bumidan on 20 August 2008
For the PS3 and Wii, because there is an online component to the games, EA estimates a time to defer revenue.
So let's take Madden for example - a big release.
Sony sell $100 million
Their non-GAAP revenue will be $100 million - this is the actual "sales" of the game for PS3.
The GAAP revenue will be LESS THAN $100 million - because EA has to allocate a time frame (as per SEC and GAAP) to defer revenue.
Think of it this way:
$60 for a PS3 game
EA has to allocate for GAAP purposes (example):
$30 for the game sale (for example)
$30 for the "service" sale or the online component - Over a period of time
Usually as per EA's implication, 6 months on average
