Electronic Arts 2015 Annual Report Download - page 77

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Annual Report
Competition in PC Free-to-Download Online Gaming Services
The PC free-to-download games market is characterized by frequent product introductions. We expect new
competitors to enter the market and existing competitors to allocate more resources toward developing PC free-
to-download online game services. As a result, we expect competition in this market to intensify. Our
competitors in this market include major media companies, traditional video game publishing companies, and
companies that specialize in online games, such as Riot, and companies that produce online games, in addition to
operating online gaming platforms, such as Tencent, Nexon, Valve and Activision Blizzard.
Intellectual Property
Like other entertainment companies, our business is significantly based on the creation, acquisition, exploitation
and protection of intellectual property. This intellectual property includes audiovisual and other content, software
code, patented technology, and other technology and trade secrets.
We develop some of our products and services from wholly-owned intellectual properties that are created in our
studios or obtained through acquisition. We also utilize intellectual property obtained through licenses from
third-party rights owners, such as sports leagues and players’ associations, film and music companies,
performing talent, and other content and technology companies. 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, mobile
devices, or other proprietary platforms may include technology that is owned by the device manufacturer or
platform operator and is licensed non-exclusively to us for use. While we may have renewal rights for some
licenses, 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.
We typically distribute our products using copy protection technology or other technological protection measures
to prevent unauthorized copying, access and exploitation of our products and services. In addition, console
manufacturers typically incorporate technological protections and other security measures in their consoles in an
effort to prevent the use of unlicensed products and other exploitation. We actively engage 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. In addition, we actively engage in activities designed to limit
the impact of abuse of our digital products and services, including monitoring our games for evidence of
exploitation and re-balancing our game environments in the event that such abuse is discovered.
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 disc-based and digitally-delivered software products and
services compatible with PlayStation 3 and 4. As of the date of this filing, we have not entered into a licensed
publisher agreement with Sony for PlayStation 4, and the parties currently operate under the terms of existing
agreements subject to a new pricing structure with respect to PlayStation 4.
Microsoft. Under the terms of agreements we have entered into with Microsoft Corporation and its affiliates,
we are authorized to develop and distribute disc-based and digitally-delivered software products and services
compatible with Xbox 360 and Xbox One.
Under the agreements with Sony and Microsoft, we are provided with the non-exclusive right to use, for a fixed
term and in a designated territory, technology that is owned or licensed by the console manufacturer in order to
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