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About EA Electronic Arts
Electronic Arts, Inc. (EA) is an American developer, marketer, publisher and distributor of video games. Founded and incorporated on May 28, 1982 by Trip Hawkins, the company was a pioneer of the early home computer games industry and was notable for promoting the designers and programmers responsible for its games. Electronic Arts is the world’s third-largest gaming company by revenue after Nintendo and Activision Blizzard.
Originally, EA was a home computing game publisher. In the late 1980s, the company began developing games in-house and supported consoles by the early 1990s. EA later grew via acquisition of several successful developers. By the early 2000s, EA had become one of the world’s largest third-party publishers. On May 4, 2011, EA reported $3.8 billion in revenues for the fiscal year ending March 2011, and on January 13, 2012, EA announced that it had exceeded $1 billion in digital revenue during the previous calendar year. In a note to employees, EA CEO John Riccitiello called this “an incredibly important milestone” for the company. EA began to move toward direct distribution of digital games and services with the acquisition of the popular online gaming site Pogo.com in 2001. In 2009, EA acquired the London-based social gaming startup Playfish, and in June 2011, EA launched Origin, an online service to sell downloadable games directly to consumers. In July 2011, EA announced that it had acquired PopCap Games, the company behind hits such as Plants vs. Zombies and Bejeweled.
EA continued its shift toward digital goods in 2012, folding its mobile-focused EA Interactive (EAi) division “into other organizations throughout the company, specifically those divisions led by EA Labels president Frank Gibeau, COO Peter Moore, and CTO Rajat Taneja, and EVP of digital Kristian Segerstrale.”
On May 4, 2011, EA reported $3.8 billion in revenues for the fiscal year ending March 2011. On July 27, 2011, EA reported fiscal first-quarter profits had more than doubled on brisk sales of “highly-anticipated sports and shooter games”. EA earned $221 million, or 66 cents a share, in the three months that ended June 30. “That’s up from earnings of $96 million, or 29 cents a share, in the same period a year earlier. Revenue rose 23 percent to $999 million from $815 million.”
EA’s earnings are marked by an ongoing difference between non-GAAP and GAAP accounting – which, for example, mandates deferrals of revenue related to services provided for online-enabled packaged goods and digital content. Consequently, EA’s quarterly reports reflect hundreds of millions of dollars which, under GAAP accounting, are deferred for a period of months – then appear in the earnings over multiple quarters subsequent to the original sale. Other companies with significant online revenues face similar issues. This can make it extremely difficult to understand the company’s GAAP profitability.
Currently, EA develops and publishes games under several labels including EA Sports titles, Madden NFL, FIFA Soccer, NHL, NCAA Football, SSX and NBA Jam. Other EA labels produce established franchises such as Battlefield, Need for Speed, The Sims, Medal of Honor, Command & Conquer, as well as newer franchises such as Dead Space, Mass Effect, Dragon Age, Army of Two and Star Wars: Knights of the Old Republic, produced in partnership with LucasArts. EA also owns and operates major gaming studios in Tiburon in Orlando, Burnaby, Vancouver, Montreal and DICE in Sweden.