JUNE 18, 2007 • In an effort to streamline decision making, speed new ideas to market, and better manage its global business, Electronic Arts announced that it would restructure its operations into four new groups. EA Games – Under label president Frank Gibeau, the group includes the Battlefield, Burnout, Command & Conquer, Medal of Honor, Need for Speed, and SPORE franchises plus the EA Partners publishing business. EA Sports – With the franchise line-up already well established, executive vice president Joel Linzner will oversee this group until a label president is announced. The Sims – Under label president Nancy Smith, this group will see upcoming releases including MySims for the Wii and Nintendo DS, SimCity Societies, and The Sims Castaway Stories. EA Casual Entertainment – under label president Kathy Vrabeck, this group will focus on lighter, more accessible games, and include the Harry Potter franchise, Pogo.com and EA Mobile. A central development services group will be also be formed to provide company-wide technology support; as well as a global publishing group to maximize strategic planning, field marketing, sale and distribution support.

Impact: Many of Electronic Arts’ performance metrics seem to have flat lined.  There must be concern that the company has grown into a bloated behemoth.  New CEO John Riccitiello clearly has his hands full and some major changes can be expected.  EA’s big challenge is to supplement its safe franchises and boost the level of successful new IP coming out of its development teams. However, from an operations standpoint, the new restructuring may provide less innovation than needed and appears mainly cosmetic.  Its main achievement may be to highlight to investors that EA is already a leader in such hot buzz areas as virtual worlds (The Sims) and casual games.