale game like Player Unknown Battlegrounds (PUBG.) EA, based on the revenue generated by it, is currently the second largest gaming company in the Americas and Europe, behind Activision Blizzard.
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Entrepreneur Stories
Alphabet’s Q3 Revenue Growth Expected to Slow Amid Rising Competition in Search and YouTube Ads!
Published
2 hours agoon
October 30, 2024Alphabet, Google’s parent company, is projected to report its slowest revenue growth in four quarters on Tuesday, primarily due to heightened competition impacting its core Google Search business and dampening YouTube ad spending. This anticipated slowdown in these key segments is likely to overshadow growth from its cloud-computing unit, which has seen AI-driven gains this quarter. The quarter also marks the first since Anat Ashkenazi succeeded Ruth Porat as Alphabet’s Chief Financial Officer, a role she assumed amidst intensified scrutiny and competitive pressures.
Competitive Landscape
Google’s established dominance in digital advertising is facing new challenges from companies like Amazon and TikTok, which have increasingly attracted advertisers looking to engage large, ready-to-buy audiences. Analysts predict that Google Search and other related revenues will grow by 11.6% in the third quarter, a decrease from 13.8% growth in Q2, according to Visible Alpha data.
Additionally, new entrants like Perplexity AI and ChatGPT are gaining traction in search through generative AI, raising concerns that Google’s perceived slow response to these developments could further disrupt its market stronghold. Analysts at MoffettNathanson anticipate significant changes in Google’s ability to retain its exclusive search advantage on Apple and Android devices in the U.S.
Market Share Dynamics
A recent report from eMarketer indicates that Google’s share of U.S. search ad revenue could fall below 50% next year for the first time in 18 years. Amazon’s share is expected to climb to 24%, while other generative AI players continue to attract advertising dollars. In response, Google has started integrating ads into AI-generated summaries at the top of search results, a strategy analysts believe could help maintain its competitive edge.
Financial Performance
Alphabet’s stock experienced a nearly 9% drop in the three months leading to September, marking its largest quarterly decline since Q3 of 2022. However, it remains up by 17% for the year. Analysts estimate Alphabet’s overall Q3 revenue to have grown by 12.6% to $86.31 billion, slightly below the 13.6% growth seen in the prior quarter.
YouTube’s Revenue Challenges
YouTube has also felt the impact of advertisers shifting budgets toward ad-supported streaming services such as Netflix and Amazon Prime Video. YouTube’s revenue likely grew by 11.5% in Q3, down from a 13% increase in Q2. However, analysts at Truist suggest that YouTube, particularly YouTube TV, may have benefited from increased political ad spending during this quarter.
Bright Spots: Google Cloud
A bright spot for Alphabet remains Google Cloud, which is expected to achieve a 29.2% growth rate, marking the largest jump in seven quarters as companies invest more heavily in its AI offerings, including the Vertex AI platform that allows customers to leverage Google’s AI models or develop custom solutions. Alphabet has flagged higher capital expenditures this year as it expands its AI capabilities.
Cost Management Focus
With Ashkenazi now at the helm as CFO, there is an added focus on cost management amid rising competition. Analysts speculate about the possibility of further cost-cutting measures beyond Alphabet’s limited layoffs planned for 2024. The financial community will closely watch Ashkenazi’s strategies to contain rising expenses while maintaining competitive AI investments in the upcoming quarters.
Conclusion
As Alphabet prepares for its quarterly earnings report, the anticipated slowdown in revenue growth highlights the challenges it faces from increasing competition and shifting advertiser preferences. While Google Cloud shows promising growth driven by AI demand, Alphabet must navigate these pressures carefully to maintain its position as a leader in digital advertising and cloud computing.
The upcoming financial results will provide critical insights into how effectively Alphabet is adapting to these challenges and whether its strategies under new leadership can sustain long-term growth amidst a rapidly evolving tech landscape.
Stories
Lahori Eyes Rs 400 Crore Funding Round to Triple Valuation, Targets Rs 2,700 Crore!
Published
1 day agoon
October 29, 2024Chandigarh-based beverage company Lahori, known for its regional non-alcoholic carbonated drinks, is in advanced talks with multiple investors to secure a Rs 400 crore funding round. This investment could boost its valuation to around Rs 2,700 crore, a significant increase from its previous valuation of Rs 900 crore two years ago, according to sources close to the deal.
Funding Structure and Potential Investors
The funding is expected to involve both primary and secondary transactions, with potential investors including the Abu Dhabi Investment Authority and Motilal Oswal Financial Services. Belgian investment firm Verlinvest, which is Lahori’s first institutional investor holding a 21.2% stake, may partially exit through this transaction. Verlinvest initially invested $15 million in Lahori’s Series A round.
Company Background and Growth Plans
Founded in 2017 by cousins Saurabh Munjal, Saurabh Bhutna, and Nikhil Doda, Lahori currently operates two manufacturing plants located in Punjab and Gujarat. The new funding aims to expand Lahori’s production capacity from 5 million to over 8 million bottles per day, as they prepare to establish another plant in Uttar Pradesh.
The company’s flagship product, Lahori Zeera—a cumin-flavored carbonated beverage—has gained popularity across northern India, alongside their lemon-based drink, Shikanji. The brand’s CEO, Munjal, reported that Lahori generated Rs 312 crore in revenue for the 2023-24 fiscal year and is targeting Rs 500 crore for the current year.
Market Context
Lahori’s expansion comes amid strong growth in India’s non-alcoholic beverage market, which the Indian Beverage Association projects will reach Rs 1.5 lakh crore by 2030, up from approximately Rs 67,000 crore today. This growth is driven by increasing consumer demand for diverse beverage options and healthier alternatives.
Competitive Landscape
The Indian beverage sector is becoming increasingly competitive, with numerous brands vying for market share. Lahori aims to differentiate itself by focusing on unique flavors and regional preferences while expanding its distribution network. The company’s strategy includes leveraging its existing presence in North India while exploring opportunities in other regions.
Financial Performance and Future Outlook
Despite the growing interest in quick-commerce platforms, Lahori’s offline sales account for 99% of its revenue, with North India contributing nearly 75% of total sales. The upcoming funding round will be crucial for scaling operations and enhancing market penetration.
Strategic Goals
With the planned investment, Lahori aims not only to increase production capacity but also to enhance marketing efforts to build brand recognition across India. The focus on expanding into new markets aligns with broader trends in consumer behavior favoring local brands that offer authentic regional flavors.
Conclusion
Lahori’s pursuit of a Rs 400 crore funding round represents a strategic move to triple its valuation and solidify its position within the rapidly growing non-alcoholic beverage market in India. By targeting unique product offerings and expanding production capabilities, Lahori is well-positioned to capitalize on emerging trends in consumer preferences.
As the company navigates this funding round and prepares for future growth, it will be interesting to observe how effectively it can leverage investor support to achieve its ambitious targets while maintaining its commitment to quality and regional authenticity.
Stories
First Cheque Targets 15-20 Startup Investments with Larger Pre-Seed Fund for D2C Focus!
Published
1 day agoon
October 29, 2024Early-stage venture capital firm First Cheque, a part of India Quotient, plans to back 15-20 startups over the next 18 months with its third cohort. This time, First Cheque is setting up initial investments as high as $500,000, reflecting a significant increase in their funding strategy aimed at supporting emerging businesses.
Growing Pre-Seed Funding Landscape
Kanika Agarrwal, a partner at India Quotient, noted the evolving pre-seed funding landscape, stating:
“The pre-seed market offers a variety of funding options today, including angel investors, family offices, and micro VCs. We’re adjusting our program to collaborate with these groups, allowing us to make larger investments.”
This shift highlights First Cheque’s commitment to adapting its investment approach to meet the needs of the current market and to leverage the growing interest in early-stage funding.
Background of First Cheque
Founded in 2018 under the India Quotient umbrella, First Cheque primarily funds early-stage startups with support from family offices and institutions in India and globally. The firm has a sector-agnostic investment strategy but is particularly interested in direct-to-consumer (D2C) startups for this cohort. Agarrwal emphasized the need for brands that stand out in less saturated categories.
“There’s an abundance of D2C brands, but we’re seeking truly unique ones in underrepresented categories—think kids’ brands, sports, white goods, and brands for Gen Z,” she said, highlighting a focus on the younger demographic where “me too” brands are less common.
Investment Strategy and Portfolio
Bengaluru-based First Cheque has already invested in over 130 startups, supporting diverse companies such as jewelry brand Giva, SaaS startup Rocketlane, career platform Seekho, fleet management tool Fleetx, RO water provider DrinkPrime, and generative AI startup Simplismart. The firm aims to leverage its experience and networks to help new ventures scale effectively.
Financial Performance
In its previous funding rounds, First Cheque has successfully raised capital from various investors. For instance, it closed its second fund at approximately ₹38 crore (around $4.75 million) and has been actively involved in nurturing first-time founders through mentorship and resources.
Competitive Landscape
The Indian startup ecosystem is highly competitive, with numerous players vying for market share in various sectors. First Cheque’s focus on D2C brands aligns with broader trends indicating increased consumer preference for personalized shopping experiences. By targeting underrepresented categories, First Cheque aims to differentiate itself from other venture capital firms that may overlook niche markets.
Future Outlook
As First Cheque embarks on this new investment strategy, it will be crucial to monitor how these investments perform in the rapidly changing market landscape. The firm’s ability to identify unique opportunities within the D2C space could position it favorably for future growth and success.
Conclusion
First Cheque’s initiative to target 15-20 startups with larger pre-seed investments marks a significant evolution in its funding strategy. By focusing on D2C brands that offer unique value propositions, the firm aims to capitalize on emerging trends within the Indian startup ecosystem.
As this new cohort unfolds over the next 18 months, it will be interesting to see how First Cheque leverages its resources and networks to support these startups in achieving their growth objectives while navigating the competitive landscape of early-stage investments. The commitment to enhancing the pre-seed funding environment reflects a proactive approach to fostering innovation and entrepreneurship in India.
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