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E L E C T R O N I C A R T S
1
TO OUR S T O C K H O L D E R S
Fiscal year 2001 was both a challenging and exciting period for our company and for the industry. The transition
f r om the current generation of game consoles to next generation systems continued, marked by the debut of the
first entry in the next wave of new technology – the PlayStation
®
2 computer entertainment system from Sony.
Nintendo and Microsoft will launch new platforms later this year, creating unprecedented levels of competition,
c reativity and excitement for consumers. Most import a n t l y, this provides a unique opportunity for Electro n i c
A rts to drive revenue and pro fit growth as we move through the next technology cycle. In conjunction with
steady increases in the PC market, plus the significant new opportunity in online gaming, we believe Electro n i c
A rts is poised to achieve new levels of success and leadership in the interactive entertainment category.
In FY01, consolidated net revenue decreased 6.9 percent to $1,322 million. As a result of our investment
in building the leading Internet gaming website, consolidated net income decreased $128 million to a consoli-
dated net loss of $11 million, while consolidated diluted earnings per share decreased $0.96 to a diluted loss
per share of $0.08. Pro forma consolidated net income and earnings per share, excluding goodwill, non-cash
and one-time charges were $6 million and $0.04, re s p e c t i v e l y, for the year.
LEADERSHIP ON FOUR STRATEGIC INITIAT I V E S
EA has established four key strategic initiatives by which we measure our perf o r mance. We pledged to become
the number one publisher on next generation consoles, number one on the PC platform, and the number one
p rovider of interactive entertainment on the Internet. Our fourth key initiative is to be the number one “People
Company” in the entertainment industry.
I would like to share with you our assessment of how we perf o rmed against each of these strategic initia-
tives in fiscal year 2001.
Strategic Initiative #1 – Leadership on Next Generation Consoles
Although early in the game, EA has carv e d
out the leading position on the PlayStation 2 console, the first of the next generation consoles. In Nort h
America, we achieved a 44 percent market share for this platform during the intro d u c t o ry period thro u g h
December and maintained a 40 percent share during the March quarter based on dollar sales. In total, we
released fifteen new products for this system in less than a six-month period, making EA by far the most
p ro l i fic publisher for the PlayStation 2 console. We led the best-seller charts with titles and franchises like
Madden NFL™
,NBA Live and S S X, our new snowboarding game. Both M a d d e n and S S X have already sold
m o re than one million units each on this new platform. In Europe, we estimate we achieved a 35 perc e n t
s h a re across all territories on the PlayStation 2 for the calendar year ended December 2000, based on dollar
sales, led by F I FA Soccer and S S X. In Japan, our F I FA Soccer World Championship reached number one on
the charts, and we firmly established ourselves as the leading US-based publisher in this market. While we
do not expect to sustain market share at this level on the PlayStation 2, we have demonstrated our stre n g t h
in development and publishing and firmly established ourselves as a leader on this console. We have
announced support for both the Xbox™video game console from Microsoft and the Nintendo GameCube™
,
which will debut later this year. In summary, we succeeded well beyond our expectations on the
PlayStation 2; we believe we are well positioned to succeed on Xbox and Nintendo GameCube; and we fully
expect to achieve our goal of leadership on next generation consoles.