Electronic Arts 2002 Annual Report Download - page 24

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Online Subscription Net Revenues
The increase in online revenues for fiscal 2002 as compared to fiscal 2001 was primarily attributable to
the following:
|•••»An increase in the number of paying customers for
Ultima Online™
to 207,000 as of March 31, 2002
as compared to 203,000 as of March 31,2001.This increase was primarily due to the continued strong
sales of
Ultima Online Third Dawn
and the release of
Ultima Online Lord Blackthorn’s Revenge
in
February 2002. In addition, the launch of
Motor City Online
in October 2001, which contributed
$1,500,000 in subscription revenues for fiscal 2002.
|•••»Offset by a decrease in subscription revenues of $5,000,000 for Gamestorm, Kesmai Corporation
(“Kesmai”) and Worldplay online games (most of which were transferred to our free service when the
EA/AOL site went live in October 2000) in fiscal 2002 as compared to fiscal 2001.
License, OEM and Other Revenues
The increase in license, OEM and other revenues for the twelve months ended March 31, 2002 was primarily
due to a new OEM agreement with a customer in Europe and higher revenues in North America.
Nintendo 64 Product Net Revenues
We released one N64 title in fiscal 2002 compared to three titles during fiscal 2001.The expected decrease
in N64 revenues for the fiscal year, compared to the prior fiscal year, was primarily due to the declining
marketfor N64 products and fewer titles released on this platform in the current fiscal year.We do not
intend to release any new N64 products in fiscal 2003.
Online Packaged Goods Net Revenues
Online Packaged Goods revenues for fiscal 2002 were slightly higher than fiscal 2001 primarily due to the
release of
Motor City Online
in October 2001.
Affiliated Label Product Net Revenues
AL product sales increased for fiscal 2002 compared to the prior fiscal year primarily due to strong sales of hit
titles including
Devil May Cry
and
Resident Evil: Code Veronica
resulting from new distribution deals with
Capcom as well as
The Simpsons™Road Rage
in the current year.This was partially offset by lower revenues
from shipment of Square EA products due to fewer titles released in fiscal 2002 compared to fiscal 2001.
OPERATIONS BY SEGMENT
Management considers EA.com to be a separate reportable segment.We operate in two principal business
segments globally (see Note 2 of the Notes to Consolidated Financial Statements):
|•••»EA Core business segment: creation, marketing and distribution of entertainment software.
|•••»EA.com business segment: creation, marketing and distribution of entertainment software which can be
played or sold online, ongoing management of subscriptions of online games and website advertising.
EA.com represents Electronic Arts’ online and e-Commerce businesses. EA.com’s business includes sub-
scription revenues collected for Internet game play on our websites, website advertising, sales of packaged
goods for Internet-only based games and sales of Electronic Arts games sold through the EA.com web store.
The Consolidated Statements of Operations includes all revenues and costs directly attributable to EA.com,
including charges for shared facilities, functions and services used by EA.com and provided by EA Core.
Certain costs and expenses have been allocated based on management’s estimates of the cost of services
provided to EA.com by EA Core.
EA 2002 AR
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