Electronic Arts 2009 Annual Report Download - page 89

Annual Report
Significant Relationships
Console Manufacturers
Sony. Under the terms of agreements we have entered into with Sony Computer Entertainment Inc. and its
affiliates, we are authorized to develop and distribute disk-based software products and online content
compatible with the PlayStation 2, PLAYSTATION 3 and PSP. Pursuant to these agreements, we engage Sony to
supply PlayStation 2, PLAYSTATION 3 and PSP disks for our products.
Microsoft. Under the terms of agreements we have entered into with Microsoft Corporation and its affiliates,
we are authorized to develop and distribute DVD-based software products and online content compatible with the
Xbox 360.
Nintendo. Under the terms of agreements we have entered into with Nintendo Co., Ltd. and its affiliates, we are
authorized to develop and distribute proprietary optical format disk products and cartridges compatible with the
Wii and the Nintendo DS. Pursuant to these agreements, we engage Nintendo to supply Wii proprietary optical
format disk products and Nintendo DS cartridges for our products.
Retailers
The console, handheld and PC games that we publish are made available to consumers as packaged goods
(usually in Blu-ray Disc, CD, DVD, cartridge or Universal Media Disc format) that are typically sold in retail
stores and through online stores (including our own online store). In North America and Europe, our largest
markets, we sell these packaged goods products primarily to retailers, including mass market retailers (such as
Wal-Mart), electronics specialty stores (such as Best Buy) or game software specialty stores (such as GameStop).
Many of our PC products and related content (such as booster packs, expansion packs and smaller pieces of game
content) can also be purchased over the Internet through digital download.
We generated approximately 96 percent of our North America net revenue from direct sales to retailers in fiscal
year 2009, with the remaining net revenue being generated through a limited number of specialized and regional
distributors in markets where we believe direct sales would not be economical. We had direct sales to GameStop
Corp. which represented approximately 14 percent, 13 percent and 12 percent of total net revenue in fiscal years
2009, 2008 and 2007, respectively. We also had direct sales to Wal-Mart Stores, Inc. which represented
approximately 14 percent, 12 percent and 13 percent of total net revenue in fiscal years 2009, 2008 and 2007,
respectively.
Wireless Carriers
We have agreements to distribute our wireless applications through more than 230 carriers in over 50 countries.
Our customers download our applications to their wireless devices and their wireless carrier invoices them either
a one-time or monthly subscription fee. Our carrier distribution agreements establish the fees to be retained by
the carrier for distributing our applications. These arrangements are typically terminable on short notice. The
agreements generally do not obligate the carriers to market or distribute any of our applications.
Content Licensors
Many of our products are based on or incorporate content and trademarks owned by others. For example, our
products include rights licensed from third parties, including major movie studios, publishers, artists, authors,
celebrities, traditional game and toy companies, athletes and the major sports leagues and players associations.
EA Partners
Through our EA Partners group, we team with external game developers and third party companies, to provide
these partners with a variety of services including development assistance, publishing, and distribution. For
example, in fiscal year 2009, through agreements with Crytek, Valve Software and Harmonix, a subsidiary of
Viacom, we released Crysis Warhead®,Left 4 Dead, and Rock Band 2, respectively.
9