Electronic Arts 2009 Annual Report Download - page 87

Annual Report
•EA Mobile. Through EA Mobile, we are a leading global publisher of games and other content
(ringtones, images, etc.) for wireless devices. Our customers typically purchase and download our games
through a wireless carrier’s branded e-commerce service accessed directly from their wireless devices.
EA Mobile contracts with outside development and production studios to produce the games it publishes
and, to a lesser extent, develops games for wireless devices internally at development and production
studios located in the United States, Canada, United Kingdom, Romania and India. Our internal
development includes producing variations of the same game for compatibility with a variety of wireless
devices, carriers, and geographies.
Competition
We compete for the leisure time and discretionary spending of consumers with other video game companies, as
well as with other providers of different forms of entertainment, such as motion pictures, television, social
networking, online casual entertainment and music. Our competitors vary in size from very small companies with
limited resources to very large, diversified corporations with global operations and greater financial resources
than ours.
We also face competition from other video game companies and large media companies to obtain license
agreements for the right to use some of the intellectual property included in our products. Some of these content
licenses are controlled by the diversified media companies, which, in some cases, have decided to publish their
own games based on popular entertainment properties that they control, rather than licensing the content to a
video game company such as us.
Competition in Sales of Packaged Goods
The packaged goods videogame business is characterized by the frequent launch of new games, which may be
sequels of popular game franchises, or newly introduced game concepts. There is also rapid technological
innovation in the packaged goods game business as competing companies continually improve their use of the
powerful platforms on which games are designed to run, and extend the game experience through additional
content and online services (such as match-making, and multiplayer functionality). Competition is also based on
product quality and features, timing of product releases, brand-name recognition, availability and quality of
in-game content, access to distribution channels, effectiveness of marketing and price.
For sales of packaged goods, we compete directly with Sony, Microsoft and Nintendo, each of which develop
and publish software for their respective console platforms. We also compete with numerous companies which,
like us, develop and publish video games that operate on these consoles and on PCs and handheld game players.
These competitors include Activision Blizzard, Capcom, Infogrames Entertainment SA, Koei, Konami,
LucasArts, Midway, Namco, Sega, Take-Two Interactive, THQ and Ubisoft. Diversified media companies such
as Fox, Disney, Time Warner and Viacom are also expanding their software game publishing efforts.
Competition in Games for Wireless Devices
The wireless entertainment applications market segment, for which we develop and publish games, ring tones,
music, video and wallpapers for wireless devices, is characterized by frequent product introductions, rapidly
emerging new wireless platforms and new technologies. As demand for applications continues to increase and
the penetration of wireless devices that feature fully-functional browsers continues to grow, we expect new
competitors to enter the market and existing competitors to allocate more resources to develop and market
competing applications. As a result, we expect competition in the wireless entertainment market segment to
intensify.
Current and potential competitors in the wireless entertainment applications market segment include major media
companies, traditional video game publishing companies, wireless carriers, wireless software providers and other
companies that specialize in wireless entertainment applications. We also compete with wireless content
aggregators, who pool applications from multiple developers (and sometimes publishers) and offer them to
7