Electronic Arts 2008 Annual Report Download - page 6

Finally, we executed on two major strategic initiatives. We completed the acquisition of BioWare and
Pandemic Studios, which together brought to EA 10 new intellectual properties and added to our team of
incredibly talented people. We also announced a long-term partnership with Hasbro whereby EA will develop
content from Hasbro’s incredible stable of properties such as MONOPOLY, NERF and LITTLEST PET SHOP.
We expect each of these initiatives to add to EA’s profitable growth for years to come.
Net, we’re pleased with our progress on the top line and put in place strategies that we believe will accelerate
profitable growth in the future.
Our Change Agenda
We began FY08 with the recognition that recent business trends — technology transformation, shifting
consumer preferences and the competitive landscape — called for a big change at EA. To address these, we
outlined four clear strategic objectives for the next three years.
1. Increase Segment Shares — We set a long-term goal to increase our packaged goods segment share
from the mid-teens to the low 20’s on a global basis.
2. Improve Margins With Cost Efficiency and Increased Productivity — We established goals to
substantially increase our operating margins.
3. Expand Digital Revenue — While we will continue to build our traditional packaged goods business,
digital direct-to-consumer business models of subscription, digital downloads, micro-transactions and
advertising will be a major part of EA’s revenue mix in the years to come.
4. Execute Smart Mergers and Acquisitions — Smart M&A brings new creative teams and intellectual
properties which can be leveraged by the unique strength of EA’s global publishing infrastructure. In
addition, we are also targeting transactions that will accelerate our move to digital direct-to-consumer
revenue streams.
To deliver on these strategic objectives, we re-organized our Company and brought in key new leaders.
We created four labels, each focused on a particular set of consumers, properties and development teams. The
key here is focus — each label brings together studios and product marketing teams with a common mission
of creating great content and growing the business in a profitable way.
EA CASUAL ENTERTAINMENT LABEL — led by industry veteran Kathy Vrabeck, is responsible
for establishing a leadership position in the fast-growing market for games played by families, women
and kids. They are focused on lighter games and platforms like mobile and casual online gaming.
EA GAMES LABEL —Frank Gibeau, an executive with an incredible eye for games, is responsible
for growing our largest label. EA Games includes powerhouses like Need for Speed, massive multi-player
games like Warhammer Online, new properties like SPORE and independent games published through
EA Partners. This label is chartered with making blockbuster titles that appeal to core gamers around the
world.
THE SIMS LABEL — led by 24-year EA veteran Nancy Smith, is the group that established the
template for our re-organization. The Sims team is focused on expanding the brand by creating
experiences that allow our users to be creative and social in their game play. The Sims brand recently
sold their 100 millionth disc — a huge milestone for our industry.
EA SPORTS LABEL — led by another industry leader and innovator, Peter Moore, is focused on
extending the reach and profitability of the most widely recognized brand in interactive entertainment.
With both league licenses and original properties, they start every season with a new game packed with
innovation and updated features, players, teams and stadiums. Every year, EA SPORTS games just keep
getting better.
We also appointed John Pleasants, an executive with deep experience in both traditional and online
businesses, as EA’s COO and President of Global Publishing. This role consolidates responsibility for our
global publishing business and provides leadership to drive the Company’s digital transformation.