EA Beats Expectations for Q2 Fiscal Year 2011

Electronic Arts Inc. (NASDAQ: ERTS) today announced preliminary financial results for its second fiscal quarter ended September 30, 2010.

“We had another strong quarter, beating expectations both top and bottom line,” said John Riccitiello, Chief Executive Officer. “We credit our results to blockbusters like FIFA 11 and to innovative digital offerings like The Sims 3 Ambitions and Madden NFL 11 on the iPad.”

“EA reaffirms its FY11 non-GAAP guidance,” said Eric Brown, Chief Financial Officer. “EA is the world’s #1 publisher calendar year-to-date and our portfolio is focused on high-growth platforms -- high definition consoles, PC and mobile.”

Selected Quarterly Operating Highlights and Metrics:

• EA is the #1 publisher on high-definition consoles with 25% segment share calendar year-to date, two points higher than the same period a year ago.

• In North America and Europe, the high-definition console software market is growing strongly with the combined PlayStation3 and Xbox 360 segments up 23% calendar year-to-date. The PlayStation 3 software market is up 36% calendar year-to-date.

• EA is the #1 PC publisher with 27% segment share at retail calendar year-to-date and strong growth in digital downloads of full-game software.

• For the quarter, EA had six of the top 20 selling games in Western markets with FIFA 11, Madden NFL 11, NCAA Football 11, NHL11, Battlefield: Bad Company 2 and FIFA 10.

• FIFA 11 was the #1 title in Europe in the second quarter, and life to date, the FIFA franchise has sold over 100 million units worldwide.

• EA was the #1 publisher across all platforms on the Apple App Store in the quarter.

• At GamesCom, EA won more nominations (10) and awards (five) than any other publisher. Winners included: Crysis 2 for Best PC Game; Dead Space 2 for Best Survival Game; Rock Band 3 for Best Music Game (with MTV/Harmonix); Star Wars: The Old Republic for Best MMO Game; and FIFA 11 for Best of GamesCom.

• On October 19, 2010, EA acquired Chillingo, a publisher of top iOS titles including Cut the Rope and Angry Birds. Chillingo extends EA’s App Store leadership and adds an open social gaming platform to EAi’s publishing capabilities.

• Medal of Honor is off to a strong start, selling-through 2 million units in just two weeks in October.

Q2 FY11 Financial Highlights:

Non-GAAP net revenue of $884 million exceeded guidance of $775 million to $825 million. Non-GAAP EPS of $0.10 exceeded guidance of ($0.15) to ($0.10). As expected, non-GAAP net revenue in Q2 fiscal 11 was lower compared to Q2 fiscal 10 due to lower distribution revenues and a reduced title slate, which went from nine major titles in Q2 fiscal 10 to seven in Q2 fiscal 11. This was partially offset by digital revenue growth.

Cost Reduction Plan

EA has announced a plan to restructure key licensing and developer agreements to improve the long-term profitability of its packaged goods portfolio, and expects to incur one-time GAAP restructuring charges of up to approximately $180 million in the second half of fiscal year 2011. Benefits of the restructuring are expected starting in fiscal 2012 and beyond.

EA Upcoming Titles