Electronic Arts 2015 Annual Report Download - page 86

Negative player perceptions about our brands, products, services and/or business practices may damage
our business and the costs incurred in addressing player concerns may increase our operating expenses.
Individual players form our ultimate customer base, and player expectations regarding the quality, performance
and integrity of our products and services are high. Players may be critical of our brands, products, services and/
or business practices for a wide variety of reasons. These negative player reactions may not be foreseeable or
within our control to manage effectively, including perceptions about gameplay fairness, negative player
reactions to game content, components and services, or objections to certain of our business practices. In the past,
we have taken actions, including delaying the release of our games, after taking into consideration, among other
things, feedback from the player community even if those decisions negatively impacted our operating results in
the short term. We expect to continue to take actions to address concerns as appropriate, including actions that
may result in additional expenditures and the loss of revenue. Negative player sentiment about our business
practices also can lead to investigations from regulatory agencies and consumer groups, as well as litigation,
which, regardless of their outcome, may be costly, damaging to our reputation and harm our business.
If we release defective products or services, our operating results could suffer.
Products and services such as ours are extremely complex software programs, and are difficult to develop and
distribute. We have quality controls in place to detect defects in our products and services before they are
released. Nonetheless, these quality controls are subject to human error, overriding, and reasonable resource
constraints. Therefore, these quality controls and preventative measures may not be effective in detecting defects
in our products and services before they have been released into the marketplace. In such an event, we could be
required to or may find it necessary to voluntarily recall a product or suspend the availability of the product or
service, which could significantly harm our business and operating results.
Our business is subject to increasing regulation and the adoption of proposed legislation we oppose could
negatively impact our business.
Legislation is continually being introduced in the United States and other countries to mandate rating
requirements or set other restrictions on the advertisement or distribution of entertainment software based on
content. In the United States, most courts, including the United States Supreme Court, that have ruled on such
legislation have generally ruled in a manner favorable to the interactive entertainment industry. Some foreign
countries have adopted ratings regulations and certain countries allow government censorship of entertainment
software products. Adoption of government ratings system or restrictions on distribution of entertainment
software based on content could harm our business by limiting the products we are able to offer to our customers
and compliance with new and possibly inconsistent regulations for different territories could be costly, delay or
prevent the release of our products in those territories.
As we increase the online delivery of our products and services, we are subject to a number of foreign and
domestic laws and regulations that affect companies conducting business on the Internet. In addition, laws and
regulations relating to user privacy, data collection, retention, electronic commerce, consumer protection,
content, advertising, localization, and information security have been adopted or are being considered for
adoption by many countries throughout the world. The costs of compliance with these laws may increase in the
future as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws or
the application of these laws in an unanticipated manner may harm our business and result in penalties or
significant legal liability.
If we do not continue to attract and retain key personnel, we will be unable to effectively conduct our
business.
The market for technical, creative, marketing and other personnel essential to the development and marketing of
our products and services and management of our businesses is extremely competitive. Our leading position
within the interactive entertainment industry makes us a prime target for recruiting our executives as well as key
creative and technical talent. If we cannot successfully recruit and retain the employees we need, or replace key
employees following their departure, our ability to develop and manage our business will be impaired.
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