ELECTRONIC ARTS E3 INVESTOR BREAKFAST Westin Bonaventure Hotel Los Angeles, CA June 12, 2013
Safe Harbor Statement Please review our risk factors on Form 10-K filed with the SEC. Some statements set forth in this document, including the estimates relating to EA s fiscal year 2014 guidance information and fiscal year 2014 title slate contain forward-looking statements that are subject to change. Statements including words such as "anticipate", "believe", estimate or "expect" and statements in the future tense are forward-looking statements. These forwardlooking statements are preliminary estimates and expectations based on current information and are subject to business and economic risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Some of the factors which could cause the Company s results to differ materially from its expectations include the following: sales of the Company s titles; the Company s ability to manage expenses; the competition in the interactive entertainment industry; the effectiveness of the Company s sales and marketing programs; timely development and release of Electronic Arts products; the Company s ability to realize the anticipated benefits of acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company s ability to predict consumer preferences among competing platforms; the Company s ability to service and support digital product offerings, including managing online security; general economic conditions; and other factors described in the Company s Annual Report on Form 10-K for the fiscal year ended March 31, 2013. These forward-looking statements are valid as of June 12, 2013 only. Electronic Arts assumes no obligation and does not intend to update these forward-looking statements
Blake Jorgensen CFO
Outline Market Trends in Interactive Entertainment EA Product Strategy Expanding Operating Margins in FY14 1 On a non-gaap basis.
Interactive Entertainment STEADY OVERALL INDUSTRY GROWTH ~$60B 70% digital Global Games Software $ s BN s ~$25B 20% digital 05 06 07 08 09 10 11 12 13 Source: NPD, Gfk, Famitsu AppAnnie & EA Estimates
Digital Mix DIGITAL SEGMENTS DRIVE GROWTH Growth Drivers 14 12-2 ~ $60B More & better hardware Increasing total number of gamers ~$25B 4 6 Richer & better content More accessible gaming Business model innovation 2005 Console Digital Western PC Digital RoW PC Digital Mobile Packaged Goods 2013 Source: NPD, Gfk, Famitsu, AppAnnie & EA Estimates
Transition Phase NEW CONSOLES DRIVE GROWTH Growth Drivers Global Console Games Software $ s BN s <1% digital ~10% digital ~ $20B 6 8 times more powerful New entertainment functionality New digital services 0% digital More core gamers than ever Average age / income higher 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Trend for faster tech adoption Source: NPD, Gfk, Famitsu AppAnnie & EA Estimates
Frank Gibeau PRESIDENT, EA LABELS
Four Strategies for Making Games 1. Connected, Multi-Platform Development Model 2. Portfolio of Proven Brands and New IP 3. New Engine Technology Drives Quality and Efficiency 4. Extend the Experience with Digital Services
1 CONNECTED, MULTI-PLATFORM DEVELOPMENT MODEL
How Our Consumers Play Lean Back LIVING ROOM CONSOLE Sony & Microsoft Controller + Motion & Voice Extended sessions Big core community Premium + MTX Largely Western Lean Over MOBILE GAMING Android and ios Intuitive Touch Control Quick sessions Mass Market Freemium Global market Lean In PC GAMING Windows and Mac Keyboard + Mouse Quick and Extended Sessions Big core community Premium & Freemium Global with Asia leading
The EA Development Model 300 Million EA registered users 2.5B+ game sessions per month 2B+ online enabled game installations Smart Phone HD Console EA Brand Universe Single User ID PC 5 game-enabled devices per consumer Tablet
Battlefield 4: A Day in the Life Check stats and news on Battlelog Play a quick match on PC Follow news and forums Lead attacks via Commander Mode Schedule a match on smart phone Extended console game session
2 PORTFOLIO OF PROVEN BRANDS AND NEW IP
Fewer Bigger Better TITLE COUNT: HD Mobile FY12 22 24 FY13 13 18 FY14 E 11 14 15
New & Reimagined Existing Portfolio Strategy Going Forward Wholly Owned Licensed Battlefield Need for Speed Mass Effect Dragon Age The Sims SimsCity Plants v. Zombies Bejeweled RealRacing Mirror s Edge Ultima Command & Conquer FIFA Madden NHL Hockey NCAA Football NBA Live The Simpsons Tetris Monopoly Star Wars Battlefront UFC Titanfall and more to come
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3 NEW ENGINE TECHNOLOGY DRIVES QUALITY AND EFFICIENCY
Building on Best in Class Technology F Y 0 9 & P R I O R VISCERAL I ECLIPSE UNREAL 2 VISCERAL II RENDERWARE HERO UNREAL 3 CRYTEK NHL TIGER RNA SAGE NBA PANDEMIC GAME CHANGER BLACKBOX FIFA and more F Y 1 4 O N WA R D
4 EXTEND THE EXPERIENCE WITH DIGITAL SERVICES
Millions Live Service Drives Engagement FIFA Players Stay Strongly Engaged Months after Launch DAILY ACTIVE USER (DAU) COUNT 3.5 FIFA 13 Non-Live Service 3.0 2.5 2.0 1.5 1.0 DAU peaked 6 months after launch 0.5 0.0 Months since launch 10
Blake Jorgensen CFO
EA Reaching $4B in Revenue CONTINUED GROWTH DESPITE A CONSOLE TRANSITION 6% Year-Over-Year Revenue growth $3,793M $4,000M $1,663M $1,700M Digital Revenue Packaged Goods $2,130M $2,300M On non-gaap basis. On non-gaap basis. FY13 FY14E
FY14 Digital Revenue Mobile/Handhelds Extra Content Subs, Ads, Other Full Game Downloads CAGR = 31% $1,663M $1,700M $1,227M $833M $570M FY10 FY11 FY12 FY13 FY14E On non-gaap basis.
EA Financials CONTINUED MARGIN IMPROVEMENT 70% 60% 63% 66% 66% 61% 55% 56% 50% 53% 54% 51% 40% 30% 20% 10% $397 $367 $313 $196 8% 10% 10% 5% 53% $504 13% ($ in M) $800 $700 $600 $500 $400 $300 $200 $100 0% FY10 FY 11 FY 12 FY 13 FY 14E $0 On non-gaap basis. Gross Margin Operating Expense (% of Revenue) Operating Profit Operating Margin
Summary Well Positioned for Next Gen Driving Leadership in Digital Continued Improved Margins Growing Free Cash Flow 1 On On non-gaap a non-gaap basis. basis.
Thank You Q & A
Frank Gibeau, President of Labels Blake Jorgensen, CFO Larry Probst, Executive Chairman Peter Moore, COO Rajat Taneja, CTO