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Electronic Arts Inc   (EA)
Other Ticker:  
 
    Sector  Technology    Industry Software & Programming
   Industry Software & Programming
   Sector  Technology
 



 

What are Electronic Arts Inc's Business Segments?



Our product development methods and organization are modeled on those used in other sectors of the entertainment industry. Employees whom we call “producers” are responsible for overseeing the development of one or more products. The interactive software games that we develop and publish are broken down into three major categories: (1) EA studio products, (2) co-publishing products, and (3) distribution products.

EA Studio Products

We develop games internally and also engage third-parties to develop games on our behalf at our development and production studios located near San Francisco, Los Angeles, Orlando (Florida), Chicago, Vancouver, Montreal, London and Tokyo. We publish our EA Studio products under three major brands:

EA SPORTSTM — examples of some of our recent products published under the EA  SPORTS brand are Madden NFL 2004 (professional football), NCAA® Football 2004 (collegiate football), FIFA Soccer 2004 (professional soccer), NBA Live 2004 (professional basketball), NHL® 2004 (professional hockey), MVP Baseball TM 2004 (professional baseball) and NASCAR ThunderTM 2004 (stock car racing),

EA GAMESTM — examples of some of our recent products published under the EA  GAMES brand are The Lord of the RingsTM; The Return of the KingTM, James Bond 007 TM: Everything or NothingTM, The SimsTM Bustin’ Out, Need for SpeedTM Underground and Medal of HonorTM Rising Sun, and

EA SPORTS BIGTM — examples of some of our recent products published under the EA SPORTS BIG brand are NFL STREET (football), SSX 3 (snowboarding), Def Jam VENDETTA (wrestling) and NBA STREET Vol. 2 (basketball).

Co-publishing Products

Mainly through our EA Partners global business unit, we team with other game developers who develop their own interactive software games with our assistance, which we then publish, market and distribute. An example of a recent co-publishing product is Battlefield VietnamTM, which was developed by Digital Illusions, C.E. (“DICE”).

Distribution Products

We distribute interactive software games that are developed by other companies. An example of a recent distribution product is Final Fantasy X-2, which was produced by Square Co. Ltd.

Another strength of our business is that we have developed many of our products to become franchise titles that can be regularly iterated. For example, every year we release new versions of most of our EA SPORTS titles. Likewise, several of the EA GAMES and EA SPORTS BIG products listed above are part of new or continuing product franchises. We also release products called “expansion packs” for PC titles that provide additional content (characters, storylines, settings, missions) for games that we have previously published. For example, we have published expansion packs for Battlefield 1942, including Battlefield 1942: The Road to Rome and Battlefield 1942: Secret Weapons of WWII, each of which expands the characters, settings and gameplay of the original Battlefield 1942 game. We consider titles that iterate, sequel or spawn expansion packs to be franchise titles.

Method of Delivery

The console, PC and hand-held games that we publish are made available to consumers on a disk (usually CD or DVD format) or a cartridge that is packaged and typically sold in retail stores and through our own online store. We refer to these as packaged goods products. In North America and Europe, our largest markets, these packaged goods products are sold primarily to retailers that may be mass market retailers (such as Wal-Mart), electronics specialty stores (such as Best Buy) or game software specialty stores (such as Electronics Boutique). We also maintain a smaller business where we license to manufacturers of products in related industries (for example, makers of personal computers or computer accessories) rights to include certain of our products with the manufacturer’s product or offer our products to consumers who have purchased the manufacturer’s product. We call these combined products “OEM bundles”.

There are three ways in which we publish games that are playable online by consumers. First, we include online capability features in certain of our PC and PlayStation 2 products and soon Xbox, which enable consumers to play against one another via the Internet. We also publish games that are playable only online. One type of these online-only games is called “persistent state worlds” or massively multiplayer online games and is server based. Consumers experience these games as interactive virtual worlds where thousands of other consumers can interact with one another. Examples of our persistent state world products are Ultima OnlineTM and The Sims Online. These persistent state world games are often sold to consumers in the form of a CD or DVD that contains much of the software necessary to play the game online. Other types of online-only games that we publish are available on the World Wide Web and include card games, puzzle games and word games (marketed under the “Pogo” brand), all of which are made available to consumers on our website, www.pogo.com, and on certain online services provided by America Online, Inc.

Market

Historically, there have been multiple consoles available in our business segment and vigorous competition between console manufacturers. While Sony has for the past several years been the clear leader (with its PlayStation and PlayStation  2 consoles), Microsoft and Nintendo are large and viable competitors, and PCs continue to be a strong interactive game platform. We develop and publish products for multiple platforms, and this diversification continues to be a cornerstone of our strategy.

The following table details select information on a sample of the console platforms for which we have published titles:

We currently develop or publish products for ten different hardware platforms. In fiscal 2004, our product releases were for PlayStation 2, Xbox, Nintendo GameCube, PlayStation, PC, Game Boy Advance, Nokia N-Gage and online Internet play. Our planned product introductions for fiscal 2005 are for the PlayStation  2, Xbox, Nintendo GameCube, PlayStation, PC, Game Boy Advance, Nokia N-Gage, Sony PSP, Nintendo Dual Screen and online Internet play.

PlayStation 2. Sony released the PlayStation 2 console in Japan in March 2000, in North America in October 2000, and in Europe in November 2000. The PlayStation  2 console is a 128-bit, DVD-based system that, with a network adaptor, is Internet ready, as well as backward compatible with games published for its predecessor, the PlayStation. We have published and are currently developing numerous products for the Sony PlayStation 2.

Nintendo GameCube. Nintendo launched the Nintendo GameCube console in Japan in September 2001, North America in November 2001 and in Europe in May 2002. The Nintendo GameCube plays games that are manufactured on a proprietary optical disk. We have published and are currently developing numerous products for the Nintendo GameCube.

Xbox. Microsoft launched the Xbox console in North America in November 2001, in Japan in February 2002 and in Europe in March 2002. The Microsoft Xbox is a 128-bit, DVD-based system that is Internet ready. We have published and are currently developing numerous products for the Microsoft Xbox.

Our early investment in products designed for play on 32-bit PCs and consoles (such as the PlayStation), has been strategically important in positioning us for the current generation of 128-bit machines. We believe that such investment continues to be important. DVD-based game consoles and related software. The transition to the current generation systems was initiated by the launch of Sony’s PlayStation 2 in fiscal 2001, and continued with the launches of the Nintendo GameCube and Microsoft’s Xbox in fiscal 2002.

Online Games. The online gaming component of our business is still in its early stages. To date, we have had limited success in finding ways of generating revenue and profits from online games, including subscription fees, “pay-to-play” fees and advertising. In addition, we have had limited experience with developing optimal pricing strategies or predicting usage patterns for our online games. In our history, we have launched five persistent state world products with mixed results. While we have achieved success with Ultima Online, our other persistent state world products, most notably The Sims Online and Earth & Beyond TM, have not met our expectations. Since the beginning of fiscal 2003, we have launched our free EA SPORTS and EA GAMES NATION online offerings, which can be accessed through certain of our PC and PlayStation 2 titles. The continued growth of the online sector of our industry will depend on the following key factors:

Growing interest in multiplayer games,

Willingness by consumers to pay for online game content,

Rapid innovation of new online entertainment experiences,

Mass market adoption of broadband technologies,

Convergence of online capabilities in next-generation consoles, and

Ability to create on-line products that appeal to consumers in diverse global markets.


   

Electronic Arts Inc Tax Rate Companies within the Software & Programming Industry


Electronic Arts Inc Segments

 
PlayStation
   27.4 % of total Revenue
PC
   18.15 % of total Revenue
Xbox
   27.66 % of total Revenue
Total Console
   55.06 % of total Revenue
Mobile Platforms
   9.86 % of total Revenue
Advertising
   7.24 % of total Revenue
License OEM & Other
   2.44 % of total Revenue
Publishing & Other
   58.12 % of total Revenue
Total Digital
   41.88 % of total Revenue
Full game downloads
   7.77 % of total Revenue
Extra content
   17.02 % of total Revenue
 

Business Segments (Sep. 30, 2015)
Revenues
(in millions $)
II. Quarter
%
(of total Revenues)
(Sep. 30, 2015)
Income
(in millions $)
II. Quarter
%
(Profit Margin)
PlayStation
314.00 27.4 % 0.00 -
PC
208.00 18.15 % 0.00 -
Xbox
317.00 27.66 % 0.00 -
Total Console
631.00 55.06 % 0.00 -
Mobile Platforms
113.00 9.86 % 0.00 -
Advertising
83.00 7.24 % 0.00 -
License OEM & Other
28.00 2.44 % 0.00 -
Publishing & Other
666.00 58.12 % 0.00 -
Total Digital
480.00 41.88 % 0.00 -
Full game downloads
89.00 7.77 % 0.00 -
Extra content
195.00 17.02 % 0.00 -
Total
1,146.00 100 % 0.00 -

• Electronic Arts Inc Income Statement • Electronic Arts Inc supply chain • Revenue growth ranking by company and industry

Growth rates by Segment (Sep. 30, 2015)
Y/Y Revenue
%
II. Quarter
Q/Q Revenue
%
(Sep. 30, 2015)
Y/Y Income
%
II. Quarter
Q/Q Income
%
PlayStation
0 % 6.44 % - -
PC
0 % -17.79 % - -
Xbox
0 % -34.91 % - -
Total Console
0 % -19.31 % - -
Mobile Platforms
-8.13 % -22.07 % - -
Advertising
-8.79 % - - -
License OEM & Other
0 % 21.74 % - -
Publishing & Other
38.17 % 14.83 % - -
Total Digital
-5.51 % -22.95 % - -
Full game downloads
7.23 % - - -
Extra content
-8.02 % - - -
Total
15.76 % -4.74 % - -

• Electronic Arts Inc Growth Comparisons Electronic Arts Inc Profile • Electronic Arts Inc Market Share

To get more information on Electronic Arts Inc's PlayStation, PC, Xbox, Total Console, Mobile Platforms, Advertising, License OEM & Other, Publishing & Other, Total Digital, Full game downloads, Extra content, Total segment. Select each division with the arrow.


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