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23
Results of Operations
Comparison of Fi scal 2010 to Fiscal 2009
Net Sales
Our net sales are principally derived from sales of interactive software games designed for play on video
game consoles, handheld devices and PCs, including digitally via the Internet.
Fiscal 2010 net sales were primarily driven by sales of our first game based on the UFC franchise,
UFC 2009
Undisputed
, as well as
WWE SmackDown vs. Raw 2010
and catalog titles. Net sales increased by
$69.1 million in fiscal 2010 to $899.1 million, from $830.0 million in fiscal 2009.
Net Sales by New Releases and Catalog Ti tles
The following table details our net sales by new releases (titles initially released in the respective fiscal year)
and catalog titles (titles released in fiscal years previous to the respective fiscal year) for fiscal 2010 and fiscal
2009 (in thousands):
Fiscal Year Ended March 31,
Increase/
2010
2009
(Decrease)
%
Change
New releases ................................
.
$670,306 74.5% $556,384 67.0% $113,922 20.5%
Catalog ..........................................
.
228,831 25.5 273,579 33.0 (44,748) (16.4)%
Consolidated net sales................
.
$899,137 100.0% $829,963 100.0% $69,174 8.3%
Net sales of our new releases increased by $113.9 million in fiscal 2010 as compared to fiscal 2009 primarily
due to sales of
UFC 2009 Undisputed,
which was initially released in the three months ended June 30, 2009
on Xbox 360 and PS3, at a premium price (
e.g.
MSRP of $59.99 in the United States). This title was the
primary driver of our net sales in fiscal 2010 and had a higher average selling price compared to sales of our
titles released in fiscal 2009. The increase in net sales of new releases due to sales of
UFC 2009 Undisputed
was partially offset by i) a decrease in net sales of games based on the WWE brand, which was primarily due
to the release of
WWE Legends of Wrestlemania
in fiscal 2009 with no comparable title in fiscal 2010 and
ii) fewer units shipped of games based on our license with Nickelodeon.
Net sales of our catalog titles decreased by $44.7 million in fiscal 2010 due to fewer units sold as compared
to fiscal 2009. Additionally, with respect to sales of our catalog, we had a decrease in the recognition of
deferred revenue in fiscal 2010 as compared to fiscal 2009.
Net Sales by Territory
The following table details our net sales by territory for fiscal 2010 and fiscal 2009 (in thousands):
Fiscal Year Ended March 31,
Increase/
2010
2009
(Decrease)
%
Change
North America .............................
.
$558,673 62.1% $457,819 55.2% $100,854 22.0%
Europe .........................................
.
277,647 30.9% 314,063 37.8% (36,416) (11.6)%
Asia Pacific..................................
.
62,817 7.0% 58,081 7.0% 4,736 8.2%
International................................
.
340,464 37.9% 372,144 44.8% (31,680) (8.5)%
Consolidated net sales..............
.
$899,137 100.0% $829,963 100.0% $69,174 8.3%
Net sales in North America increased by $100.9 million in fiscal 2010 as compared to fiscal 2009. The
increase was due to an increase in units shipped of our new releases with higher average selling prices,
which was primarily due to sales of
UFC 2009 Undisputed
.
Net sales in Europe decreased by $36.4 million in fiscal 2010 as compared to fiscal 2009. The decrease was
primarily due to a decrease in units shipped. We shipped fewer games from our kids business due primarily to
fewer units sold of
Up
in fiscal 2010 as compared to
Wall-E
in fiscal 2009 and we shipped fewer games