Financial Astrology of Electronic Arts Inc.

FINANCIAL ASTROLOGY

First Trade Date for Electronic Arts Inc.

Company Name	First Trade Date (yyyy-mm-dd)
Electronic Arts Inc.	1989-09-20

Company Name	Symbol
Electronic Arts Inc.	ERTS
History and Business of Company (this information may include date of incorporation)
Electronic Arts develops, markets, publishes and distributes interactive software games that are playable by consumers on the following platforms: • home videogame machines (such as the PlayStation 2, Microsoft Xbox, Nintendo GameCube and PlayStation consoles), • personal computers, • hand-held game machines (such as the Game Boy Advance) and • online, over the Internet. One of our strengths is our ability to publish interactive software games for multiple platforms, which provides cost efficiencies in developing and marketing our products. Our products designed to play on consoles and handhelds are published under license from the manufacturers of these platforms (for example, Sony for the PlayStation and PlayStation 2, Microsoft for the Xbox and Nintendo for the GameCube and Game Boy Advance) and we pay a fee to these console manufacturers for the right to publish products on their platforms. Since our inception, we have published games for over 42 different platforms. We publish our interactive software games under three major brands: • EA SPORTS - examples of some of our recent products published under the EA SPORTS brand are Madden NFL(tm) 2003 (professional football), NCAA(r) Football 2003, FIFA Soccer 2003, NBA Live 2003 (professional basketball), NHL(r) 2003 (hockey), MVP Baseball(tm) 2003 and NASCAR Thunder(tm) 2003 • EA GAMES - examples of some of our recent products published under the EA GAMES brand are Harry Potter and the Chamber of Secrets(tm), The Lord of the Rings(tm), The Two Towers(tm), James Bond 007(tm): Nightfire(tm), The Sims(tm) Superstar, SimCity(tm) 4, Need for Speed(tm) Hot Pursuit 2 and Command & Conquer(tm) Generals • EA SPORTS BIG - examples of some of our recent products published under the EA SPORTS BIG brand are Def Jam Vendetta (wrestling) and NBA Street Volume 2 (basketball). 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 products listed above are part of new or continuing product franchises. We also release products called "expansion packs" that provide additional content (characters, storylines, settings, missions) for games that we have previously published. For example, we have published several expansion packs for The Sims, including The Sims Unleashed Expansion Pack and The Sims Vacation Expansion Pack, each of which expands the characters, settings and gameplay of the original The Sims game. We consider titles that iterate, sequel or spawn expansion packs to be franchise titles. 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 publish under our brands are developed by: • EA Studios, our own development and production studios located near San Francisco, Los Angeles, Orlando (Florida), Vancouver, London and Tokyo, which develop games internally and also engage third-parties to develop games on our behalf, • other game developers who develop their own interactive software games with our assistance, which products we then publish, market and distribute, referred to as "co-publishing products". An example of a recent co-publishing product is Battlefield 1942(tm), which was developed by Digital Illusions, C.E. We invest in the creation of state-of-the-art software tools that we use in product development. These tools allow for more cost-effective product development and the ability to more efficiently convert products from one platform to another. We have also made investments in facilities and equipment that allow us to create and edit video and audio recordings that are used in our games. We also distribute interactive software games that are published by other companies, which we refer to as "distribution products". An example of a recent distribution product is Kingdom Hearts, which is published by Square Co. Ltd. The console, PC and hand-held games that we publish are made available to consumers on a disk (usually a 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). In Japan, we also sell a significant volume of our products through a distributor, who in turn sells them to retailers. Our products are available in approximately 80,000 retail locations worldwide. We also maintain a smaller business in which 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 features in our PC and PlayStation 2 products, for example by enabling consumers to play against one another over 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 games. 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 Online, Earth & Beyond 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. The other type of online-only games that we publish are electronic card games, puzzle games and word games (marketed under the "Pogo" brand) that we make available to consumers on our website, www.ea.com, and on certain online services provided by America Online, Inc. In fiscal 2003, we operated and reported our business in two business segments: • EA Core business segment: creation, marketing and distribution of interactive entertainment software. • EA.com business segment: creation, marketing and distribution of interactive entertainment software which can be played or sold online, ongoing management of subscriptions of online games and website advertising. As of April 1, 2003, we are no longer managing these segments separately. We consider online functionality to be integral to our existing and future products. During fiscal 2003, our business was comprised of the following: • Publishing approximately 70 titles that we developed and/or published under one of our brands in North America, including older titles marketed as Classics. • Publishing localized versions of our products in the rest of the world. • Distribution of co-publishing and distribution titles. In North America, we distributed approximately 34 co-publishing and distribution titles. Of the titles shipped in fiscal 2003, there were 22 titles that sold over one million units (aggregated across all platforms). In fiscal 2003, approximately 42 percent of our net revenue was generated by international operations, compared to approximately 37 percent in both fiscal 2002 and 2001. We were initially incorporated in California in 1982. In September 1991, we were reincorporated under the laws of Delaware. Our principal executive offices are located at 209 Redwood Shores Parkway, Redwood City, California 94065 and our telephone number is (650) 628-1500. We file various reports with, or furnish them to, the SEC. These reports are available free of charge on our website, www.ea.com, as soon as reasonably practicable after we electronically file the reports with, or furnish them to, the SEC.

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