Electronic Arts 2007 Annual Report Download - page 121

Download and view the complete annual report

Please find page 121 of the 2007 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 193

  • 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

and The Urbz franchises, none of which had fiscal 2006 releases, and (2) lower sales of fiscal 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 fiscal 2005 as compared to one title in fiscal 2006. The overall decrease in net
revenue was mitigated by the release of Battlefield 2: Modern Combat, BLACK and The Godfather The Game,
none of which had a corresponding release in fiscal 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 fiscal 2006, driven by sales of Need for Speed Most
Wanted,Madden NFL 06 and EA SPORTS Fight Night Round 3. We released seven titles for the Xbox 360 in
fiscal 2006.
Nintendo GameCube
For fiscal 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 fiscal 2006, as compared to 20 titles in fiscal 2005.
Overall, Nintendo GameCube net revenue decreased $77 million, or 36 percent, as compared to fiscal 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 fiscal 2006. From a title and franchise perspective, the decrease in net revenue in fiscal 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 fiscal 2006 releases, and (2) lower sales of fiscal 2006 releases from our
Need for Speed and Bond franchises.
PC
For fiscal 2006, net revenue from sales of titles for the PC was $418 million, driven primarily by sales of titles
from The Sims franchise and Battlefield 2. We released 22 titles for the PC during fiscal 2006, as compared to
21 titles in fiscal 2005. Overall, PC net revenue decreased $113 million, or 21 percent, as compared to fiscal
2005. The decrease was primarily due to (1) significantly higher fiscal 2005 sales of The Sims 2, (2) lower
sales from our Medal of Honor
TM
franchise as there were no corresponding titles released during fiscal 2006,
and (3) lower sales from our Lord of the Rings franchise. The overall decrease in net revenue was mitigated
by sales of products from our Battlefield franchise in fiscal 2006. On January 27, 2005, we began
consolidating the financial results of DICE into our financial statements, and, therefore, have characterized
Battlefield 2 PC-based revenue as part of our PC product line. Prior to consolidating DICE’s financial results,
we classified revenue from the Battlefield franchise as co-publishing and distribution revenue.
Mobile Platforms
Net revenue from mobile products — consisting of packaged goods games for handheld systems and
downloadable games for cellular handsets — increased from $118 million in fiscal 2005 to $393 million in
fiscal 2006. The increase was primarily due to sales of titles released in fiscal 2006 for the PSP, and the
Nintendo DS, both of which were launched in fiscal 2005 in certain countries. We released 16 titles for the
PSP during fiscal 2006, as compared to three titles in fiscal 2005. Overall, PSP net revenue increased
$234 million, driven primarily by sales of titles from our Need for Speed, FIFA, Burnout and Madden
franchises. We released ten titles for the Nintendo DS during fiscal 2006, as compared to three titles in fiscal
2005. Nintendo DS net revenue increased $44 million, driven primarily by sales of titles from our Need for
Speed, The Sims and Madden franchises. The increase in PSP and Nintendo DS net revenue was partially
offset by lower sales of titles for the Game Boy Advance.
Annual Report
47