Electronic Arts 1999 Annual Report Download - page 15

RESULTS OF OPERATIONS
Comparison of Fiscal 1998 to 1997
1998 1997 % change
Net revenues $908,852,000 $ 673,028,000 35.0
Our total net revenues increased compared to the prior year due to increased sales of PlayStation products, increased
worldwide distribution of AL products, sales of N64 video game cartridge products and sales of PC-CD products. This
increase was partially offset by a decrease in sales of 16-bit video game cartridges and License/OEM revenues.
Net revenues from 32-bit CD-video game products, primarily for the PlayStation, were $397,806,000 in fiscal 1998, repre-
senting 44% of the total net revenues compared to $225,875,000, or 34% of total net revenues in fiscal 1997. The increase
in sales of 32-bit video game products was attributable to the greater installed base of PlayStation game consoles and
related releases of key titles for this platform during the year offset by a decline in revenues from sales of products
for Saturn.
Sales of PlayStation products in fiscal 1998 increased to $380,299,000, or 42% of total revenue, compared to $187,531,000,
or 28% of total revenue in fiscal 1997. We released 25 new PlayStation titles in fiscal 1998 compared to 14 in fiscal 1997.
Net revenues derived from the sales of other 32-bit products, primarily from Saturn, were $17,507,000 in fiscal 1998 com-
pared to $38,344,000 in fiscal 1997. As the installed base of Saturn consoles did not achieve the growth rates of PlayStation
consoles, our revenues from sales of Saturn products declined. We released eight new Saturn titles in fiscal 1998
compared to 12 in fiscal 1997.
Net revenues from shipments of AL products in fiscal 1998 increased to $185,865,000, or 20% of total revenue,
compared to $96,696,000, or 14% of total revenue in fiscal 1997. This increase was due to higher sales of AL products
in North America, Europe and Asia Pacific. This increase was attributable to the product releases under a worldwide
exclusive distribution agreement with DreamWorks Interactive, including The Lost World: Jurassic Park, and due to
continued distribution of products from Accolade, Inc. which began in the fourth quarter of fiscal 1997. AL revenues also
increased as a result of our exclusive distribution agreement with Twentieth Century Fox Home Entertainment outside
North America.
Net revenues derived from N64 video game cartridge products were $56,677,000, or 6% of total net revenues, compared
to $17,804,000 in fiscal 1997. We released two titles in fiscal 1998 compared to one title in fiscal 1997.
Net revenues from PC-CD products increased to $231,034,000 in fiscal 1998, representing 25% of total net revenues,
from $216,338,000, or 32% of total net revenues in fiscal 1997. We released 30 PC-CD titles in fiscal 1998 compared
to 32 PC-CD titles in fiscal 1997. The increase in sales of PC-CD products was attributable to the worldwide growth in
the PC market and the expansion of our direct distribution worldwide. PC-CD sales growth for fiscal 1998 was partially
offset by a decline in titles published by Maxis. Maxis’ PC-CD revenues for fiscal 1998 decreased by $17,010,000 or
45% compared to fiscal 1997.
Net revenues generated by 16-bit video game cartridge-based products were $17,314,000, or 2% of total revenues in fiscal
1998, compared to $89,160,000, or 13% of net revenues in fiscal 1997.
Licensing of EA Studio products generated $15,431,000 in fiscal 1998, compared to $26,749,000 in fiscal 1997. The decrease
was primarily the result of a decrease in the revenues generated by the licensing of our products in Europe and Japan.