Net revenue for the third quarter was $1.28 billion, up one percent as compared with $1.27 billion for the prior year. Sales were driven by Need for Speed Carbon, FIFA 07, The Sims 2 Pets and Madden NFL 07 - each selling over 3 million copies in the quarter.

Gross profit for the quarter was $811 million, up six percent year-over-year. Net income for the quarter was $160 million as compared with $259 million for the prior year. The Company adopted Statement of Financial Accounting Standards (SFAS) No. 123 "Share-Based Payment" at the beginning of its fiscal year resulting in an after-tax stock-based compensation charge of $28 million or $0.09 per share in the third quarter. Diluted earnings per share were $0.50 as compared with $0.83 for the prior year.

Non-GAAP net income was $201 million as compared with $268 million a year ago. Non-GAAP diluted earnings per share were $0.63 as compared with $0.86 for the prior year. (Please see Non-GAAP Financial Measures and reconciliation information included in this release.)

Trailing twelve month operating cash flow was $520 million as compared with $733 million a year ago. The Company ended the quarter with cash, short-term investments and marketable securities of $2.6 billion.

"We are pleased with the performance of our products on next-generation consoles," said Larry Probst, Chairman and Chief Executive Officer. "In the year ahead, we plan to build on our leadership position on both the Xbox 360 and the PlayStation 3, and to significantly increase our support for the Nintendo platforms."

"The past several years have been about investment. The coming years are about growth and reward," said Warren Jenson, Chief Financial and Administrative Officer. "Our digital revenue hit a record $115 million over the last twelve months and our mobile revenue reached $100 million in the past nine months alone."

Highlights (comparisons are to the quarter ended December 31, 2005)

• Net revenue: North America - up three percent to $637 million; Europe - up one percent to $583 million; Asia - down 19 percent to $61 million. Movements in foreign currency rates positively impacted net revenue by $33 million, or three percent.
• Need for Speed Carbon sold over eight million copies in the quarter and was a top-five title in North America and Europe.
• Madden NFL 07 was the most popular game of 2006 in North America, selling over eight million copies since launch.
• FIFA 07 was EA's top-selling European title with over six million copies sold globally since launch.
• Titles from The Sims 2 franchise sold over 10 million copies in the quarter - with The Sims 2 Pets selling over five million copies.
• EA launched four PlayStation 3 titles in the quarter resulting in 32 percent revenue share in North America.
• In calendar year 2006, EA was the number one publisher on the Xbox 360 , PlayStation 3, PlayStation 2, Xbox , PC and PSP (PlayStation Portable) in both North America and Europe. EA was the number two publisher on the Nintendo DS in Europe.
• EA had two of the top-five titles in North America and four of the top-five titles in Europe across all platforms in calendar year 2006.
• EA completed its acquisition of Digital Illusions in the quarter - bringing the critically acclaimed Battlefield franchise to EA.
• EA acquired Headgate Studios, a talented development team focused exclusively on the Wii.
• EA Partners signed an agreement to publish Pandemic Studios' Mercenaries 2: World in Flames for the 2007 holiday season.

Business Outlook

The following forward-looking statements, as well as those made above, reflect expectations as of February 1, 2007. Results may be materially different and are affected by many factors, such as: consumer demand for next-generation consoles and the ability of the console manufacturers to produce an adequate supply of consoles to meet that demand; development delays on EA's products; changes in foreign exchange rates; the overall global economy; the popular appeal of EA's products; competition in the industry; EA's effective tax rate and other factors detailed in this release and in EA's annual and quarterly SEC filings.

Fiscal Fourth Quarter Expectations - Ending March 31, 2007

• Net revenue is expected to be between $550 and $600 million.
• GAAP diluted loss per share is expected to be between ($0.17) and ($0.12).
• Non-GAAP diluted earnings per share are expected to be between roughly breakeven and $0.03. Expected non-GAAP diluted earnings per share exclude the following items from expected GAAP diluted loss per share: approximately $0.08 of estimated stock-based compensation; approximately $0.03 of amortization of intangible assets; approximately $0.02 of estimated restructuring charges; and approximately $0.02 related to the Company's acquisition of Mythic Entertainment.

Fiscal Year Expectations - Ending March 31, 2007

• Net revenue is expected to be between $3.025 and $3.075 billion - as compared to previous expectations of $2.950 to 3.125 billion.
• GAAP diluted earnings per share are expected to be between $0.15 and $0.20 - up from previous expectations of breakeven to $0.15.
• Non-GAAP diluted earnings per share are expected to be between $0.70 and $0.74 - up from previous expectations of $0.55 to $0.70. Expected non-GAAP diluted earnings per share exclude the following items from expected GAAP diluted earnings per share: approximately $0.34 of estimated stock-based compensation; approximately $0.13 of amortization of intangible assets; approximately $0.05 of estimated restructuring charges; approximately $0.03 related to our acquisition of Mythic Entertainment.

Deferred Revenue Recognition For Certain Online-Enabled Packaged Goods

The Company also announced today that, starting in fiscal 2008, the Company will begin recognizing revenue associated with certain online-enabled packaged goods games over the estimated hosting service period. As a result, the Company anticipates that a significant amount of net revenue that otherwise would have been recognized in fiscal 2008 will be recognized in fiscal 2009.