Original Source: FD (FAIR DISCLOSURE) WIRE

PARTICIPANTS

. Tricia Gugler, Electronic Arts Inc., Director of IR . Warren Jenson, Electronic Arts Inc., EVP, CFO and CAO . John Riccitiello, Electronic Arts Inc., CEO . Brent Thill, Citigroup, Analyst . Frank Gibeau, Electronic Arts Inc., President of EA Games . Edward Urban, Bear, Stearns & Co., Analyst . John Taylor, Arcadia Investment Corporation, Analyst . Arvind Bhatia, Sterne, Agee & Leach, Inc., Analyst . David Joseph, Morgan Stanley, Analyst . Thomas Andrews, BMO Capital Markets, Analyst . Jeetil Patel, Deutsche Bank, Analyst . Tony Gikas, Piper Jaffray & Co., Analyst . Heath Terry, Credit Suisse, Analyst . Michael Savner, Banc of America Securities, Analyst . Justin Post, Merrill Lynch, Analyst . Ben Schachter, UBS, Analyst

. Ralph Schackart, William Blair & Company, Analyst

OVERVIEW

ERTS reported that it reached a definitive agreement with Elevation Partners to acquire BioWare Corp. and Pandemic Studios. In total, Co. is paying $860m in consideration, including $655m in cash and up to an additional $155m in equity to employee owners.

PRESENTATION SUMMARY

S1. Acquisition Details (W.J.) 1. Highlights: 1. Reached a definitive agreement with Elevation Partners to acquire two major game developers. 1. BioWare based in Edmonton, Canada and Austin, Texas. 2. Pandemic based in Los Angeles and Brisbane, Australia.

2. BioWare, founded by Greg Zeschuk and Ray Muzyka, is the

renowned producer of blockbuster franchises such as: 1. Baldur's Gate. 2. Knights of the Old Republic. 3. Mass Effect.

3. Pandemic, lead by Josh Resnick, Andrew Goldman and Greg

Borrud, is best known for titles like: 1. Star Wars Battlefront.

2. Mercenaries. 2. Strategic Rationale: 1. Together, these studios represent one of the most prolific and high quality creative organizations in the industry. 2. These are premier developers proven by a strong track record. 1. BioWare is one of the foremost RPG developers in the world. 1. Knights of the Old Republic, Neverwinter Nights, Baldur's Gate and Jade Empire, all speaks for themselves. 2. Mass Effect is on the way, an owned IP that will be published by Microsoft. 2. Pandemic is best known for creating action games and developing its own IP. 1. Pandemic worked with LucasArts to develop the award winning Star Wars Battlefront I and II and Clone Wars, each selling more than 3m copies. 2. This studio had great success with two owned and highly rated IPs, Mercenaries and Full Spectrum Warrior. 3. Pandemic is currently working on several new titles including Mercenaries 2 and Saboteur. 3. This acquisition fills out a gap in Co.'s genre lineup. 1. Co. is currently underrepresented in key genres, RPG, Action, and Adventure. 1. In calendar 2006, these genres represented 36% of the North American segment and Co. estimates 29% in Europe. 2. With Pandemic and BioWare, Co. now have the potential to move into strong competitive positions in these genres as it expects to bring ten franchises to market in the next few years, six of which are wholly owned. 4. Further expansion to into the MMO space. 1. BioWare is developing an MMO in their Austin studio. 5. Co. projects solid long-term financial returns. 1. In FY09 and FY10, Co. expects BioWare and Pandemic

properties to: 1. Deliver revenue, ex-deferral, in excess of $300m annually including the EA Partner titles. 2. Generate non-GAAP GM in excess of 65%. 2. Looking at non-GAAP EPS, Co. would expect the transaction to be dilutive to ERTS's 4Q08 results by roughly $0.05, break-even in FY09, and solidly accretive thereafter. 1. Where it not for the existing EA Partners relationship, the transaction would have been accretive in FY09. 6. These teams are a great cultural fit. 3. Financial Information: 1. In total, Co. is paying $860m in consideration, including $655m in cash and up to an additional $155m in equity to employee owners. 1. All of the equity portion has time or performance-based vesting triggers. 2. ERTS will assume outstanding VG Holding Corp. stock options. 3. Acquisition is subject to customary closing conditions including regulatory approvals. 1. Expects the closing to occur in early Jan. 2008.

4. On GAAP EPS basis, Co. expects the acquisition to be dilutive

to FY08 results by approx. $0.30-0.40 due to non-recurring

acquisition-related charges, stock-based compensation and

amortization of intangible assets. 5. In 2009, Co. anticipates the acquisition will continue to be dilutive on a GAAP basis given revenue deferrals, ongoing stock-based compensation and intangible asset amortization. 6. GAAP EPS: 1. Of $155m of equity, roughly $125m will be amortized to the P&L as stock-based compensation over the next four years. 2. For assumed optioned, the newly granted equity, Co. estimates an additional $40m will be amortized as stock-based compensation over the next four years.

3. GAAP charges for FY08 are preliminary, as final valuation work has not been completed. 4. On non-GAAP basis, Co. would expects the transaction to be dilutive to 4Q08 results by roughly $0.05, break-even in FY09 and solidly accretive thereafter. 1. Where it not for the existing EA Partners relationship, the transaction would have been accretive in FY09.

S2. Closing Remarks (J.R.) 1. Remarks: 1. John Riccitiello brought the two studios together and led the business as CEO. 2. Board of Directors of ERTS instituted a process under which members of the audit committee engage directly and independently [from May] with the management team throughout the decision making process. 1. This was done in order to ensure deal independence.

QUESTION AND ANSWER SUMMARY

OPERATOR: Thank you, Mr. Riccitiello. (OPERATOR INSTRUCTIONS). Brent Thill, Citigroup.

BRENT THILL, ANALYST, CITIGROUP: If you could just walk through kind of your ROI analysis? And I think, Warren, you mentioned roughly $600 million over the next two years, some of the metrics that you're looking at on what you pay for the Company?

WARREN JENSON, EVP, CFO AND CAO, ELECTRONIC ARTS INC.: Let me start, because the ROI and the metrics really is where it -- I think those two are very much together. We looked at our acquisition analysis, just like we do any other deal. We take a look at -- it starts with our diligence process. So, we're looking at what IPs are in the works, when do we think they ship, and what do we think the quality is? I think one of the very positive things you have with this transaction is you have several -- you obviously have incredibly high quality developers with an excellent track record. And Frank can jump in and talk a little bit more about our diligence process around the titles.

We then go about forecasting what the revenues will be, our unit assumptions and our operating expenses, and from there calculate both our accretion and dilution and calculate our ROI. Our calculated ROI on this transaction is in the high teens and candidly, we would hope to do better.

FRANK GIBEAU, PRESIDENT OF EA GAMES, ELECTRONIC ARTS INC.: Yes. What I would add to that is that in the diligence process, part of the ROI was we looked pretty deeply at the pipeline of products coming as well as the type of products. And when we looked at 10 plus franchises slated for the course of the next several years, in addition to that, a highly leveraged MMO underdevelopment out of Austin for the BioWare team, those are key drivers of value inside the organization. Clearly, the incredible talent that comes with these two organizations and also the strong cultural fit were key issues in terms of how we put the valuation together.

The model that we put together from a diligence standpoint, conservatively put together a forecasted set of revenues profit over the next several years, and we feel like we took very good stances on opportunities and things like paydown [level of content], advertising and other online leverage.

OPERATOR: Edward Urban, Bear Stearns.

EDWARD URBAN, ANALYST, BEAR, STEARNS & CO.: I was wondering if you could tell us which of the IPs will transfer over as part of the transaction? And also, what the average unit sales have been for those IPs in the past?

FRANK GIBEAU: In terms of the IPs that will transfer over, Mass Effect is a BioWare IP. The product is being published this November by Microsoft, but that is an IP that's owned by BioWare. With regards to Pandemic, Mercenaries, and they've also announced Saboteur as part of that transaction. Of those 10 plus franchises that I mentioned, there's many titles that have not yet been announced that we will be announcing in the near future. But that gives you a sense of what is coming with the transaction. The last one I would add also is Jade Empire and also Full Spectrum Warrior.

WARREN JENSON: And on the unit sales -- and please accept these as rough approximations -- looking at Baldur's Gate, roughly 2.1 million units; Neverwinter Nights, 2.2 million units; Knights of the Old Republic, 3.2 million units; Star Wars Clone Wars, 3.1 million; Star Wars Battlefront, 4.9 million; Battlefront II, 6.5 million.

EDWARD URBAN: Okay. And those are worldwide numbers?

WARREN JENSON: Yes.

EDWARD URBAN: Okay. That's great. Thank you.

OPERATOR: John Taylor, Arcadia.

JOHN TAYLOR, ANALYST, ARCADIA INVESTMENT CORPORATION: I have two questions as well. One is, does any of the IP in either of the two studios lend itself particularly well to either DS or Wii? And the second question is, of the 300-ish in non-GAAP revenue, could you give us a rough breakdown between how much of that might be published versus royalty? Thanks.

FRANK GIBEAU: I'll take the first one, maybe Warren can talk about the second. We do have DS and Nintendo development underway with both locations. The Sonic NDS product is something that has been publicly announced already, but we have several unannounced titles that are targeted both at the Wii end and DS.

WARREN JENSON: And on the royalty side, this gets a little bit tricky as obviously we had -- we have an EAP relationship on three titles; two of which have not been announced, the other being Mercenaries. So for fiscal '09, I would take the breakdown looking at, again, rough approximation of the 300 as being 200 call it royalty based and 100 publishing.

OPERATOR: Arvind Bhatia, Sterne, Agee.

ARVIND BHATIA, ANALYST, STERNE, AGEE & LEACH, INC.: I was wondering as a result of this acquisition if you guys think there is going to be much overlap and resultant headcount reductions at core EA? And can you speak to any technology you're getting as a result of -- any unique technology you're getting as a result of this acquisition?

WARREN JENSON: I'll speak to the first question and then John or Frank might want to jump in on the second. I would not expect a lot of synergies coming directly out of this acquisition. These are wonderful developers with very limited overhead. And it's part of the beauty of the transaction -- one of the beauties of the transaction is this is a relatively straightforward integration with great organizations that have great cultures that we think will fit very well with us.

FRANK GIBEAU: This is Frank. It's largely a plug and play developer acquisition into our global publishing organization. So we expect that there will be a lot of leverage by getting to greater reach on their franchises, but we don't -- there's not a lot of overhead that we're picking up in this transaction that would be synergistic to an EA equation.

With regards to technology, both BioWare and Pandemic have their own proprietary engine development across multiple franchises and on multiple platforms. And then clearly, the MMO is breaking new ground technically on lots of fronts. So there is value in a lot of the things that they've done. One particular piece of technology that's very exciting that you've seen is the dialogue engine in Mass Effect. Perhaps you've seen that in some of the reviews, and I know customers are going to be blown away by it this November. But there's pieces of engines in it, full engines, in this organization.

WARREN JENSON: I think I'd make one additional point. It's not a classic cost synergy but one of the other real benefits of this transaction that I spoke to and Frank did, it is where the titles line up and in what genres. So, given RPG action and adventure, that's just the place where we have not historically been strong. And it's pretty hard when you look at a lot of deals to find a better line-up of titles that just fit perfectly into genres where we are not as strong. So, again, while not a synergy per se, it's a real strategic benefit in that it strengthens us exactly where we need to be made stronger.

ARVIND BHATIA: Great. Thank you.

OPERATOR: David Joseph, Morgan Stanley.

DAVID JOSEPH, ANALYST, MORGAN STANLEY: I think just stepping back a little bit from the higher levels, I'm trying to get a little bit of an understanding or more of an understanding of exactly what EA brings to the table here, and then also what Pandemic and BioWare bring to the table. In other words, do you see an opportunity to better monetize their titles more effectively? And are they going to have an influence on the development internally? Or are they really going to be, I guess, treated as a separate studio underneath the EA umbrella?

JOHN RICCITIELLO, CEO, ELECTRONIC ARTS INC.: This is John. Broadly speaking, I do think we bring a lot to the table. As an independent developer, you have to spend a lot of time courting independent publishers to bring your titles to market, negotiating deals to ensure your titles get advertised. What we're able to do is simplify that process, basically take it to zero relative to the folks at BioWare and Pandemic, and offer them leverage of the world's best publishing organization. And our publishing organization goes beyond the marketplace that BioWare and Pandemic currently reach to include much more in the way of online and much more in the way of mobile. So we reach places where they don't get so we can build their properties bigger than they otherwise would be able to do. I consider that a big plus.

And I think Frank categorized very well what they bring to the table for us, and Warren has emphasized that as well. We are not essentially in the open world action adventure business. These guys are leaders. We are not in the RPG business. These guys are leaders. Strong intellectual property and talent. Sitting here since the press release went out, Frank, Warren and I have been the recipients of literally dozens of e-mails from people internal to the organization that recognize those strengths and are, frankly, throwing a little bit of a party about the opportunity to work with talent like these two studios.

DAVID JOSEPH: Great. Thanks a lot.

OPERATOR: Thomas Andrews, BMO Capital Markets.

THOMAS ANDREWS, ANALYST, BMO CAPITAL MARKETS: Just one question. On the 10 titles that you've been referencing, can you give us a sense on what the timing on the 10 are? Do you have a couple this year? How many in '09 and how many in '10? And then on the MMO, what's the timing look like on that particular property?

FRANK GIBEAU: The pipeline is slated to release fairly evenly over '09, '10 and '11. Right now, the MMO is more towards the back half of that, but it looks like it's four to five a year through '09, '10 and '11.

THOMAS ANDREWS: And then just -- is there any plans to kind of consolidate the studios, you know, move them around at all? Or are you going to keep them where they are?

FRANK GIBEAU: Actually, quite the opposite. These are extremely strong studios in their own right. They have very rich cultures that really drive an incredible world-class creative process. Inside of our label structure, they're going to be maintaining their autonomy and their cultural independence. We really believe in what they're building and how they're going about it. And the new legal structure at EA really allows us to plug and play these guys so that you maximize what they're terrific at while they reap the benefits of the scale of EA's organization.

THOMAS ANDREWS: Great. Thanks very much.

OPERATOR: Jeetil Patel, Deutsche Bank.

JEETIL PATEL, ANALYST, DEUTSCHE BANK: A couple questions. First of all, just by calculations, it seems like this business does maybe about 9% to 10% operating margins in fiscal '09, judging by the breakeven commentary. I guess where do you think the margins get to as it relates to the two acquisitions over the course of the cycle? Do you think this gets up to the -- call it in the 20% range? Or do you think that it may be difficult, given that you're buying a lot of developers that will create future products, and who knows how that shapes up?

But -- and second, I guess, can you comment about just the overall landscape as we go into the holiday season at this point? I'm not sure if anyone's focused there but can you talk about, I guess, how you think the retail landscape is shaping up at this point in time with having passed the halo effect as well as the price cuts out there? Thanks.

JOHN RICCITIELLO: This is John. There's a couple questions there. I'm not sure how you got to the 9 or 10 but that's significantly off what we've modeled internally. Remember, these are cost efficient studios with owned IP, bringing them to market. The issue is that when we forecast a breakeven is that we've got a situation where EA is already publishing the bulk of their titles. So, it's sort of already captured in our P&L. But I think you've probably seen lots of models on EA. I'm not going to get into an early forecast for FY '09 at the moment for the entire Company, but you're way under anything we've modeled with your 9 to 10.

In terms of the holiday line-up, it's actually shaping up to be a great year. I happen to have just been in Wal-Mart and Best Buy last week. I had an opportunity to visit with a number of our retailers, and we are seeing strong pickup across our product lines and others in the industry. It looks like we're ahead of a good holiday season.

WARREN JENSON: I might also add, and I can probably give a little bit of color to that on top of what John said, by just giving you a preliminary look at where our current quarter came out. What I will say about it is that if you look at the quarter, we expect to exceed our guidance range, both for our GAAP and non-GAAP results. So, we will be in excess of our guidance range. So I think that's very much a positive.

Now, a couple of things that I want to be clear about. The bulk of the year is ahead of us. We did have a solid Q2. Over the next several weeks, leading into our conference call in early November, we'll be scrubbing our SKU plans and making adjustments as necessary. And as we look to our guidance for the back part of the year, we'll address that on our call in early November.

JEETIL PATEL: So you still feel confident with the 25% growth for the December quarter versus the industry growing about 5 to 10 for the quarter?

WARREN JENSON: Again, I'm not going to update our guidance for the December quarter on this call. What we wanted to essentially tell you is give you a quick look at where we were coming out for Q2. Again, we'll exceed our guidance for both our GAAP and non-GAAP results. Over the next few weeks as we lead into the conference call, we'll be taking a look at all the market factors, looking at our SKU plan, and we'll update our guidance at that time.

OPERATOR: Tony Gikas, Piper Jaffray.

TONY GIKAS, ANALYST, PIPER JAFFRAY & CO.: A couple quick questions. Maybe the obvious one here -- in the fourth quarter, when the deal closes, could you just outline what products will impact the revenue line, what the revenue impact might be, and maybe a little bit on how the expenses break down across the outlines?

Second question -- any new IP that they're working on developing that you're going to get an opportunity to help them build?

FRANK GIBEAU: Well, I think with regards to your first question, the title that they have releasing is Mass Effect, which is published by Microsoft in November. So looking at calendar Q4, that title is the only release coming from these two studios. With regards to the future, those things will be contemplated and engaged upon as we work through integration and start to bring them together with EA. Clearly, there are areas where we can develop a lot of leverage, both in development and engine sharing and also in terms of IPs.

WARREN JENSON: And then I would also add -- and I won't get specific as to day and day timing -- but at Mercenaries II, Saboteur, and there are a couple of titles that we haven't announced that we have been working with them through EA partners.

TONY GIKAS: Can you give us any visibility on the revenue or expenses expected in that fourth quarter?

WARREN JENSON: In the coming fourth quarter?

TONY GIKAS: Yes.

WARREN JENSON: I won't do that at this time.

TONY GIKAS: Okay. All right, thanks, guys.

OPERATOR: Heath Terry, Credit Suisse.

HEATH TERRY, ANALYST, CREDIT SUISSE: One, I just wanted to confirm, Warren, that I understood you right; but basically for Q2, you're saying that you've exceeded revenue and EPS on both a GAAP and non-GAAP basis?

WARREN JENSON: That's correct.

HEATH TERRY: Okay. Just -- since it was during the Q&A, I just wanted to make sure we got that right. And then in terms of the $200 million in royalty revenue and the $100 million in publishing revenue that you were talking about for the business, can you give us an idea of what gross sales would be on that or what kind of gross sales you're expecting to get to that $300 million?

WARREN JENSON: I want to be clear when we're talking about what royalty and publishing -- one of the things when we calculated our dilution is -- I mentioned and John just did again -- is we did not give ourselves credit for revenue and/or income that was already in our plan as a result of a publishing arrangement, say, on Mercenaries II, to be a good example. So, when I was talking about royalty income, I was talking about income that we may have gotten through our EA partners arrangement.

In terms of gross revenue for FY '09 coming from all of their titles, from what I tried to say in the script is that if you look at their titles and you say what is the gross revenue to be expected in FY '09 and in FY '10, we said that it would be -- that we expect it to be in excess of $300 million in each of those two years.

JOHN RICCITIELLO: This is John. I'm not sure everybody is familiar enough with our terminology, so let me clarify something. When we're talking about EAP, that's our publishing arm. Our publishing arm works with third party developers to bring their games to market. We have a relationship with VGH to bring three of their games to market in calendar '08, which is THE lion's share of their product portfolio. So what Warren is trying to say is that frankly, most of the 2008 slate for VGH is already in our numbers. And we didn't consider that when calculating accretion or dilution; we subtracted that out.

If this was a stand-alone acquisition, had we not had EAP deals already in place, this would have been accretive in 2009. It just happens it nets out to about breakeven in 2009, when we're carrying the cost of the business by subtracting out the P&L that we have positive in our business already. Is that clear?

HEATH TERRY: Yes. And I understand that. I guess I wasn't clear on the question that I was asking. What I'm asking is a gross revenue or a gross sales numbers for these titles. So, to take a title like Destroy All Humans, which -- the second one that's being done for THQ right now, I understand you will get a royalty rate or they will pay back to you a royalty rate for that title. But is there a feel for or a number that you can give us in terms of the gross sales that all of these titles -- or that you would expect this organization to do on an annual basis?

JOHN RICCITIELLO: I think that I see where you're coming from. First off, Destroy All Humans is an intellectual property owned by THQ. They're developing it, and it's not being developed by VGH, Pandemic, BioWare or any of our subsidiaries. So, that's sort of independent of us. But it's a good IP, and it was developed by Pandemic, to suggest that they're pretty smart guys and they can create new intellectual properties.

The second thing that I would offer you is we've been doing our level best to avoid pre-forecasting FY '09 and FY '10. There's a time and window for that. So we've been giving you round, conservative numbers for incremental revenue or for the revenues associated with these two studios. And we have not been trying to -- we've tried to avoid giving you specific title forecasts. We're trying to stay with the cadence that EA normally does in providing guidance for the coming fiscal year, which is associated with our year end numbers and full year financial forecast. So, if it sounds like we've been pervasive, we have been. We've been trying to [give you] round numbers that we know we're comfortable with without getting into per-title numbers.

HEATH TERRY: Right. Okay, thanks.

OPERATOR: Michael Savner, Banc of America Securities.

MICHAEL SAVNER, ANALYST, BANC OF AMERICA SECURITIES: Just one question. Can you just -- going back to the ROI question -- specifically over what time period do you see that being break even? And then over what time period do you think you're going to get to those mid to high teens?

WARREN JENSON: I think you can take -- an ROI calculation, as you know, is based on a certain projection horizon, which we will typically go anywhere from three to five years and then a set of assumptions relative to terminal value. In terms of our breakeven, I would more focus that on what I mentioned relative to our non-GAAP EPS results. And we've said, again, netting out what we're already counting on from our EA partners business, we would expect the transaction to be breakeven in fiscal '09, solidly accretive in fiscal '10.

MICHAEL SAVNER: And would that ROI target return within five years?

WARREN JENSON: Yes -- I won't comment specifically on the ROI sort of return, complete return, on capital over a number of years. It would be beyond FY '09, though, and beyond FY '10 and then into the next several years of the projection horizon.

MICHAEL SAVNER: Okay. Thank you.

JOHN RICCITIELLO: For clarity, we did not have EAP deals. This deal is positive and accretive for us really from the first title we ship with them, which is Mercenaries. We have already incorporated the Mercenaries P&L in our business forecast. So that's been stripped out. When we're talking about the high teens ROI, it's actually a quite stringent approach to ROI, because it also strips out the profitability associated with these two studios because we've already got that in our number. So what Warren is giving you is a relatively conservative framework, the exact framework we use with our discussions with the Board of Directors.

WARREN JENSON: Any final question?

OPERATOR: Justin Post, Merrill Lynch.

JUSTIN POST, ANALYST, MERRILL LYNCH: Thanks for taking my question. Warren, I think earlier in the script, you mentioned something about margins, 65%. I'm wondering if that's gross, and then we could come up with our own conclusions on the operating expenses. And then, John, I know you're with the Company several years -- I think it was seven years. Can you talk about some of the acquisitions historically that EA made during that period? And what things really worked for you going back then and why do you think this really could work for you today?

WARREN JENSON: The 65% margin was gross margin.

JOHN RICCITIELLO: This is John. During the time that I was at Electronic Arts, we did a number of acquisitions, and they've done some in the time while I was gone. In terms of like or comparable ones, you might look at Maxis or Westwood. Maxis and Westwood were both developer acquisitions. One was based in Walnut Creek, California; the other was based in Las Vegas. These were both smaller businesses than either BioWare or Pandemic. They both had approximately 100 people and they were basically prosecuting one intellectual property for each of the two developers. So, with Maxis it was SimCity, and with Westwood, it was Command and Conquer. And in a way, you could argue that they went very different routes, but they were both very successful for EA.

Maxis still is the core of the people and the brand of Maxis and the Sim brand has come forward and become a much, much bigger business. And like a lot of things that we see now in the Pandemic and BioWare portfolio, they were products that were early in development in the portfolio at Maxis. One of them was The Sims, which in many ways from a value prospective paid for that acquisition many times over. In the case of Westwood, it was the Command and Conquer franchise. Unlike the situation with Maxis, we were less successful on the integration there. Fewer of the people stayed. However, we were able to take the Command and Conquer intellectual property and build it significantly to being a very important and profitable franchise for the Company.

So I think on a retrospective basis, while neither studio is even half as large as either Pandemic or BioWare in terms of the number of intellectual properties, the number of teams or the number of developers in the organization, they represent good analogies. And in fact, the benchmarks that the deal team presented to the Board included benchmarks on Maxis and Westwood in terms of value comparisons, to help provide prospective and help determine what the appropriate negotiating price would be for this transaction.

JUSTIN POST: Great. Thank you. And anything you think is -- when you compare the transactions, this is, as we get into the cycle, the right time? Or what do you think is really special about this acquisition at this point?

JOHN RICCITIELLO: I think we've covered that a number of times in terms of talent; the strong position we get in action adventure and RPG; the large number of wholly owned IPs; the strong advance it gets us into the MMO business -- and there's a strong team in Austin pursuing that; cultural fit; and it's a strong financial return for our investors, our shareholders.

But I think if you ask about timing, this is actually a very good deal for us relative to timing. The last couple of years for independent developers, whether it's this one or others, for many has been very challenging. They've had a difficult time mastering next generation platforms like the PS 3 and the Xbox 360 and the Wii. They've had very difficult times getting to multiplatform execution. A lot of companies have had a very difficult time producing titles, even Metacritic'ing at 70, let alone 80 and 90. And a lot of challenge and risk went through this industry over the past three years, and many independent developers did not succeed in making the transitions I've just described.

What's pleasant and good for us is we're sort of getting them on the back end of having proven out those and many other strategic points that drive value for our shareholders and for our business. So we're sort of picking them up, if you will, post-risk.

WARREN JENSON: Operator, we'll take two more questions.

OPERATOR: Ben Schachter, UBS.

BEN SCHACHTER, ANALYST, UBS: John, when you think about this move you're making today, how indicative is this of your future strategy for EA in terms of -- some people think in cost cutting versus investment strategy? And then, the second question, Warren, I was just wondering, when you think about the ROI calculation, are you including the stock based comp in that? Thanks.

JOHN RICCITIELLO: So, in terms of this being indicative, what you're saying that we need to keep a hand on, if you will, two levers -- one being investment for growth and the other lever being strong and conservative cost management -- the answer is we need to do both. In this instance, we're getting very well cost managed developers that we're bringing in to the organization. And so I think we're doing both and we're going to continue to do both. So I'm not sure where else to take the answer other than that. We are very serious about managing our P&L and dealing with the cost side of the equation. Today we're talking about the other lever we're pulling, which is one about generating very profitable growth.

WARREN JENSON: And on the ROI question, an interesting thing about this transaction is that we actually really favored I think substance over forum. One of the key things for us was building in either time or performance-based triggers into the transaction, and we did that through equity based compensation. So, instead of paying cash up front, more of the transaction or at least part of the transaction was done with performance against performance or time based triggers in the equity consideration. So to answer your question directly on considered in the ROI calculation, the answer is yes, we consider that equity as part of the purchase price. Therefore, when we're looking at our ROI, that is directly taken into consideration when calculating the result.

BEN SCHACHTER: Great. Thanks.

WARREN JENSON: Final question?

OPERATOR: Ralph Schackart, William Blair.

RALPH SCHACKART, ANALYST, WILLIAM BLAIR & COMPANY: Warren, just one last question on ROI, if I could. When you look at the ROI of this acquisition, say, for some other prospective [F&A] opportunities in this space or something that you've passed on, how does this compare? I guess I'm trying to get a sense of the order of magnitude difference. And last, can you remind us, did you give us the same ROI metric when you did the JAMDAT deal almost two years ago? Thanks.

WARREN JENSON: Yes, we did, as to the JAMDAT. And it was roughly in -- I'd say it was in the same range, if I remember correctly, from our call. The second thing is I think you're going to see different ROIs depending upon different companies. Some can be higher and some can be lower. So I don't think there is directly a -- you can point to one deal versus another, per se.

The second thing that I would point is it doesn't rule out other opportunities. So we believe this was an important part of an ongoing strategy to grow and build this business. This was an opportunity that presented itself now and we took advantage of it. Into the future, we'll continue to look at other opportunities as well.

RALPH SCHACKART: Great. Thanks, Warren.

WARREN JENSON: Thank you. I might add, just in closing, if you all would like to take a look at our website, we do have profiles of each of these businesses on our website, hopefully to help you. Of course, we will be posting the script following this call.

Thanks, everyone, for joining us, and we look forward to talking.

OPERATOR: That does conclude today's conference. Thank you for your participation.

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