Electronic Arts 2016 Annual Report Download - page 92

Publishing Partners in Asia. We have entered into agreements whereby we partner with certain companies,
including Tencent Holdings Limited and Nexon Co., Ltd. or their respective affiliates, pursuant to which these
companies publish our mobile and PC free-to-download games in certain Asian territories, including China and
Korea. Our players download games from the publishers’ platforms, and are charged for additional content
purchased within our game environment. The agreements generally establish the amounts that are retained by the
publishers, and the amounts that are passed through to us.
Competition
The market for interactive entertainment is intensely competitive and changes rapidly as new products and
platforms are introduced. We also face competition for the right to use certain intellectual property included in
our products. We face significant competition, primarily from the following:
• Companies that are focused on developing and publishing games that operate on consoles and on PCs,
such as Activision Blizzard, Take-Two Interactive and Ubisoft, as well as diversified media companies
such as Warner Bros. and Sony and Microsoft, each of which develops and publishes software for its
respective console platform;
• Companies that develop and publish mobile game applications; and
• Companies that develop and publish PC free-to-download online gaming services.
More broadly, we compete against providers of different sources of entertainment, such as motion pictures,
television, social networking, online casual entertainment and music that our players could enjoy in their free
time. Important competitive factors include game quality and ease of use, compatibility of products with certain
platforms, brand recognition, price, marketing, and quality of customer service.
Intellectual Property
To establish and protect our intellectual property, we rely on a combination of copyrights, trademarks, patents,
patent applications, trade secrets, know-how, license agreements, confidentiality provisions and procedures and
other contractual provisions. We actively engage in enforcement and other activities to protect our intellectual
property. In addition, we engage in activities designed to limit the impact of abuse of our digital products and
services, including monitoring our games for evidence of exploitation and re-balancing our game environments
in the event that such abuse is discovered.
Governmental Regulation
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting
business on the Internet. In addition, laws and regulations that may have an impact on our business relating to
user privacy, data collection and retention, content, advertising and information security have been adopted or are
being considered for adoption by many countries throughout the world.
Seasonality
We have historically experienced the highest percentage of our sales in our third fiscal quarter due to seasonal
holiday demand; however, there can be no assurance that this will continue. In addition, we defer the recognition
of a significant amount of net revenue related to our online-enabled games over an extended period of time. As a
result, the quarter in which we generate the highest sales volume may be different from the quarter in which we
recognize the highest amount of net revenue.
Employees
As of March 31, 2016, we had approximately 8,500 regular, full-time employees, over 5,200 of whom were
outside the United States. We believe that our ability to attract and retain qualified employees is a critical factor
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