Electronic Arts 2006 Annual Report Download - page 87
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Manufacturing and Suppliers
The suppliers we use to manufacture our packaged goods games can be characterized in three types:
‚ Manufacturing entities that press our game disks,
‚ Entities that print our game instruction booklets, and
‚ Entities that package the disks and printed game instruction booklets into the jewel cases and boxes
for shipping to customers.
Our online games and cellular handset applications are delivered digitally, and therefore, are not
manufactured.
In many instances, we are able to acquire materials on a volume-discount basis. We have multiple
potential sources of supply for most materials, except for the disk component of our PlayStation 2, PSP
and Nintendo GameCube disk products, as well as Nintendo DS cartridges, as discussed in ""SigniÑcant
Relationships''. We also have alternate sources for the manufacture and assembly of most of our products.
To date, we have not experienced any material diÇculties or delays in production of our software and
related documentation and packaging. However, a shortage of components, manufacturing delays by Sony,
Nintendo or other vendors, or other factors beyond our control could impair our ability to manufacture, or
have manufactured, our products.
Backlog
We typically ship orders immediately upon receipt. To the extent that any backlog may or may not exist at
the end of a reporting period, it would be both coincidental and an unreliable indicator of future results of
any period.
Seasonality
Our business is highly seasonal. We typically experience our highest revenue and proÑt in the holiday
season quarter ending in December and a seasonal low in revenue and proÑt in the quarter ending in June.
Our results however can vary based on title release dates, consumer demand for our products and shipment
schedules, among other factors.
Annual Report
Employees
As of March 31, 2006, we employed approximately 7,200 people, of whom over 4,000 were outside the
United States. We believe that our ability to attract and retain qualiÑed employees is a critical factor in
the successful development of our products and that our future success will depend, in large measure, on
our ability to continue to attract and retain qualiÑed employees. To date, we have been successful in
recruiting and retaining suÇcient numbers of qualiÑed personnel to conduct our business successfully. We
believe that our relationships with our employees are strong. Less than three percent of our employees, all
of whom work for our Swedish development subsidiary, are represented by a union, guild or other
collective bargaining organization.
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