In 2002, Electronic Arts (EA) is preparing to launch one of the most highly anticipated gaming products in industry history: The Sims Online. The product's predecessor – The Sims – is the most successful PC game to-date, which has led to the lofty expectations for the new interactive product. Prior to release, however, EA faces some significant decisions regarding its marketing strategy, particularly with respect to segment targeting, pricing, and customer registration.
             In order to provide some perspective on these decisions, it is first necessary to analyze the situation faced by EA:
             Context: Overall, the PC/console gaming industry can be characterized as highly competitive, seasonal, and cyclical. Very few products reach break-even profitability, and, of those that do, the product life is short (six months). With respect to online games, subscription-based platforms have, thus far, proven disappointing: of the estimated 90 million online gamers, only about one million are willing to pay for the games. Of this online gaming market, EA.com claimed a 42% market share.
             Company: In 2002, EA holds the largest market share in the world's PC and console gaming industry, boasting a top five market share position across all game platforms. Its ace PC product – The Sims – is the most successful PC game in industry history, selling over 16 million units worldwide. Aside from providing quality content, EA also offers an extensive distribution system that allows the company to maintain a competitive advantage in a rapidly changing business environment. Given the level of success achieved with The Sims, as well as the level of market anticipation, EA faces extreme pressures to deliver a hit sequel with TSO.
             Consumers: An estimated 60% of Americans play PC/console games, and the market appears to grow with each successive generation. Potential TSO customers fall within on
             ...