Electronic Arts 2000 Annual Report Download - page 34

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We do not anticipate any material impact from the Euro conversion on our financial information systems which currently
accommodate multiple currencies. Computer software changes necessary to comply with the Year 2000 issue are generally
compliant to the Euro conversion issue. Due to numerous uncertainties, we cannot reasonably estimate the effect that the Euro
conversion issue will have on our pricing or market strategies, and the impact, if any, it will have on our financial condition and
results of operations.
RISK FACTORS
Our business is subject to many risks and uncertainties which may affect our performance. Some of those risks and uncertain-
ties are as follows:
•Platform transitions such as the one now occurring typically depress the market for videogame software until new platforms
achieve a wide market acceptance.
•New video game platforms create additional technical and business model uncertainties.
•Our significant investment in EA.com may not be successful or generate profits.
•Product development schedules are frequently unreliable particularly for products for new platforms and make predicting
quarterly results difficult.
•The business models and technology for e-Commerce and online gaming are unproven.
•Our business, our products and our distribution are subject to increasing regulation in key territories.
•Our platform licensors are our chief competitors and frequently control the manufacturing of our video game products.
•We face intense competition for talent from highly valued Internet companies.
For a discussion of these and other important risk factors, see the heading “Risk Factors” in our Annual Report on Form 10-K
for the year ended March 31, 2000.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
We are exposed to various market risks, including the changes in foreign currency exchange rates and interest rates. Market
risk is the potential loss arising from changes in market rates and prices. Foreign exchange contracts used to hedge foreign cur-
rency exposures and short-term investments are subject to market risk. We do not consider our cash and cash equivalents to
be subject to interest rate risk due to their short maturities. We do not enter into derivatives or other financial instruments for
trading or speculative purposes.
MD&A
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