Electronic Arts 2016 Annual Report Download - page 97

Annual Report
cancellations, or delayed introduction of a new platform for which we have developed products, our sales are
likely to suffer significantly. Additionally, macroeconomic conditions or the occurrence of unforeseen events that
negatively impact retailer or consumer buying patterns during the quarter ending in December are likely to harm
our financial performance disproportionately.
Our business is dependent on the success and availability of platforms developed by third parties, as well
as our ability to develop commercially successful products and services for these platforms.
The success of our business is driven in part by the commercial success and adequate supply of platforms
developed by third parties. Our success also depends on our ability to accurately predict which platforms will be
successful in the marketplace, our ability to develop commercially successful products and services for these
platforms and our ability to effectively manage the transition from current generation platforms to next
generation platforms. We must make product development decisions and commit significant resources well in
advance of anticipated platform release dates and may incur significant expense to adjust our product portfolio
and development efforts in response to changing consumer platform preferences. Additionally, we may enter into
certain exclusive licensing arrangements that affect our ability to deliver or market products or services on
certain platforms. A platform for which we are developing products and services may not succeed as expected or
new platforms may take market share and game software consumers away from platforms for which we have
devoted significant resources. If consumer demand for the platforms for which we are developing products and
services is lower than our expectations, we may be unable to fully recover the investments we have made in
developing our products and services, and our financial performance will be harmed. Alternatively, a platform
for which we have not devoted significant resources could be more successful than we had initially anticipated,
causing us to not be able to take advantage of meaningful revenue opportunities.
Technology changes rapidly in our business and if we fail to anticipate or successfully implement new
technologies in our games or adopt new business strategies, distribution technologies or methods, the
quality, timeliness and competitiveness of our products and services may suffer.
Rapid technology changes in our industry require us to anticipate, sometimes years in advance, which
technologies we must implement and take advantage of in order to make our products and services competitive in
the market. We have invested, and in the future may invest, in new business strategies, technologies, products,
and services. Such endeavors may involve significant risks and uncertainties, and no assurance can be given that
the technology we choose to adopt and the products and services that we pursue will be successful and will not
materially adversely affect our reputation, financial condition, and operating results. We also may miss
opportunities to adopt technology, or develop products and services that become popular with consumers, which
could adversely affect our revenues. It may take significant time and resources to shift our focus to such
technologies, putting us at a competitive disadvantage.
Our product development usually starts with particular platforms and distribution methods in mind, and a range
of technical development and game feature goals that we hope to be able to achieve. We may not be able to
achieve these goals, or our competition may be able to achieve them more quickly and effectively than we can. In
either case, our products and services may be technologically inferior to our competitors’, less appealing to
consumers, or both. If we cannot achieve our technology goals within the original development schedule for our
products and services, then we may delay their release until these goals can be achieved, which may delay or
reduce revenue and increase our development expenses. Alternatively, we may increase the resources employed
in research and development in an attempt to accelerate our development of new technologies, either to preserve
our product or service launch schedule or to keep up with our competition, which would increase our
development expenses.
Security breaches and cyber threats could harm our reputation and adversely affect our business.
As our digital business grows, we continually face cyber risks and threats that seek to damage, disrupt or gain
access to our networks, our products and services, and supporting infrastructure. Our business partners, including
our channel partners, also are subject to these risks. Such cyber risks and threats may be difficult to detect. Any
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