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ELECTRONIC ARTS AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
14
2001 AR
This Annual Report, including the “Letter to Stockholders” at pages 1 to 3 and the following “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”, contains forward-looking statements
about circumstances that have not yet occurred. All statements, trend analysis and other information contained
below relating to markets, our products and trends in revenue, as well as other statements including words such as
“anticipate”, “believe” or “expect” and statements in the future tense are forward-looking statements. These forward-
looking statements are subject to business and economic risks and actual events or our actual future results could
differ materially from those set forth in the forward-looking statements due to such risks and uncertainties. We will
not necessarily update information if any forward-looking statement later turns out to be inaccurate. Risks and
uncertainties that may affect our future results and performance include, but are not limited to, those discussed
under the heading “Risk Factors” at page 30 of this Annual Report and under the same heading in our Annual Report
on Form 10-K for the year ended March 31, 2001.
RESULTS OF OPERATIONS
Comparison of Fiscal 2001 to 2000:
Revenues
We derive revenues primarily from shipments of entertainment software, which includes EA Studio products for
dedicated entertainment systems (that we call video game systems or consoles such as PlayStation, PlayStation 2
and Nintendo 64), EA Studio personal computer products (or PC), Co-Publishing products that are co-published
and distributed by us, and Affiliated Label (or AL) products that are published by third parties and distributed by
us. We also derive revenues from licensing of EA Studio products and AL products through hardware companies
(or OEM), selling subscriptions on our online gaming service, selling advertisements on our online web pages and
selling our packaged goods through our online store.
Information about our net revenues for North America and foreign areas for fiscal 2001 and 2000 is summarized
below (in thousands):
Increase/
2001 2000 (Decrease) % Change
North America $ 831,924 $ 846,637 $ (14,713) (1.7 %)
Europe 386,728 486,816 (100,088) (20.6 %)
Asia Pacific 51,039 53,187 (2,148) (4.0 %)
Japan 52,582 33,371 19,211 57.6 %
International 490,349 573,374 (83,025) (14.5 %)
Consolidated Net Revenues $ 1,322,273 $ 1,420,011 $ (97,738) (6.9 %)
North America Net Revenues
The decrease in North America net revenues for fiscal 2001 compared to fiscal 2000
was primarily attributable to:
• Expected declines in sales of PlayStation and Nintendo 64 (“N64”) titles due to the beginning of the transition to
next generation consoles. PlayStation net revenues decreased 49% and N64 net revenues decreased 46% also
due to fewer titles shipping in the current year for both platforms.
• A 6% decrease in AL revenues primarily due to the acquisition of an affiliate, DreamWorks Interactive, by
Electronic Arts in the fourth quarter of the prior fiscal year.
• Offset partially by the launch of PlayStation 2 platform in North America which generated $171,034,000 in
revenue for the year from titles such as Madden NFL 2001, SSX, NBA Live 2001 and NHL 2001. PlayStation 2 rev-
enues did not offset the decrease in PlayStation revenues due to a reduced number of hardware units reaching
the market due to hardware component shortages, according to Sony.