Electronic Arts

Strategic execution · Merger acquisition and divestiture risks

If our proposed Merger does not close, or is delayed, we may experience financial and operational disruptions. In addition, our stock price may decline if the Merger is perceived as uncertain to close.

Market position and competition · Competitive pressure and market share loss

Competition in our business is intense. Many new products and services are regularly introduced, but only a relatively small number of products and associated services drive significant engagement and account for a significant portion of total revenue.

Customer and revenue · Revenue concentration in specific products or segments

A significant portion of our revenue historically has been derived from products and services based on a few popular franchises, and the underperformance of a single major title has had, and could in the future have, a material adverse impact on our financial results.

Strategic execution · Strategic transformation and turnaround risks

We could fail to successfully adopt new business models. Forecasting the success of any new business model is inherently uncertain and depends on a number of factors both within and outside of our control.

Innovation and product development · Intellectual property protection and infringement

We may be unable to maintain or acquire licenses to include intellectual property owned by others in our games, or to maintain or acquire the rights to publish or distribute games developed by others. Competition for these licenses and rights is intense.

Core operations · Operational disruption and business continuity

Uncertainty about the effect of the Merger may impair our ability to attract, retain, and motivate key personnel, and could cause customers, suppliers, financial counterparties, and others to seek to change existing business relationships with us.

Project and contract management · Project execution and delivery risks

We may not meet our product and live service development schedules. Our ability to meet product and live service development schedules is affected by a number of factors both within and outside our control, including feedback from our players, the creative processes involved, the coordination of large and sometimes geographically dispersed development teams.

Core operations · Quality control and product defects

Our products and services are extremely complex software programs and are difficult to develop and distribute. If these quality controls and preventative measures are not effective in detecting all defects, bugs or errors in our products and services before they have been released into the marketplace, then our products and services could be below our standards.

Supply chain and procurement · Supplier operation and dependance

We contract with external game developers to develop our games or to publish or distribute their games. If we have disputes with external developers or they cannot meet product development schedules, we may delay or cancel previously announced games.

Legal and litigation · Litigation and legal proceedings

Putative stockholder complaints, including stockholder class action complaints, and other complaints have been or in the future may be filed against us, our Board of Directors and others in connection with the transactions contemplated by the Merger Agreement.

Digital transformation and innovation · Technology obsolescence and evolution

Rapid changes in our industry require us to anticipate, sometimes years in advance, the ways in which our business can remain competitive in the market. We expect our competitive landscape to evolve as artificial intelligence technology advances and is integrated into the markets in which we compete.

Digital transformation and innovation · Artificial intelligence and automation

We are integrating artificial intelligence tools and technologies into our business and development processes. The use of artificial intelligence might present social and ethical issues that, if not managed appropriately, may result in legal and reputational harm.

Information management · Technology vendor dependence

Our business depends on the success and availability of consoles, platforms and devices developed by third parties and our ability to develop and maintain commercially successful products and services for those consoles, platforms and devices.

Cybersecurity and data protection · Data breaches and cyber attacks

We have and may continue to experience security breaches and cyber threats. Our industry is prone to, and our systems and networks are subject to actions by malfeasant actors, which may include individuals or groups, including state-sponsored attackers. These actions include cyber-attacks, including ransomware, and other information security incidents.

Cybersecurity and data protection · Insider threats and access controls

Our systems and networks could be harmed or improperly accessed due to errors by employees or third parties that are authorized to access these networks and systems.

Reputation and brand · Brand damage and negative publicity

Expectations regarding the quality, performance and integrity of our business, brand, reputation, culture, products and services are high. Players and other stakeholders have sometimes been critical of our industry, brands, products, services, online communities, business models and/or practices.

Stakeholder relations · Supplier and vendor relationships

We rely on various business partners, including platform partners, third-party service providers, vendors, licensing partners, development partners and licensees. Their actions may put our business and our reputation and brand at risk.

Natural and catastrophic events · Natural disasters and extreme weather

Catastrophic events, including natural disasters, cyber-incidents, power disruptions, pandemics, acts of terrorism or other events have caused, and in the future could cause, outages, disruptions and/or degradations of our infrastructure.

Natural and catastrophic events · Climate change and environmental impact

We recognize the inherent physical risks associated with climate change. Our business relies on the reliable transmission of energy worldwide and is susceptible to weather-related events that could stress the power grid.

Natural and catastrophic events · Pandemic and public health crises

Catastrophic events, including natural disasters, cyber-incidents, power disruptions, pandemics, acts of terrorism or other events have caused, and in the future could cause, outages, disruptions and/or degradations of our infrastructure.