Electronic Arts 2008 Annual Report Download - page 114

During fiscal 2008 and 2007, we recognized total net revenue of $3,665 million and $3,091 million,
respectively. Our total net revenue during fiscal 2008 includes $831 million recognized from sales of certain
online-enabled packaged goods and digital content for which we were not able to objectively determine the
fair value (as defined by U.S. Generally Accepted Accounting Principles for software sales) of a free online
service that we provided in connection with the sale. The deferral of net revenue related to certain of our
packaged goods and digital content sales, which will be recognized in future periods, decreased our reported
net revenue by $355 million during fiscal 2008, as compared to the same period a year ago.
From a geographical perspective, our total net revenue for the fiscal years ended March 31, 2008 and 2007
was as follows (in millions):
2008 2007 Increase
%
Change
Year Ended March 31,
North America ............................... $1,942 53% $1,666 54% $276 17%
Europe ..................................... 1,541 42% 1,261 41% 280 22%
Asia....................................... 182 5% 164 5% 18 11%
International ................................. 1,723 47% 1,425 46% 298 21%
Total Net Revenue .......................... $3,665 100% $3,091 100% $574 19%
North America
For fiscal 2008, net revenue in North America was $1,942 million, driven by sales of Rock Band, Madden
NFL 08, and NCAA Football 08.
Net revenue for fiscal 2008 increased 17 percent as compared to fiscal 2007. The deferral of net revenue
related to certain of our packaged goods and digital content sales, which will be recognized in future periods,
decreased our reported net revenue by $158 million during fiscal 2008. From an operational perspective, the
increase in net revenue was driven by (1) a $445 million increase in net revenue from co-publishing and
distribution titles (which does not include an additional $10 million of deferred net revenue that will be
recognized in future periods), and (2) a $118 million increase in net revenue from sales of titles for the Wii
(which does not include an additional $17 million of deferred net revenue that will be recognized in future
periods). These increases were partially offset by (1) a $208 million decrease in net revenue from sales of
titles for the PlayStation 2 (this decrease will be partially offset, however, by $29 million of deferred net
revenue that will be recognized in future periods), and (2) a $105 million decrease in net revenue from sales
of titles for the Xbox.
We continue to expect net revenue in North America to increase during fiscal 2009 as compared to fiscal
2008.
Europe
For fiscal 2008, net revenue in Europe was $1,541 million, driven by sales of FIFA 08, Need for Speed
ProStreet, and The Simpsons Game. Net revenue for fiscal 2008 increased 22 percent as compared to fiscal
2007. We estimate that foreign exchange (primarily the Euro and the British pounds sterling) increased
reported net revenue by approximately $113 million, or 9 percent, for fiscal 2008 as compared to fiscal 2007.
Excluding the effect of foreign exchange rates, we estimate that net revenue increased by approximately
$167 million, or 13 percent, for fiscal 2008 as compared to fiscal 2007.
The deferral of net revenue related to certain of our packaged goods and digital content sales, which will be
recognized in future periods, decreased our reported net revenue by $169 million during fiscal 2008. From an
operational perspective the increase in net revenue was driven by (1) a $109 million increase in net revenue
from sales of titles for the PLAYSTATION 3 (which does not include an additional $86 million of deferred net
revenue that will be recognized in future periods), (2) $108 million of net revenue from sales of titles for the
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