Electronic Arts 2012 Annual Report Download - page 92

MMO game business, our primary competitor is Activision Blizzard. Competing providers of other kinds of
online games include Big Fish, Nexon, Tencent and Zynga and other providers of games on social networking
platforms such as Facebook.
Intellectual Property
Like other entertainment companies, our business is based on the creation, acquisition, exploitation and
protection of intellectual property. Some of this intellectual property is in the form of software code, patented
technology, and other technology and trade secrets that we use to develop our games and to make them run
properly. Other intellectual property is in the form of audio-visual elements that consumers can see, hear and
interact with when they are playing our games – we call this form of intellectual property “content.”
We develop products and services from wholly-owned intellectual properties we create within our own studios
and obtain through acquisitions. In addition, we obtain content and intellectual property through licenses and
service agreements such as those with sports leagues and players’ associations, movie studios and performing
talent, authors and literary publishers, music labels, music publishers and musicians. These agreements typically
limit our use of the licensed rights in products for specific time periods. In addition, our products that play on
game consoles and mobile devices, or other proprietary platforms may include technology that is owned by the
device manufacturer or platform operator and licensed non-exclusively to us for use. We also license technology
from other providers. While we may have renewal rights for some licenses, our business and the justification for
the development of many of our products is dependent on our ability to continue to obtain the intellectual
property rights from the owners of these rights on reasonable terms.
We actively engage in enforcement and other activities to protect our intellectual property. We typically own the
copyright to our software code and content, as well as the brand or title name trademark under which our
products are marketed. We register copyrights and trademarks in the United States and other countries as
appropriate.
As with other forms of entertainment, our products are susceptible to unauthorized copying and piracy. We
typically distribute our PC products using copy protection technology, digital rights management technology or
other technological protection measures to prevent piracy and the use of unauthorized copies of our products. In
addition, console manufacturers typically incorporate technological protections and other security measures in
their consoles in an effort to prevent the use of unlicensed product. We are actively engaged in enforcement and
other activities to protect against unauthorized copying and piracy, including monitoring online channels for
distribution of pirated copies, and participating in various industry-wide enforcement initiatives, education
programs and legislative activity around the world.
Significant Relationships
Channel Partners
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 3. Pursuant to these agreements, we engage Sony to supply 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 online content compatible with
the Wii. Pursuant to these agreements, we engage Nintendo to supply Wii proprietary optical format disk
products for our products.
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