Electronic Arts 2009 Annual Report Download - page 84

for wireless devices, and Internet-only games, are available only through electronic delivery. We believe that
electronic (i.e., online) delivery of game content and services will become an increasingly important part of our
business over time.
Our games span a diverse range of categories, including action-adventure, casual, sports, family, fantasy, racing,
music, massively-multiplayer online role-playing, simulation and strategy. We have created, licensed and acquired a
strong portfolio of intellectual property, which we market and sell to a variety of consumers. Our portfolio of
wholly-owned properties includes established brands such as Need for Speed™, The Sims™, Spore™, Dead
Space™ and Battlefield, and games scheduled to debut in fiscal year 2010 such as EA SPORTS™ Active™, Dragon
Age™: Origins and Dante’s Inferno™.Our portfolio of games based on licensed intellectual property includes
sports-based titles such as Madden NFL Football, FIFA Soccer and Tiger Woods PGA Tour®, and titles based on
popular brands such as Harry Potter™, The Godfather™, and Hasbro. Through our EA Partners business, we also
co-develop, co-publish and distribute video games that are developed and published by other companies, including
the MTV Games/Harmonix franchise Rock Band and the Valve Software game Left 4 Dead.
Another cornerstone of our strategy is to publish products that can be iterated, or sequeled. For example, a new
edition for most of our sports products, such as Madden NFL Football, is released each year. Other products,
such as The Sims and Godfather, are sequeled on a less-frequent basis. We refer to these successful, iterated
product families as “franchises.”
We develop our games using both internal and external resources. For the fiscal years ended March 31, 2009,
2008 and 2007, research and development expenses were $1,359 million, $1,145 million and $1,041 million,
respectively. We operate development studios (which develop products and perform other related functions)
worldwide: BioWare (Canada and United States), Bright Light (United Kingdom), Criterion (United Kingdom),
DICE (Sweden), EA Canada, EA Los Angeles (United States), EA Montreal (Canada), Visceral (United States),
EA Romania, EA Salt Lake City (United States), Mythic Entertainment (United States), Pogo (United States and
China), Pandemic (United States), The Sims (United States) and Tiburon (United States). We have quality
assurance functions located in China, India, Korea, Singapore and Spain and localization functions located in
France, Germany, Italy, Romania, Spain and Japan. We also engage third-parties to assist with the development
of our games at their own development and production studios.
Our global sales network allows us to market, publish and distribute games in over 35 countries throughout the
world. We generate a significant portion of our net revenue from direct sales of packaged goods products to
retailers and in some of our smaller international territories, we work with third parties to distribute our packaged
goods games. Many of our games, and other online content, are also available to consumers via the Internet,
including our own online store. We also market and distribute games and other content for wireless devices
through wireless carriers.
Our North America net revenue, substantially all of which was generated in the United States, increased by 24
percent to $2,412 million, or 57 percent of total net revenue in fiscal year 2009, as compared to $1,942 million,
or 53 percent of total net revenue in fiscal year 2008 and as compared to $1,666 million, or 54 percent of total net
revenue in fiscal year 2007. Internationally, we conduct business and have wholly-owned subsidiaries throughout
the world, including offices in Europe, Australia, Asia and Latin America. International net revenue increased by
4 percent to $1,800 million, or 43 percent of total net revenue in fiscal year 2009, as compared to $1,723 million,
or 47 percent of total net revenue in fiscal year 2008 and as compared to $1,425 million, or 46 percent of total net
revenue in fiscal year 2007.
The amounts of net revenue and long-lived assets attributable to each of our geographic regions for each of the
last three fiscal years are set forth in Note 18 of the Notes to Consolidated Financial Statements, included in
Item 8 of this report.
In fiscal year 2009, no titles accounted for 10 percent or more of our total net revenue. In fiscal year 2008, sales
of Rock Band, distributed for three platforms, represented approximately 10 percent of our total net revenue. In
fiscal year 2007, we had two titles, Need for Speed Carbon and Madden NFL 07, published on 10 platforms, each
of which represented approximately 11 percent of our total net revenue.
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