Electronic Arts 2010 Annual Report Download - page 82

other games, content and services that we offer, such as games for mobile devices, and Internet-only games, are
available only through online delivery. We believe that 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™,Mass Effect™ and Battlefield™,and newly launched properties 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™ and Hasbro. Through our EA
Partners business, we also co-develop, co-publish and/or distribute video games that are developed and published
by other companies, including the MTV Games/Harmonix series Rock Band™ and the Crytek series Crysis®.
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 Battlefield are sequeled on a less-frequent basis. We refer to these successful, iterated
product families as “franchises.” We also make add-on content available for purchase online or through
expansion packs sold at retail for many of our products.
We develop our games using both internal and external resources. For the fiscal years ended March 31, 2010,
2009 and 2008, research and development expenses were $1,229 million, $1,359 million and $1,145 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), EA Romania, Maxis
(United States), Playfish (United States, United Kingdom, China and Norway), EA Salt Lake City (United
States), EA Seoul Studio (Korea), EA Singapore, EA Mythic (United States), Pogo (United States and China),
The Sims Studio (United States), EA Tiburon (United States), and Visceral (United States).We have quality
assurance functions located in the United States, Canada, the United Kingdom, Sweden, Germany, Romania,
China, India, Korea, and Singapore and localization functions located in Germany, 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 products. Many of our games, and other online content, are also available to consumers via proprietary
networks, such as the Xbox LIVE®Marketplace on the Xbox 360 console and the PlayStation Network on the
PLAYSTATION 3 and PSP consoles, or via the Internet, including our own online stores. We also market and
distribute games and other content for mobile devices through mobile carriers and proprietary online stores that
provide applications for specific devices (i.e., mobile application storefronts such as the Apple App Store, which
provides applications for the Apple iPhone and iPod Touch, or Google’s Android Market for Android compatible
phones).
Our North America net revenue, which was primarily generated in the United States, decreased by 16 percent to
$2,025 million, or 55 percent of total net revenue in fiscal year 2010, as compared to $2,412 million, or 57
percent of total net revenue in fiscal year 2009 and as compared to $1,942 million, or 53 percent of total net
revenue in fiscal year 2008. Internationally, we conduct business through our international headquarters in
Switzerland and have wholly-owned subsidiaries throughout the world, including offices in Europe, Australia,
Asia and Latin America. International net revenue (i.e., net revenue derived from countries other than Canada
and the United States) decreased by 10 percent to $1,629 million, or 45 percent of total net revenue in fiscal year
2010, as compared to $1,800 million, or 43 percent of total net revenue in fiscal year 2009 and as compared to
$1,723 million, or 47 percent of total net revenue in fiscal year 2008.
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