John Riccitiello Chief Executive Officer

Transcription

1 John Riccitiello Chief Executive Officer 1

2 Safe Harbor Statement During the course of this meeting EA may make forward-looking statements regarding future events and the future financial performance of the company. We caution you that actual events and results may differ materially. We refer you to EA s most recent Forms 10-K for a discussion of risk factors that could cause actual results to differ materially from those discussed today. EA makes these statements as of July 31, 2008 and disclaims any duty to update them. 2

3 Electronic Arts The Interactive Entertainment Industry is Changing & Growing Rapidly No One has EA s Underlying Strengths We Have a Plan to Drive Revenue and Profitability Fiscal 2011 Goal: > $6 Billion in Revenue; > $1.5 Billion in Operating Income 3

4 The Industry 4

5 Transforming Industry Current Cycle by Segment Global Retail Software Sales (USD in Billions) $50 16% CAGR $48 Mobile $40 Online $30 $20 $23 Packaged Goods $10 $0 CY05 CY06 CY07 CY08 CY09 CY10 CY05 CY10 PG $17.9 $28.7 Online $3.4 $10.9 Mobile $1.8 $8.4 Total $23.1 $48.0 Industry Doubles Becomes Less Cyclical Source: EA estimates for packaged goods; DFC for online; Informa, Jupiter, Gartner for mobile. 5

6 Transforming Industry Current Cycle by Region Global Retail Software Sales CY 2010 (USD in Billions) $30 $25 $20 $29 Asia Europe $15 $10 $5 North America $11 $8 Rest of World $0 Packaged Goods Online Mobile NA $11.6 NA $3.8 NA $1.7 EUR $12.6 EUR $2.3 EUR $1.9 Asia $4.5 Asia $3.6 Asia $3.8 ROW -- ROW $1.2 ROW $1.0 Total $28.7 Total $10.9 Total $8.4 Packaged Goods Still Significant - Digital Growth High Source: EA estimates for packaged goods; DFC for online; Informa, Jupiter, Gartner for mobile. 6

7 Console Hardware Current Generation Installed Base North America (in Ms) Europe (in Ms) 12 Wii X Wii PS X PS ` 2 ` - CY05 CY06 CY07 CY08 YTD - CY05 CY06 CY07 CY08 YTD Three Horse Console Race Source: NPD (Life to Date thru June 08) for NA, UK Chart-Track, France Gfk, Germany MCC & EA estimates for EU (Life to Date thru June 08) 7

8 Electronic Arts 8

9 Assessment Strengths / Opportunities Strengths IP Portfolio Creative Talent Direct Publishing Pogo Opportunities Segment Shares Especially Nintendo Costs / Productivity Expand Digital / Direct to Consumer Smart M&A Mobile 9

10 Intellectual Property Top Selling Franchises North America & Europe 2005 to 2007 Top Selling Franchises - Calendar 2005 to 2007 Top Total Strongest Portfolio Sources: North America - NPD Trst; Europe - UK Chart-track, France Gfk, Germany MCC & EA estimates. 10

11 Intellectual Property EA Top Franchises 2005 to of Top 50 Franchises Over Last Three Years Sources: North America - NPD Trst; Europe - UK Chart-track, France Gfk, Germany MCC & EA estimates. 11

12 Best Creative Talent Worldwide Studios Studio EAC (Canada) Tiburon Black Box EA Redwood Shores Maxis EA Montreal EALA (Los Angeles) Bright Light Criterion The Sims BioWare Pandemic Mythic Digital Illusions EA Salt Lake Phenomic Titles FIFA, NBA Live, NHL, March Madness, Fight Night, Playground Madden, NCAA Football, Tiger Woods, NASCAR Need for Speed, SKATE Godfather, Simpsons, Dead Space SPORE Army of 2, Boogie Tiberium, Command & Conquer, Medal of Honor, Boom Blox Harry Potter Burnout, Black The Sims, MySims Mass Effect, Dragon Age, New MMO Mercenaries 2, Saboteur, Lord of the Rings Warhammer Battlefield, Mirror s Edge Hasbro Games BattleForge Best Creative 12

13 Global Publishing Organization Worldwide Publishing Offices Locations Australia Korea Austria Mexico Belgium Netherlands Brazil New Zealand China North America Czech Republic Norway Denmark Poland Finland Portugal France Russia Germany Singapore Greece South Africa Hong Kong Spain Hungary Sweden India Switzerland Italy Taiwan Ireland Thailand Japan United Kingdom Most Direct Sales Organization of any Third Party Sell More Units Global Launches 17 Languages on Hits / Day & Date Ship Fastest Time-to-Market Aggressive Marketing Retail, Media, Non- Traditional Most Direct Publisher 80%+ of Revenue Direct 13

14 Pogo Time Spent (Monthly Minutes in Billions) 5.7 Engagement (Average Minutes Spent per Day) Pogo Yahoo! AOL MSN Addicting Games Pogo #1 US Gaming Site in Time Spent Average Minutes of Usage Per Day #2 in Unique Visitors Million Monthly Club Pogo 1.6 Million Paying Subscribers 75% Female Average 14 hours Per Player Per Week 85% Annual Subscribers $40 of Gems Purchased per Buyer International Live in the UK, Germany & France Pogo AOL Yahoo! MSN Games Addicting Games $100 Million in Revenue in Fiscal 2008 Source: Media Metrix; gaming sites March

15 Mobile North America Share Calendar 2007 Top North America Titles Calendar % 25% 20% 15% 10% 5% 0% 27% 28% ` 12% 11% 11% Gameloft EA Glu Mobile 10% Jan-07 Apr-07 Jun-07 Sep-07 Dec-07 Rank Title Publisher 1 Tetris EA Mobile 2 Bejeweled EA Mobile 3 Ms. PAC-MAN Namco 4 Zuma Glu Mobile 5 PAC-MAN Namco 6 Tetris Mania EA Mobile 7 Monopoly Here & Now Glu Mobile 8 Midnight Pool Gameloft 9 Diner Dash Glu Mobile 10 The Sims 2 EA Mobile Top UK Titles December 2007 Rank Title Publisher 1 Catchphrase Gameloft 2 Tetris EA Mobile 3 Monopoly: Here and Now Glu Mobile 4 Who Wants To Be A Millionaire? Glu Mobile 5 Deal or No Deal Gameloft 6 Pac-Man Namco Mobile 7 Brain Genius Glu Mobile 8 Championship Manager 2008 Eidos Mobile 9 Sonic The Hedgehog: Part One Glu Mobile 10 The Sims 2 EA Mobile Leader - $150 Million in Fiscal 2008 Sources: North America Telephia; UK - ELSPA. 15

16 Three-Year Goals 16

17 Key Metrics Our Focus FY11 Targets Key Metrics Fiscal 2011 Revenue > $6 Billion Operating Income > $1.5 Billion Quality Scores On Core Titles > 80 Digital as % of Total Revenue ~ 15% Clear & Measurable Targets 17

18 Our Priorities FY11 Targets Revenue* (in $Bs) Operating Income* (in $Ms) $7,000 2x $1,600 > $1.5B $6,000 $5,000 > $6.0B $1,200 6x $4,000 $3,000 $800 $2,000 $400 $1,000 $- FY05 FY06 FY07 FY08 FY09E FY10E FY11E $- FY05 FY06 FY07 FY08 FY09E FY10E FY11E FY11 2x Revenue / 6x Operating Income Growth in 4 Years *Note: All Non-GAAP Metrics 18

19 Our Priorities FY08 Results Revenue* (in $Bs) $7,000 Operating Income* (in $Ms) $1,600 $6,000 $5, % $1,200 $4,000 $3,000 $2,000 $800 $ % $1,000 $- FY05 FY06 FY07 FY08 FY09E FY10E FY11E $- FY05 FY06 FY07 FY08 FY09E FY10E FY11E FY08 Revenue and Operating Income Up ~ 30% *Note: All Non-GAAP Metrics 19

20 Our Priorities FY09 Targets Revenue* (in $Bs) $7,000 $6,000 $5,000 +$1B Operating Income* (in $Ms) $1,600 $1,200 $4,000 $3,000 $800 ~100% $2,000 $400 $1,000 $- FY05 FY06 FY07 FY08 FY09E FY10E FY11E $- FY05 FY06 FY07 FY08 FY09E FY10E FY11E FY09 $1 Billion + in Revenue / Doubling Operating Income *Note: All Non-GAAP Metrics 20

21 Our Priorities In Summary Revenue* (in $Bs) Operating Income* (in $Ms) $7,000 2x $1,600 > $1.5B $6,000 $5,000 $ B > $6.0B $1,200 6x $4,000 $3,000 $800 2x $2,000 $400 $1,000 $- FY05 FY06 FY07 FY08 FY09E FY10E FY11E $- FY05 FY06 FY07 FY08 FY09E FY10E FY11E Driving Profitable Growth On Track *Note: All Non-GAAP Metrics 21

22 Assessment Strengths / Opportunities Strengths IP Portfolio Creative Talent Direct Publishing Pogo Opportunities Segment Shares Especially Nintendo Costs / Productivity Expand Digital / Direct to Consumer Smart M&A Mobile 22

23 How Do We Get There? Question # 1: How Do We Increase Segment Shares & Achieve Target of $6 Billion + in Revenue? 1) Product & Marketing Innovation: Drive Major IP Into Top 20 Chart Positions Madden Burnout Battlefield Mirror s Edge SPORE Need for Speed FIFA Rock Band Saboteur GodFather 2 The Sims NCAA Dead Space Mercenaries 2 2) Platform Focus: Increase Nintendo Shares by 5+ Share Points MySims SPORE Harry Potter Skate It. The Sims Hasbro Boom Blox EA SPORTS New IP 3) Increase Segment Shares in Three Under-Represented Categories Action / Adventure - Pandemic Family Hasbro / MySims RPG BioWare 4) Continue To Drive EA Partners MTV / Harmonix Valve id Software It s the Products 23

24 Fiscal 2009 Slate New IP Hasbro Family Game Night BOOM BLOX LITTLEST PET SHOP FACE BREAKER NERF SimAnimals 15 New Titles 24

25 Nintendo Segment Share North America and Europe Segment Share 20% Wii More Nintendo Games 15% 11% 13% New Exclusive Titles Boom Blox, SimAnimals, Skate it. 10% 5% 7% 7% 8% NDS Franchise Extensions All Play on the Wii 0% CY05 CY06 CY07 CY08E 40 Nintendo SKUs in FY09 vs. 26 Last Year 25

26 Nintendo Games Announced FY09 Slate EA Casual The Sims EA SPORTS EA Games Boom Blox Wii MySims Kingdom Wii, NDS Madden NFL 09 Wii, NDS Rock Band Wii MONOPOLY Wii MySims Party Wii, NDS NCAA Football 09 Wii Need for Speed Wii, NDS TRIVIAL PURSUIT Wii Sim City Creator Wii, NDS Tiger PGA 09 Wii Skate It. Wii, NDS Hasbro Digital Playroom Wii, NDS SimAnimals Wii, NDS FaceBreaker Wii Lord of the Rings NDS Harry Potter Half Blood Prince Wii, NDS Sim 2 Apartment Pets NDS FIFA 09 Wii, NDS Sonic RPG NDS LITTLEST PET SHOP Wii, NDS NBA Live 09 Wii SPORE Creatures NDS NERF N-STRIKE Wii ZUBO NDS Boogie Superstar Wii Brain Quest NDS 26

27 How Do We Get There? Question # 2: How Do We Drive Costs to Improve Margins? 1) Label Structure Studio Cost Centers Four Label Profit Centers Innovative Games Drive Hits R&D leverage Cost Orientation Strong Marketing 2) Drive Outsourcing & Offshoring Example: Offshoring R&D Headcount 12% in FY07 16% in FY08 20%+ in FY11 3) Scale Infrastructure IT CDS / QA Corporate Publishing Overhead Basis Points 4) New Label Incentive Plan Effective April 1, 2008 Franchise Level Effective April 2009 Profit Focus = P&L Leverage 27

28 R&D Costs R&D Headcount Low Cost Locations * High Cost Locations 1, % 1,090 6,000 4,000 5,240 11% 5,840 Ex-VGH 5,065-3% Y/Y ,000 0 FY07 FY08 0 FY07 FY08 Making Progress * Low-cost locations include Shanghai, India, Romania, Montreal and Spain. 28

29 How Do We Get There? Question # 3: How Do We Expand Digital Revenues? 1) Online: Direct-to-Consumer Pogo Expansion Warhammer / Austin MMO Mid-Session Games East & West Packaged Goods Digital Content Package Goods Subscription Asia Advertising Social Networking 2) Mobile International Expansion The Right Games / Platforms Direct-to-Consumer High Margin & Less Cyclical 29

30 How Do We Get There? Question # 4: What Are Our M&A Priorities? IP & Studio Talent : Strategic & Accretive Publishers, Developers Revenue & Cost Synergies Push IP More Global / Cross-Platform Asia, Digital, IP: Strategic Margin Expansion / New Business Models Leverage EA s IP A Part of Our Growth Strategy 30

31 Electronic Arts The Interactive Entertainment Industry is Changing & Growing Rapidly No One has EA s Underlying Strengths We Have a Plan to Drive Revenue and Profitability Fiscal 2011 Goal: > $6 Billion in Revenue; > $1.5 Billion in Operating Income 31

32 John Riccitiello Chief Executive Officer 32