10-KPeriod: FY2010

ELECTRONIC ARTS INC. Annual Report, Year Ended Mar 31, 2010

Filed May 28, 2010For Securities:EA

Summary

Electronic Arts Inc. (EA) in its fiscal year 2010 10-K filing demonstrates a diverse business focused on developing, marketing, publishing, and distributing video game software across multiple platforms including consoles, PCs, handhelds, and mobile devices. The company leverages a strong portfolio of owned intellectual properties (like Need for Speed, The Sims) and licensed properties (such as Madden NFL Football, FIFA Soccer). A key strategic focus is on creating and releasing iterated product families or "franchises" and expanding its digital content and services offerings. Financially, the fiscal year ended March 31, 2010, saw a decrease in net revenue to $3.65 billion from $4.21 billion in the prior year, accompanied by a net loss of $677 million, an improvement from the $1.09 billion net loss in fiscal year 2009. This improvement was attributed to a significant goodwill impairment charge in the prior year and cost-saving measures, including a workforce reduction of approximately 1,200 employees as part of a restructuring plan. The company also made a strategic acquisition of Playfish Limited, a social games developer, for approximately $308 million.

Financial Statements
Beta
Revenue$3.65B
Cost of Revenue$1.87B
Gross Profit$1.79B
Operating Expenses$2.47B
Operating Income-$686.00M
Interest Expense$2.00M
Net Income-$677.00M
EPS (Basic)$-2.08
EPS (Diluted)$-2.08
Shares Outstanding (Basic)325.00M
Shares Outstanding (Diluted)325.00M

Key Highlights

  • 1Net revenue for fiscal year 2010 was $3.65 billion, a decrease from $4.21 billion in fiscal year 2009.
  • 2The company reported a net loss of $677 million for fiscal year 2010, an improvement from a net loss of $1.09 billion in fiscal year 2009.
  • 3EA acquired Playfish Limited, a developer of free-to-play social games, for approximately $308 million in cash and equity.
  • 4A significant restructuring plan was implemented in fiscal year 2010, involving a workforce reduction of approximately 1,200 employees and consolidation of facilities.
  • 5The company's product portfolio spans multiple platforms, including Xbox 360, PLAYSTATION 3, Wii, PC, and mobile devices, with 48 titles developed for mobile platforms.
  • 6Key franchises include annual sports titles like Madden NFL Football and FIFA Soccer, as well as owned properties such as Need for Speed and The Sims.
  • 7The company is increasingly focusing on digital content distribution and online services as an important part of its business.

Frequently Asked Questions

In fiscal year 2010, Electronic Arts Inc. reported net revenue of $3.65 billion, a decrease from $4.21 billion in fiscal year 2009. The company also improved its net loss to $677 million from $1.09 billion in the previous year, partly due to a significant goodwill impairment charge in fiscal year 2009 and cost-reduction initiatives, including a workforce reduction of approximately 1,200 employees.

Key strategic developments included the acquisition of Playfish Limited for approximately $308 million to enhance its social gaming presence, and the execution of a restructuring plan aimed at focusing on higher-margin titles and consolidating operations. The company also continued to emphasize digital content distribution and online services.

Electronic Arts develops and publishes games across a wide range of platforms. These include major video game consoles like the PLAYSTATION 3, Microsoft Xbox 360, and Nintendo Wii, as well as personal computers (PCs), handheld game players such as the PlayStation Portable (PSP) and Nintendo DS, and mobile devices, including smartphones like the Apple iPhone.

EA's strategy centers on developing and publishing titles based on both wholly-owned intellectual properties (e.g., Need for Speed, The Sims, Battlefield) and licensed intellectual properties (e.g., Madden NFL Football, FIFA Soccer, Harry Potter). A significant focus is placed on creating and releasing iterated product families or 'franchises' that can be updated annually or sequeled over time, alongside efforts to expand its digital content and online services.