Electronic Arts 2006 Annual Report Download - page 114

Download and view the complete annual report

Please find page 114 of the 2006 Electronic Arts annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 196

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196

PlayStation 2 to continue to decrease in Ñscal 2007 as we move through the transition to next-generation
consoles. From a title and franchise perspective, the decrease in net revenue was primarily due to
(1) lower sales from our Lord of the Rings, The Urbz, Def Jam, NFL Street and NBA Street franchises,
none of which had Ñscal 2006 releases, and (2) lower sales of Ñscal 2006 releases from our Need for
Speed and Bond franchises as well as lower sales of our Fight Night franchise from which two titles were
released in Ñscal 2005 as compared to one title in Ñscal 2006. The overall decrease in net revenue was
mitigated by the releases of The Godfather
TM
The Game, BLACK
TM
, Medal of Honor European Assault
TM
,
and BattleÑeld 2: Modern Combat none of which had a corresponding release in Ñscal 2005.
Xbox
For Ñscal 2006, net revenue from sales of titles for the Xbox was $400 million, driven primarily by sales of
Madden NFL 06, Need for Speed Most Wanted, NCAA Football 06 and Burnout Revenge. We released
28 titles for the Xbox during Ñscal 2006, as compared to 26 titles in Ñscal 2005. Overall, Xbox net revenue
decreased $116 million, or 22 percent, as compared to Ñscal 2005. We believe the transition to next-
generation consoles, particularly the launch of the Xbox 360 during the last half of Ñscal 2006, adversely
impacted our net revenue from sales of titles for the Xbox in Ñscal 2006. We expect net revenue from
sales of titles for the Xbox to continue to decrease in Ñscal 2007 as we move through the transition and
the Xbox 360 installed base grows. From a title and franchise perspective, the decrease in net revenue was
primarily due to (1) lower sales from our Lord of the Rings, NFL Street, Def Jam, NBA Street and The
Urbz franchises, none of which had Ñscal 2006 releases, and (2) lower sales of Ñscal 2006 releases from
our Need for Speed and Bond franchises as well as lower sales of our Fight Night franchise from which
two titles were released in Ñscal 2005 as compared to one title in Ñscal 2006. The overall decrease in net
revenue was mitigated by the release of BattleÑeld 2: Modern Combat, BLACK and The Godfather The
Game, none of which had a corresponding release in Ñscal 2005.
Xbox 360
The Xbox 360 was launched in North America, Europe and Japan during the three months ended
December 31, 2005, and in the rest of Asia during the three months ended March 31, 2006. As of
March 31 2006, the installed base of the Xbox 360 continued to be small compared to the installed base
of the Xbox. Net revenue from sales of titles for the Xbox 360 was $140 million for Ñscal 2006, driven by
sales of Need for Speed Most Wanted, Madden NFL 06 and EA SPORTS
TM
Fight Night Round 3. We
released seven titles for the Xbox 360 in Ñscal 2006. We expect net revenue from sales of titles for the
Xbox 360 to increase in Ñscal 2007 as the installed base grows and we release more titles.
Nintendo GameCube
For Ñscal 2006, net revenue from sales of titles for the Nintendo GameCube was $135 million, driven
primarily by sales of Need for Speed Most Wanted, Harry Potter and the Goblet of Fire and Madden
NFL 06. We released 14 titles for the Nintendo GameCube during Ñscal 2006, as compared to 20 titles in
Ñscal 2005. Overall, Nintendo GameCube net revenue decreased $77 million, or 36 percent, as compared
to Ñscal 2005, consistent with the percentage decline in the number of titles we released for this platform.
We believe the transition to next-generation consoles adversely impacted our net revenue from sales of
titles for the Nintendo GameCube in Ñscal 2006. We expect net revenue from sales of titles for the
GameCube to continue to decrease in Ñscal 2007 as we move through the transition to next-generation
consoles. From a title and franchise perspective, the decrease in net revenue in Ñscal 2006 was primarily
due to (1) lower sales from our Lord of the Rings, The Urbz, NBA Street, NFL Street and Def Jam
franchises, none of which had Ñscal 2006 releases, and (2) lower sales of Ñscal 2006 releases from our
Need for Speed and Bond franchises.
PC
For Ñscal 2006, net revenue from sales of titles for the PC was $418 million, driven primarily by sales of
titles from The Sims franchise and BattleÑeld 2. We released 22 titles for the PC during Ñscal 2006, as
42