What's up with EA's SEC Filings?

Editor's Notes

• #3: I guess it is one of the advantages of being an academic. I get to pay attention to those horribly boring and tedious things that no one in their right mind would really want to spend that much time paying attention to. But for some reason I got wired at an early age to try and figure out why things work the way they do. I blame videogames. SEC filings for me are kind of analogous to debugging software code, or figuring out how a game works, but I guess, instead I'm trying to debug corporations. Don't we wish there were other people attempting to debug more corporations?
• #4: In this talk I’m going to go through several “risk factors” that were mentioned in this filing and conclude with why we should all care about the fact that they mentioned these. So, back in November of last year, while I was perusing Electronic Arts Security and Exchange 10-Q filing (I was avoiding writing my dissertation you know, cleaning cat litter moves above the list of things to do when you're working on your dissertation, so reading SEC filings is certainly above kitty litter) I noticed something very peculiar. And I'm going to bore you for at least a minute but its only a minute compared to how much time I spent pouring over these. I'll paraphrase where necessary so there isn't any snoring. Snoring is bad in a presentation this short.
• #5: I’m going to capitulate here for a second, just so there isn’t any mistaking my stake in this. I love videogame development, a lot of my friends are game developers, and I have a serious stake in this industry. But, if any group of people are OK with tough love, its game developers.
• #6: \"If patent claims continue to be asserted against us, we may be unable to sustain our current business models or profits, or we may be precluded from pursuing new business opportunities in the future.\" I thought the patent system was designed to protect the inventors of new ideas? Why would they have patent claims asserted against them if they're doing their own development. I mean, patents don't apply if you're not using it right? Oh, wait, this is the world of the willy nilly software and device patent that threw the requirements of implementation and commercialization out the window. My bad.
• #7: \"Other intellectual property claims may increase our product costs or require us to cease selling affected products.\" Followed up by, \"From time to time we may become involved in other legal proceedings which could adversely affect us.\" Huh? IP claims, just like those patent claims? Maybe you did steal, that makes sense I guess, but you mean you could just hemorrhage money because people sue you, regardless of the veracity of their claims? And yet despite all this...
• #8: \"Our business, our products and our distribution are subject to increasing regulation of content, consumer privacy, distribution and online hosting and delivery.\" So the very structures designed to make these industries work, like patents, and IP are no longer doing that job, and at the same time new rules and regulations are being past that literally risk the business?
• #9: Which is of course followed by the ever present threat of piracy, which they don't mention is extremely limited on console systems compared to personal computers: \"Our products are subject to the threat of piracy by a variety of organizations and individuals. If we are not successful in combating and preventing piracy, our sales and profitability could be harmed significantly.\"
• #10: I guess what bothers me about all of this is that at some point, at least according to EA, simply being in the videogame industry became a risk. I can take pot-shots at game companies all day for all sorts of things, but the fact that the very structures that were originally designed to help industries like videogame development and New Media more generally have become liabilities. And this is where it comes back to haunt us all right? That there are these elements of creative collaborative practice that unite all New Media industries. These intensely interdisciplinary and collaborative environments require a different set of circumstance within which to thrive. One that we have yet to demand from our policy makers.
• #11: Atari president Phil Harrison has revealed his belief that the process of game development needs to change, in order to make it a less risky experience overall, and one that will help to promote innovative and creative ideas. This coming from someone who made their career out of creating the current situation. Of course now that he’s at Atari it becomes blatantly obvious that this is a problem.