“We had a solid first quarter, exceeding expectations both top and bottom line,” said John Riccitiello, Chief Executive Officer. “Top quality titles like 2010 FIFA World Cup South Africa, innovative digital offerings for titles like Battlefield: Bad Company 2 and Scrabble on the Apple iPad are driving the business.”

“EA is well-positioned for the year ahead and reaffirms its FY11 non-GAAP guidance,” said Eric Brown, Chief Financial Officer. “Digital revenue is expected to grow approximately 30% year over year, to $750 million in the fiscal year.”

Non-GAAP net revenue of $539 million exceeded guidance of $460 million to $500 million. Non-GAAP EPS of ($0.24) exceeded guidance of ($0.35) to ($0.40). As expected, non-GAAP net revenue in Q1 fiscal 11 was lower compared to Q1 fiscal 10 due to a reduced title slate, which went from 10 major titles in Q1 fiscal 10 to six in Q1 fiscal 11. This was somewhat offset by strong digital revenue growth.

Trailing Twelve Month (TTM) Financial Highlights:

Q1 FY11 Digital Metrics:

Selected Quarterly Operating Highlights and Metrics:

• EA is the #1 publisher on high definition consoles with 22% segment share calendar year-to-date, four 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 21% calendar year-to-date. The PlayStation 3 software market is up 40% calendar year-to-date.
• EA is the #1 PC publisher, with 33% segment share at retail calendar year-to-date and strong growth in digital downloads of full-game software.
• For the quarter, EA had three of the top 15 selling games in Western markets. 2010 FIFA World Cup South Africa was #4, Battlefield: Bad Company 2 was #7 and FIFA 10 was #12.
• At E3, EA won more nominations (15) and awards (four) than any other publisher. Winners included: Need for Speed Hot Pursuit for Best Racing Game; NBA Jam for Best Sports Game; Star Wars The Old Republic for Best Role Playing Game; and Rock Band 3 (with MTV/Harmonix) for Best Social Game.
• Madden NFL 11 will debut with GameFlow, an innovation which makes the game more accessible to casual players. GameFlow offers simpler play choices and a quicker path to the action, without compromising the deep playbook that makes Madden so popular with hardcore players.
• In Korea, FIFA Online 2 reached five million registered players, over three million unique players enjoyed the game in July alone and concurrent users peaked at over 200,000. June and July were FIFA Online 2’s highest-grossing revenue months ever and it remains a top-three game in Korea.
• EA was the #1 publisher across all platforms on the Apple App Store in the June quarter. EA had nine of the top ten games when the iPhone 4 launched in June.

Business Outlook as of August 3, 2010

The following forward-looking statements, as well as those made above, reflect expectations as of August 3, 2010. Electronic Arts assumes no obligation to update these statements. Results may be materially different and are affected by many factors, including: product development delays; competition in the industry; the health of the economy in the U.S. and abroad and the related impact on discretionary consumer spending; changes in anticipated costs; expected savings and impact on EA’s operations of the Company’s cost reduction plan; consumer demand for console hardware and the ability of the console manufacturers to produce an adequate supply of consoles to meet that demand; changes in foreign exchange rates; the financial impact of potential future acquisitions by EA; the popular appeal of EA’s products; EA’s effective tax rate; and other factors detailed in this release and in EA’s annual and quarterly SEC filings.

Second Quarter Fiscal Year 2011 Expectations – Ending September 30, 2010

• GAAP net revenue is expected to be approximately $600 to $650 million.
• Non-GAAP net revenue is expected to be approximately $775 to $825 million.
• GAAP diluted loss per share is expected to be approximately ($0.90) to ($0.80).
• Non-GAAP diluted loss per share is expected to be approximately ($0.15) to ($0.10).
• For purposes of calculating second quarter fiscal year 2011 loss per share, the Company estimates a share count of 329 million.
• Expected non-GAAP net income excludes the following items from expected GAAP net income:
  • Non-GAAP net revenue is expected to be approximately $175 million higher than GAAP net revenue due to the impact of the change in deferred net revenue (packaged goods and digital content);
  • Approximately $45 million of estimated stock-based compensation;
  • Approximately $18 million of acquisition-related expenses;
  • Approximately $5 million of restructuring charges;
  • Approximately $28 million from net gains on sale of strategic investments; and
  • $13 to $30 million in the difference between the Company’s GAAP and non-GAAP tax expenses.

Fiscal Year 2011 Expectations – Ending March 31, 2011

EA is affirming its full year FY11 non-GAAP guidance for both net revenue and earnings per share.

• GAAP net revenue is expected to be approximately $3.35 to $3.60 billion and non-GAAP net revenue is expected to be approximately $3.65 to $3.90 billion, both consistent with the Company’s previously provided guidance.

• GAAP operating expense is expected to be approximately $2.25 billion and non-GAAP operating expense is expected to be approximately $2 billion.
• GAAP diluted loss per share is expected to be approximately ($0.70) to ($1.00), an improvement from prior expectations of ($0.85) to ($1.15), due primarily to gains on sales of strategic investments and a reduction in forecasted stock compensation expense.
• Non-GAAP diluted earnings per share are expected to be approximately $0.50 to $0.70.
• For purposes of calculating fiscal year 2011 earnings/(loss) per share, the Company estimates a share count of 330 million for loss per share computations and 334 million for earnings per share computations.
• Expected non-GAAP net income excludes the following items from expected GAAP net loss:
  • Non-GAAP net revenue is expected to be approximately $300 million higher than GAAP revenue due to the impact of the change in deferred net revenue (packaged goods and digital content);
  • Approximately $180 million of estimated stock-based compensation;
  • Approximately $70 million of acquisition-related expenses;
  • $10 to $15 million of restructuring charges;
  • Approximately $23 million from net gains on sale of strategic investments; and
  • ($45) to ($71) million in the difference between the Company’s GAAP and non-GAAP tax expenses.

• The fiscal year 2011 net revenue phasing is expected to be allocated as follows for the rest of the fiscal year as a percent of total annual net revenue. The difference between GAAP and non-GAAP quarterly net revenue phasing is due to the change in deferred revenue (packaged goods and digital content):

Fiscal Year 2011 Key Titles by Label and Platform