Electronic Arts 2012 Annual Report Download - page 87

Annual Report
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Report contains forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements, other than statements of historical fact, made in this Report are
forward looking. Examples of forward-looking statements include statements related to industry
prospects, our future economic performance including anticipated revenues and expenditures, results of
operations or financial position, and other financial items, our business plans and objectives, including our
intended product releases, and may include certain assumptions that underlie the forward-looking
statements. We use words such as “anticipate,” “believe,” “expect,” “intend,” “estimate” (and the negative
of any of these terms), “future” and similar expressions to help identify forward-looking statements. These
forward-looking statements are subject to business and economic risk and reflect management’s current
expectations, and involve subjects that are inherently uncertain and difficult to predict. Our actual results
could differ materially from those in the forward-looking statements. We will not necessarily update
information if any forward-looking statement later turns out to be inaccurate. Risks and uncertainties that
may affect our future results include, but are not limited to, those discussed under the heading “Risk
Factors,” beginning on page 13.
PART I
Item 1: Business
We develop, market, publish and distribute game software content and services that can be played by consumers
on a variety of video game machines and electronic devices (which we call “platforms”), including:
• Video game consoles, such as the Sony PLAYSTATION 3, Microsoft Xbox 360 and Nintendo Wii,
• Personal computers, including the Apple Macintosh (we refer to personal computers and the Macintosh
together as “PCs”),
• Mobile devices, such as the Apple iPhone and Google Android compatible phones,
• Tablets and electronic readers, such as the Apple iPad and the Amazon Kindle, and
• The Internet, including social networking sites such as Facebook.
Our Strategy
Our business is rapidly transforming. Historically, we have derived most of our sales from disk-based videogame
products that are sold through retailers (we call these “packaged goods” products). Now, however, the fastest
growing part of our business is delivering games directly to consumers through online and wireless networks. For
example:
• Players can access online-delivered content and services as add-ons to our console and PC games;
• Consumers can download our PC games (and those of other publishers) directly through our Origin
online platform, as well as through third party online download stores and services, including through
Sony’s PlayStation Network and Microsoft’s Xbox LIVE Marketplace;
• We provide games for mobile devices and Internet-only games such as our social and Play4Free
offerings that are available only through online and wireless delivery; and
• We offer large-scale, massively multi-player online games and game services on a subscription basis.
At the same time, we have aggressively reduced the number of significant titles releases that we launch each year.
In fiscal year 2009, we published over 60 packaged goods products, each of which was primarily a stand-alone
game with few or no online features, and in each fiscal year since, we have launched fewer titles on consoles,
while building additional online features, content and services around each one of our titles. This strategy has
resulted in an increase in revenue per title and in our overall revenue, year-over-year on a non-GAAP basis. In
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