Electronic Arts 2005 Annual Report Download - page 92

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PC
Net revenue from PC-based products decreased from $499 million in Ñscal 2003 to $470 million in Ñscal 2004.
As a percentage of total net revenue, sales of PC products decreased by 4.3 percent in Ñscal 2004. PC net
revenue declined, largely due to declines of sales in the Harry Potter, World Cup and Bond franchises as
discussed above, which were partially oÅset by an increase in sales of the Lord of the Rings franchise.
Mobility
Net revenue from mobile products decreased from $105 million in Ñscal 2003 to $78 million in Ñscal 2004.
The decrease in mobility was primarily due to the expected decline in our Game Boy Color net revenue as we
transitioned away from that platform.
Co-Publishing and Distribution
In Ñscal 2004, net revenue from co-publishing and distribution products increased by $22 million to
$398 million as compared to Ñscal 2003. The increase was due to a $75 million increase in Europe primarily
from increased sales in the Final Fantasy, Freedom Fighters and BattleÑeld franchises, partially oÅset by a
decline in the Kingdom Hearts franchise in North America. Although co-publishing and distribution net
revenue increased, it declined as a percentage of total net revenue.
Subscription Services
In Ñscal 2004, net revenue from subscription services products increased by $4 million to $49 million as
compared to Ñscal 2003. The increase in net revenue was primarily due to the number of subscribers to
Club Pogo (launched in July 2003) and purchasers of Pogo Downloadables (launched in May 2003),
partially oÅset by a decrease in subscription net revenue from The Sims
TM
Online, Ultima Online
TM
, and
Earth & Beyond
TM
subscription services.
Licensing, Advertising and Other
In Ñscal 2004, net revenue from licensing, advertising and other products decreased by $17 million to
$33 million as compared to Ñscal 2003. The decrease was a result of expected declines in our advertising and
programming net revenue following our renegotiation of the terms of our relationship with AOL during the
three months ended June 30, 2003.
Operations by Segment
In March 2003, we consolidated the operations of the EA.com business segment into our core business
because we began to consider online capability and gameplay as integral to our existing and future products.
Accordingly, beginning April 1, 2003, we no longer managed our online products and services as a separate
business segment, and we consolidated the reporting related to our online products and services into reporting
for the overall development and publication of our core products for all reporting periods ending after that
date. This change better reÖected the way in which our Chief Executive OÇcer (our chief operating decision
maker) reviews and manages our business and reÖects the importance of our online products and services
relative to the rest of our business. Concurrently, we eliminated separate reporting for our Class B common
stock for all reporting periods ending after April 1, 2003. Fiscal 2003 has been restated to conform with Ñscal
2004 presentation. See Note 6 of the Notes to Consolidated Financial Statements, included in Item 8 of this
report.
Our view and reporting of business segments may change due to changes in underlying business facts and
circumstances and the evolution of our reporting to our Chief Executive OÇcer.
36