Electronic Arts, Inc. and Subsidiaries - Page 6




                                        - 6 -                                         
          including such well-known entertainment systems as the Sega                 
          Genesis, Sony Playstations, and Nintendo Systems, as well as                
          Apple and IBM-compatible computers.  EA derived its revenues                
          during the years in issue predominantly from the sale to both               
          U.S. and foreign customers of standardized video game cartridges            
          and compact discs containing entertainment software.  Under a               
          license agreement between EA and Sega Enterprises Ltd.                      
          (hereinafter sometimes referred to as Sega), dated July 1992,               
          Sega granted to EA and any affiliate controlled by EA a license             
          to use Sega intangible property to develop, manufacture, market,            
          and sell video game cartridges compatible with the Sega Genesis             
          systems.  EA distributed products primarily through its own sales           
          force in the United States, which sold directly to retail chains            
          and outlets.  Outside the United States, EA distributed its                 
          products primarily through affiliates and third-party                       
          distributors.                                                               
               Before the years in issue, EA relied on unrelated video game           
          manufacturers located in Taiwan and Japan to manufacture the                
          video games.                                                                
               Beginning in 1991 (during EA’s fiscal 1992), EA became                 
          interested in, and investigated the feasibility of, establishing            
          a video game undertaking in Puerto Rico through a wholly owned              
          subsidiary.  In 1992, EA engaged Richard Baker as a consultant to           
          provide advice in connection with the investigation and                     






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011