Electronic Arts 2007 Annual Report Download - page 77

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 financial 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 reflect
management’s current expectations, and involve subjects that are inherently uncertain and difficult to
predict. Our actual results could differ materially. We will not necessarily update information if any
forward-looking statement later turns out to be inaccurate. Risks and uncertainties that may affect our
future results include, but are not limited to, those discussed under the heading “Risk Factors”,
beginning on page 13.
Item 1: Business
Overview
Electronic Arts develops, markets, publishes and distributes interactive software games and content that are
playable by consumers on the following devices:
• Video game consoles such as the Sony PlayStation»2 and PLAYSTATION»3, Microsoft Xbox»and
Xbox 360
TM
and Nintendo Wii
TM
,
• Personal computers (PCs),
• Mobile platforms including cellular handsets and handheld game players such as the PlayStation»
Portable (“PSP
TM
”), Nintendo DS
TM
and Game Boy»Advance and iPod», and
• Online (over the Internet and other proprietary online networks).
We also sell advertising in many of our games and on our websites.
We refer to consoles, PCs, mobile platforms and online collectively as “platforms”. In fiscal 2007, we
developed or published products for 13 different platforms. Since our inception, we have published games for
over 50 different platforms. This platform diversification continues to be a cornerstone of our product strategy.
The interactive software games that we develop and publish are broken down into two major categories:
(1) games developed by our EA Studios, and (2) games that we co-publish with, or distribute on behalf of,
another company through our EA Partners group. Our EA Studios games are either developed internally at our
development and production studios located in the United States, Canada, England, Sweden, Germany,
Singapore, China, Romania and India, or by third parties whom we engage to develop games on our behalf at
their own development and production studios. We market, publish and distribute games in over 30 countries
throughout the world.
We market the products produced by our studios under the EA
TM
, EA SPORTS
TM
, EA SPORTS BIG
TM
, and
POGO
TM
brands.
We were initially incorporated in California in 1982. In September 1991, we reincorporated under the laws of
Delaware. Our principal executive offices are located at 209 Redwood Shores Parkway, Redwood City,
California 94065 and our telephone number is [phone].
Development of Our Games
The console, handheld, PC and online games we publish are developed primarily by our EA Studios, while the
games we offer for cellular handsets are developed primarily by third parties. In addition, through our EA
Partners group, we team with other game development companies to assist them with the development of
games on our behalf. For the fiscal years ended March 31, 2007, 2006 and 2005, research and development
expenses were $1,041 million, $758 million and $633 million, respectively.
Annual Report
3