Electronic Arts 2011 Annual Report Download - page 98

revenue over a longer period of time. We expect that a significant portion of our games will be online-enabled in
the future and we could be required to recognize the related revenue over an extended period of time rather than
at the time of sale. As we enhance, expand and diversify our business and product offerings, the application of
existing or future financial accounting standards, particularly those relating to the way we account for revenue
and taxes, could have a significant adverse effect on our reported results although not necessarily on our cash
flows.
We have begun the implementation of a new integrated financial information system to be used
throughout our worldwide organization. If this implementation is not completed in a successful and timely
manner or if the new system fails to perform as expected, our ability to accurately process, prepare and
analyze important financial data could be impeded and our business operations may be disrupted.
As part of our effort to improve efficiencies throughout our worldwide organization, we have begun the
implementation of a new integrated financial information system. This implementation is expected to be
completed by January 2012. This system will integrate our order management, product shipment, cash
management and financial accounting processes, among others. The successful conversion from our current
multiple financial information systems to this new integrated financial information system entails a number of
risks due to the complexity of the conversion and implementation process. Such risks include verifying the
accuracy of the business data and information prior to conversion, the actual conversion of that data and
information to the new system and then using that business data and information in the new system after the
conversion. While testing of these new systems and processes and training of employees are done in advance of
implementation, there are inherent limitations in our ability to simulate a full-scale operating environment in
advance of implementation. There can be no assurance that the conversion to, and the implementation of, the new
financial information system will not impede our ability to accurately and timely process, prepare and analyze
the financial data we use in making operating decisions and which form the basis of the financial information we
include in the periodic reports we file with the SEC. In addition, a number of important operational functions,
including receiving product orders, product shipments and inventory maintenance, among others, will be reliant
on the new system and therefore, any problems with the implementation or other system problems may result in a
disruption to our business operations.
We rely on business partners in many areas of our business and our business may be harmed if they are
unable to honor their obligations to us.
We rely on various business partners, including third-party service providers, vendors, licensing partners,
development partners, and licensees, among others, in many areas of our business. In many cases, these third
parties are given access to sensitive and proprietary information in order to provide services and support to our
teams. These third parties may misappropriate our information and engage in unauthorized use of it. The failure
of these third parties to provide adequate services and technologies, or the failure of the third parties to
adequately maintain or update their services and technologies, could result in a disruption to our business
operations. Further, the disruption in the financial markets and the global economic downturn may adversely
affect our business partners and they may not be able to continue honoring their obligations to us. Some of our
business partners are highly-leveraged or small businesses that may be particularly vulnerable in the current
economic environment. Alternative arrangements and services may not be available to us on commercially
reasonable terms or we may experience business interruptions upon a transition to an alternative partner or
vendor. If we lose one or more significant business partners, our business could be harmed.
Our stock price has been volatile and may continue to fluctuate significantly.
The market price of our common stock historically has been, and we expect will continue to be, subject to
significant fluctuations. These fluctuations may be due to factors specific to us (including those discussed in the
risk factors above, as well as others not currently known to us or that we currently do not believe are material), to
changes in securities analysts’ earnings estimates or ratings, to our results or future financial guidance falling
below our expectations and analysts’ and investors’ expectations, to factors affecting the entertainment,
computer, software, Internet, media or electronics industries, to our ability to successfully integrate any
acquisitions we may make, or to national or international economic conditions. In particular, economic
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