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PART I
This Report contains forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements, other than statements of historical fact, including statements regarding
industry prospects and future results of operations or Ñnancial position, made in this Report are forward
looking. We use words such as ""anticipate'', ""believe'', ""expect'', ""intend'', ""estimate'' (and the negative of
any of these terms), ""future'' and similar expressions to help identify forward-looking statements. These
forward-looking statements are subject to business and economic risk and reÖect management's current
expectations, and are inherently uncertain and diÇcult to predict. Our actual results could diÅer materially.
We will not necessarily update information if any forward-looking statement later turns out to be
inaccurate. Risks and uncertainties that may aÅect our future results include, but are not limited to, those
discussed under the heading ""Risk Factors'', beginning on page 46.
Item 1: Business
Overview
Electronic Arts develops, markets, publishes and distributes interactive software games that are playable by
consumers on the following platforms:
䡵Home videogame machines (such as the Sony PlayStation 2», Microsoft Xbox», Nintendo
GameCube
TM
and Sony PlayStation consoles),
䡵Personal computers (PCs),
䡵Hand-held game machines (such as the Game Boy» Advance), and
䡵Online, over the Internet and other proprietary online networks.
We were initially incorporated in California in 1982. In September 1991, we were reincorporated under the
laws of Delaware. Our principal executive oÇces are located near San Francisco, California at 209 Redwood
Shores Parkway, Redwood City, California 94065 and our telephone number is (650) 628-1500.
One of our strengths is our ability to publish interactive software games for multiple platforms. Our products,
designed to play on consoles and handhelds, are published under license from the manufacturers of these
platforms (for example, Sony for the PlayStation and PlayStation 2, Microsoft for the Xbox and Nintendo for
the Nintendo GameCube and Game Boy Advance) and we pay a fee to these console manufacturers for the
right to publish products on their platforms. We invest in the creation of state-of-the-art software tools that
we use in product development and to convert products from one platform to another. We also make
important investments in facilities and equipment that allow us to create and edit video and audio recordings
that are used in our games. Since our inception, we have published games for over 43 diÅerent platforms.
Our product development methods and organization are modeled on those used in other sectors of the
entertainment industry. Employees whom we call ""producers'' are responsible for overseeing the development
of one or more products. The interactive software games that we develop and publish are broken down into
three major categories: (1) EA studio products, (2) co-publishing products, and (3) distribution products.
EA Studio Products
We develop games internally and also engage third-parties to develop games on our behalf at our development
and production studios located near San Francisco, Los Angeles, Orlando (Florida), Chicago, Vancouver,
Montreal, London and Tokyo. We publish our EA Studio products under three major brands:
䡵EA SPORTS
TM
Ì examples of some of our recent products published under the EA SPORTS brand
are Madden NFL 2004 (professional football), NCAA»Football 2004 (collegiate football), FIFA
Soccer 2004 (professional soccer), NBA Live 2004 (professional basketball), NHL»2004
(professional hockey), MVP Baseball
TM
2004 (professional baseball) and NASCAR Thunder
TM
2004
(stock car racing),
䡵EA GAMES
TM
Ì examples of some of our recent products published under the EA GAMES brand
are The Lord of the Rings
TM
; The Return of the King
TM
, James Bond 007
TM
: Everything or
3