United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Patrick Söderlund. Compl. ¶1. Robert Moore; PresidentofEALabels FrankD. Financial Officer andExecutiveVice PresidentBlak Chairman and,during partof theclass period, of itsofficersandexecutives leave toamend. Complaint. Forthereasonssetforth below,th ELECTRONIC ARTS,INC.,etal., v. Similarly Situated, Individually andonBehalfofAllOthers RYAN KELLYandLOUISMASTRO, Action Complaint (“Complaint” or“Compl.”), whichfo Case3:13-cv-05837-SI Document45Filed10/20/14Page1of14 2 1 This isasecuritiesfraud classactionagainstdefendant ElectronicArts,Inc.(“EA”) andcertain Now beforetheCourtisdefendants’motion to Thefollowingbackground factsaretakenfrom Theindividualdefendants are:ChiefEx Defendants. Plaintiffs, FOR THENORTHERNDISTRICTOFCALIFORNIA IN THEUNITEDSTATESDISTRICTCOURT 2 underSections10(b)and20(a)of BACKGROUND / e CourtGRANTSdefendants’motion todismiss, with Gibeau; and ExecutiveVicePresident ofEAStudios Executive Chairman Lawrence F.ProbstIII;Chief ecutive OfficerandDirector AndrewWilson; COMPLAINT WITHLEAVETOAMEND CONSOLIDATED CLASSACTION MOTION TODISMISS ORDER No. C13-05837SI e J. Jorgensen; Chief Operating Officer Peter e J.Jorgensen; ChiefOperatingOfficer r purposesofthismotion, must betakenastrue. dismiss plaintiffs’ Consolidated ClassAction dismiss plaintiffs’Consolidated the allegations in the Consolidated Class the in the allegations 1

GRANTING DEFENDANTS’ the SecuritiesExchangeActof1934

PLAINTIFFS’ United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Accordingly, theCourttakes judicialnoticeofEx.PP. re NukoInfo.Sys.,Inc. Sec.Litig EA’s I. December 5,2013(“classperiod”). ofallpe bring suitonbehalf and correspondingSECRule10b-5.Compl. ¶¶1,157. the court may court takejudicialnoticeofpublicreco the CEO acknowledgedthat“ and Live founding, EAhasreleasedadiverseportfo third-largestgami world’s the currently to 15U.S.C.§78u-4(a)). A (interviewwithDefendantPatrickSöderlund), a For thesame reason,the Courtalsotakesjudicialno Plaintiffs’ OppositiontoDefendants’ total revenueinfiscalyear2012. versionofBF4, Compl. ¶¶34-36.Theprior ¶ 29.DICEdeveloped November 2013.Compl. ¶¶12-13,82. 4. a “slateofgames” availableonnext-generationgaming consoles. 29, 33-34.Duringtheclassperiod,EAplannedtore consoles. ofBF4availableforbothexistingandnext-generationgamingFrostbite 3underliestheversions Battlefield 4 Battlefield , and Case3:13-cv-05837-SI Document45Filed10/20/14Page2of14 EA isamultinational developer,marketer, anddistributorof videogames. 4 3 EA owns and operatesseveralvideogameEA ownsand EA expectedBF4togenerateasignificantportionofEA’stotalrevenuein2013and2014. Plaintiffs objecttoEx.PP(excerptsof EA’s Plaintiffsdonotobjecttojudicialnotice Battlefield Id. ¶78;Defendants' RJN,Ex.A. Battlefield 4 aretwoofEA’s“blockbuster”andmost “l (“BF4”), oneofthevideo games central tothisaction,launchedinOctoberand (“BF4”), . Id. Battlefield 4 ¶¶28-29;Defendants’RequestforJ

(“BF4”) FIFA rsons whopurchasedEAcommon stockbetweenMay8,2013and See and using atechnologyplatform knownasFrostbite3. Id. ., 199F.R.D.338,341 (N.D.Cal.2000)(citationomitted). RJNat2.Accordingly,theCour Defendants' RJN,Ex. ¶at6. Battlefield ¶¶1,19. ng company afterNintendoandActivision. lio ofsuccessfulvideogames, including Battlefield 3 rds outside the pleadings, including SEC filings.” rds outsidethepleadings, includingSECfilings.” are vitallyimportant to[EA].” Compl 2 nd Ex.VV(LeadPlaintiffs' certifications pursuant development studios,includingDICEstudios. tice ofEx.C(transcript of Ex.F(transcriptEA’searningscall). lease approximately twenty-sixgames, including SECForm 10-K).“In Lead plaintiffsRyanKellyandLouisMastro ucrative” videogame franchises.Compl. ¶¶ , accountedforapproximately 11%ofEA’s udicial Notice(“RJN”),Ex.Fat6. 4 OnJanuary30,2013,EA’sformer Id. ¶ 73;Defendants’RJN,Ex.Cat t takesjudicialnoticeofEx.F. a securitiesfraud action, EA’searningscall),Ex. FIFA Id. , Madden Id. ¶28.EA is Id. . ¶¶33,35. Sinceits ¶¶29,78. 3

, FIFA NBA See Id. In United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 when we’veconsidered[delaying thegame’s releas sides needtoadaptandyou endupbeinglate.” beenst gaming We’ve consoles]. ¶ 79.Bachexplainedthatitwasdifficultto“devel next-generation gaming consoleswhichwerenotfina BF4 was“areallycomplicated” game developedacrossfiveseparateplatforms, includingtwo development. InanOctober 17,2013interview, for “. that On July23,2013,defendantMooreconfirmed similarly “garneredthebiggestreaction”at next-generationgamingMicrosoft’s XboxOne cons market.” stock the EA’s valuationin live demonstration ofBF4andcharacterizedas video gaming conferences. BF4’sLaunch II. console-transition failures. launch BF4withoutsignificantproblems inlightof consoles became available. next-generation gaming consoles,SonyPlayStati consoles. [EA] in[fiscalyear]2014.” and consoles catalysts thatincludenext-gen Similarly, aJanuary2013reportnoted Battlefield 4 Case3:13-cv-05837-SI Document45Filed10/20/14Page3of14 Beginning inFall2013,EAemployees discussedsomeBeginning ofthechallengesfacingBF4’s Before itsofficiallaunch,BF4receivedpositiv Key toBF4's importance wasitsroleinfacilita Id. ¶60.OnMay21,2013,EAconfirmed thatBF4wouldbeavailableontwo . .” Id. ¶¶ 70-71. Id. Id. Id. Id. ¶¶55-57.Forexample, onMarch ¶¶40,58,60. ¶36. ¶66.However,EAinvestorswereskepticalaboutEA’sabilityto ruggling quitealottokeepupwiththechanges we’ve seen–both that “[w]ithaportfolioofst Id. ¶56.InJune2013,EA’slivedemonstration ofBF4on the event and received twenty-one awards. twenty-one the eventandreceived Battlefield 4 Id. BF4 ExecutiveProducerPatrickBachexplained that 3 on 4andMicrosoft XboxOne,assoonthose op agame atthesame time asthe[next-generation e] –luckilywe’veovercome thosehurdles...” ¶80.Bachalsoadmitted that“..therearetimes ole attheElectronicEntertainment Expo(“E3”) “so important thatitcouldmake adifferencefor EA’s history of “disastrous” game-launch and EA’shistoryof“disastrous” lized for themajority of BF4’sdevelopment. . weareactuallyseeingstrongpreorders[sic] ting EA’stransitiontonext-generationgaming e reviewsduringEA’slivedemonstrations at , weanticipatestrongprofitablegrowthfor 26, 2013,onereviewer“lauded”EA’s rong franchisesandkeyupcoming Id. ¶¶68,70. Id. Id. United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Id. Xbox Onenext-generationgaming consoleonNovember 22,2013( next-generation gaming consoleonNovember 15,2013( gaming consolesonOctober29,2013( by squeezingoutthemaximum capacity”ofthenext-generationgaming consoles. Id. code forBF4thatmade BF4more likelytocrasha 20, 2013,anotherBF4game developerst suggested thatDICEmight nottest EVERYTHING wereallydo...” very endoftheprojectwhichputsanenormous st 2013 email, theDICEdeveloperexplainedthatEA“al Id. Bach furthernotedthatEAhadbe and whichweremade “immediately thereafter.” freezing/crashing ismaking th performance onexistingconsoles,statingthat Battlefield 4 96. OnDecember 4,2013,areporterstatedthathe complained that“Ican’tplayatall”andnoted“[ and November 22,2013,customers described multiple defects. a “game-crashing” error. who hadearlyaccesstothenext-generationversion ¶¶90-92.OnOctober29,2013or ¶¶78(a),114-16.HealsonotedthatEAwantedto ¶81. Case3:13-cv-05837-SI Document45Filed10/20/14Page4of14 EA officially launched BF4 in a seriesofth a EA officiallylaunchedBF4in BF4’s launchwasmet by“adelugeofcustomer A DICEdeveloperwhoworkedon 5 Thecomplaint doesnotidentifywhich customer comments were made onOctober29,2013 were asurprisetoEAandDICE.” Id. [BF4]unplayable.” ¶ 93.Similarly, afterthenext-generationlaunchesonNovember 15,2013 ta-tested BF4onexistingconsoles BF4aftereveryprogramming update. Id. “immediately thereafter,” Healsoindicatedthattes ated thatFrostbite3hadbeen Id. BF4 echoedBach’ssentiments. ¶¶12,82);(2)BF4launchedonSony’sPlayStation4 Id. nd suffertiming risksincomparison topriorversions. l]ots ofcrasheswhentryingtoloadthegame.” Id. Id. 4 ¶109. rain on QA to test everything..[butwe]dotest rain onQAtotest e “[g]ame won’tevenstart”and“[t]herandom “[g]ame e “usethe[next-generationgaming consoles]better of BF4,publishedareviewinwhichhedescribed ¶¶91-92. ¶91.OnOctober30,2013,onegame reviewer, ree rollouts:(1)BF4launchedonthreeexisting found it “hard to believe that the issues facing issues the that found it“hardtobelieve ways wantsmore andmore inthegame untilthe Id. complaints regardinggame-breaking issues.” ¶13);and(3)BF4launchedonMicrosoft’s Id. 5 ting fordefectstookalongtime and customers complained aboutBF4’s ¶¶96-98.Forinstance,customers and thatthefeedbackwas“huge.” Id. used todevelophigh-riskgame ¶ 13). Id. Id. Inaddition,onDecember ¶94.InaNovember 6, Id. ¶ 114.

Id. ¶ United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 interview wasnotallegedinthecomplaint, asitpost-datesthecomplaint bytwomonths. admitting thatBF4wasbuiltonan“unfinished platform” ( Wilson PurportedMisstatements III. BF4’s defectsasofthatday. On December 10,2013,DICEpublicallyreleasedits“ future projectsuntilithadfixedBF4’sdefect Memorandum at8. Probst andSöderlund. Case3:13-cv-05837-SI Document45Filed10/20/14Page5of14 7 sending ourace, team Our the successofourfiscalyear. season forPeterMoore’sbelovedBostonRed EPS. Similar totheWorld Series,wheretheremaining game ortwowilldetermine the “Q3 representsmore than40%ofourto (4) DuringanOctober29,2013earningsconfer tools thatwork..itmakes forefficientandlow-riskdevelopment.” Frostbite hasbeenthecoredifference. .I possible. Thatwasthekeylearning. Ignite] andinvestedearly..[W]e want and question aboutFrostbitebystating:“We createdtwotechnologypaths[Frostbite Gibeaurespondedtoa (3) InaninterviewpublishedonJuly23,2013,defendant mismanaged thetechnology. That’snothappeningthistime around.” standpoint ofpickingthewrongplatforms, derisk thetechnologyenginecomponent of startedearlyonIgniteandFrostbite3, have we transition], andforthiscycle, about EA’spriorgaming consoletransitionsbyst (2) DuringaJune12,2013investorbreakfast transition haslargelybeende-risked.” year hasreallyputusina of ourdevelopment. .[O]urinvestment inFrostbiteandEASPORTSoverthelast “. .incomparison tolasttransition,we’re Gibeau respondedtoaquestionaboutEA’s (1) DuringaMay7,2013earningsconferencecallwith analystsandinvestors,defendant 8 7 6 The complaint allegesthatduringtheclasspe In response,onDecember 4,2013,EAannouncedth made thefollowingeight Defendants incorrectly refer to nine purported misstatements. Defendantsincorrectly refertoninepurportedmisstatements. Plaintiffs areinconsistentastowhether th Wilson’s statements Defendant from aJune2014interview TheCourtwillnotconsider Compare Battlefield 4 Id. ¶¶112-13. Plaintiffs’Oppositionat 1n.1 position wherethetechnologyside 8 materially falseormisleading statements aboutBF4:

, tothemound.” 6 s, whichtookapproximately threemonths.

When youhaveaproventechnologybasewith Id. tal non-GAAPrevenue,and98%ofourannual ed tode-riskthetechnologypieceasmuch as is battle-testedandready,today,weare ¶62. 5 in amuch betterstateasacompany interms prior gaming consoletransitionsbystating: ey assertaSection10(b) I think we didagoodjobtherebutwe’ve we I think was notgoingtorepeatthatmistake. . , defendantMoorerespondedtoaquestion riod, DefendantsGibeau,Jorgensen,Moore,and Sox, thenextfewmonths willdetermine making the transition. Sofrom the transition. making the Id. Battlefield 4 ence call, defendantJorgensenstated: ence call, ¶¶82-83. See ating: “..wel at DICEwouldceasedevelopment onany Plaintiffs’ Oppositionat10)becausethis with Top IssuesTracker,”whichlisted Complaint ¶¶1,154. or theenginesideofthis earned from [thelast See claim againstdefendants Id. Id. Defendants’ Opening ¶¶73-74. ¶69. Id. ¶¶106,119. United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Defendants’ RJN,Ex.VV. Afte plaintiffs made theirfinalEAstockpurchase period highof$27.99pershareonSeptember 4,2013. levels, reachingaclass prices. false impression thatEA’sdevelopment teams werethinkingaboutfutureinnovations. Id. on existingplatforms and waspreparedtolaunchBF thefalseimpression thatEAhadsuccessfullylaunchedBF4 created the October29,2013statements caused pastbotchedgame launchesandconsoletransitions.” games forthenext-generationgaming consoles,EA “perpetuat[ed] themisleading impression that ¶90.Inaddition,plaintiffsclaim thattheD Case3:13-cv-05837-SI Document45Filed10/20/14Page6of14 generation farstrongerthanwe’vedonebefore...” outofthisCompany. . come I’ve everseen the endresultis,wehavealaunchslateof worked more closely withbothMicrosoft this transition,Iwouldsaywestartedwork in ourdesiretoensurewedidn’thavethat vision forthefuturebystating:“..coming responded toaquestionabouttheimpact of (5) Duringthesame October29,2013earningsconferencecall,defendantWilson Defendants allegedlymade thesestatements inorde The complaint allegesthattheMay7,2013,June12,andJuly 23, 2013statements think aboutinvestment innewinnovation forthefuture.” of qualityatlaunchthatwedidn’tgettola and Wilson respondedtoaquestionabouttheim atechnologyconference,defendant at (8) DuringaDecember 3,2013presentation platform generation,particularlyaswellwehaveexecuted.” above wherewe were lasttime. .[W]e as Italkedaboutearlier,thinkthatourla generation, it’sthecombination oftwothings. upcoming EAgames ofaconsole bystating:“[W]hen youlookatthesuccess abouttheimpact ofnext-generationgaming consoleson responded toaquestion (7) Duringthesame October29,2013earningsconferencecall,defendantWilson going tonailit.” as wehavesaidonpreviousearningcalls, publishers intheindustryhavegettingourqualitytitlesreadyfornextgen.We feel, EA games likeBF4bystating:“We’ve nothadsome oftheproblems some ofourfellow responded toaquestionaboutthesignificance call,defendantMoore conference (6) Duringthesame October29,2013earnings Id. ¶14.Thepurportedmisstatements allegedlycau Battlefield bystating:“SothegoodnewsnowisI Id. ¶¶82,85. r EAlaunchedBF4onthe twonext during theallegedclassperiod onOctober16,2013. , inpreparationforthedevelopment of ecember 3,2013statement allegedlygave investorsthe unch softwarethistime isheadandshoulders we’re wellaheadofthistransition,and kindofchallengeagain.Soasweapproach st time, andourteams arealreadystartingto and Sonythroughouttheentireprocess, games thatarethebesttransitiongames that 6 earlier thanweeverhaddonebefore,and 4 successfullyonnext-generationgaming consoles. next-generationgaming consolesonEA’s are certainlybullishaswe come intothis had‘de-risked’thetechnologyproblems thathad out ofthelasttransition,wewereresolute pact ofnext-generationsoftwareon . Ithinkwearestartingthisconsole Greatconsolesandgreatsoftware.And of next-generationgaming consolesfor r toselltheirEAstockatartificially inflated sed EA’sstocktotradeatartificiallyhigh Id. think thatwehavereachedalevel Id. ¶3.Thecomplaint further allegesthat ¶¶82,84. Id. -generation gaming consoles,EA’s ¶ 103. Id. ¶¶82,86. Id.¶¶ Battlefield 4 14, 137 Id. FIFA ¶ 3. . Lead and See United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 16. ByorderdatedJanuary22,2014,theCourtconso 550 U.S.544,570(2007). This“facialplausibility”sta allege “enoughfactstostate aclaim to FederalRuleofCivilProcedure 12(b)(6) I. No. 16. designated RyanKellyandLouisMastroaslead Electronic Arts, Inc. Sec. Litig. Electronic Arts,Inc. Procedural Background IV. to avoidcompetition.” DICE developerstatedthat“..EA[]want Duty: Ghosts article’s authorstated,“IsuspectthatEAdi for theholidayseason. beat Activision’s stock soldbetweenJanuary1,2008andDecember 5,2013.Compl. ¶125. class periodstocksalesrepresented74%,85%, available sharesduringtheclassperiod. sold 816,959sharesforatotalof$19,867,347. ¶¶95,102,142.Duringtheclassperiod,de Compl. to$21.01pershareonDecembe dropped price stock Case3:13-cv-05837-SI Document45Filed10/20/14Page7of14 To surviveamotion todismiss underFederalRule Presently beforetheCourtisdefendants’motion todismiss theComplaint. In late2013andearly2014,plaintiffs in In addition,defendantsallegedlymi by delayingthegame. ..” Call ofDuty , No.13-05837,and Id. Id. ¶94. ¶¶7,63,71-72,79-80,94.InaDecember 4,2013 to market, andlaunchwiththenext-generationgaming consolesintime , No.13-05837.

LEGAL STANDARD relief thatisplausibleon itsface.” Mastro v.ElectronicArts,Inc. See srepresented factsaboutBF4inordertodrivepre-sales, Id. s ustorelease2weeksbefore[Activision’s dn’t wanttohandvictoryoverActivisionand Defendants’ RJNat4.Individually,thesedefendants’ ¶ 108.Inaddition,aNove Id. plaintiffs andappointed See ¶123.Asagroup,defendantsretained77%oftheir 7 stituted twoactionsagainstDefendants: and 41%,respectively,oftheirtotalindividualEA fendants Wilson, Moore,Gibeau,andSöderlund r 5,2013,thusremoving theartificialinflation. Dkt. No.13.OnFebruary25,2014,theCourt lidated theseactionsintothepresentcase, ndard requirestheplaintiff toallegefactsthat ofCivilProcedure12(b)(6), aplaintiffmust

, No.14-00188. leadclasscounsel. BellAtl.Corp.v.Twombly mber 6,2013email from a Forbes Forbes Call ofDuty See article, the Kellyv. Dkt. No. See Call of In re Dkt. ] , United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Litig. LLC v. Scientific-Atlanta, Inc. economic loss; and(6)losscausation. misrepresentation (5) oromission; between themisrepresentation oromission andthepur elements: (1)amaterial misrepresentation oromission bythedefendant; (2)scienter;(3)aconnection C.F.R. §240.10b-5. ofmaterial factnecessaryinordertomake statement thestatements made notmisleading.untrue 17 . .”15U.S.C.§78j(b).SECRule10b-5implemen contrivance incontraventionofsuchrulesandregul connection withthepurchaseorsaleofanysecurity.manipulative ordeceptivedevice TheSecuritiesExchangeActof1934 II. quotation marks omitted). the allegationofotherfacts.” to amend thepleadingwasmade, unlessitdetermines thatthepleadingcouldnotpossiblybecured by Ninth Circuithas“repeatedlyheldthatadistrict 2008). of fact,orunreasonableinferences.” court isnotrequiredtoacceptastrue“allegations plaintiff's favor. must assume thattheplaintiff’s allegationsaretr speculative level.” U.S. 662,678(2009).Aplaintiffmust allegefacts add upto“more thanasheerpossibility , No.11-17708,___F.3d ___,2014WL 4922264,at*4(9thCir.Oct.2,2014). Case3:13-cv-05837-SI Document45Filed10/20/14Page8of14 A plaintiffassertingaclaim underSection10(b) Section 10(b)oftheSecuritiesExchangeAct dismisses acomplaint, court itmustIf the then a In decidingwhetheraplaintiffhasstated See Usherv.CityofLosAngeles Twombly , 550U.S.at555. Lopez v.Smith , 552U.S.148,157(2008) (citationomitted); In re Gilead Sciences Sec. Litig. that adefendant hasactedunlawfully.” , 203F.3d1122,1130(9thCir.2000)(citationsandinternal court shouldgrantleavetoamend evenifnorequest that aremerely conclusory,unwarranteddeductions 8 ue and must draw all reasonableinferencesinthe all ue andmust draw , 828F.2d556,561(9thCir.1987).However,the ts Section10(b)bymaking itunlawfultomake any claim uponwhichreliefcanbegranted,theCourt claim ations asthe[SEC]may prescribeasnecessary.. chase orsaleofasecu sufficient to “raisearighttoreliefabovethe to sufficient 1934declaresitunlawfulto“useoremploy, in decidewhethertograntleaveamend. The or Rule 10b-5 must adequatelyallegesix orRule10b-5must , 536F.3d1049,1055(9thCir. Stoneridge Inv.Partners, InreNVIDIACorp.Sec. rity; (4)relianceuponthe Ashcroft v.Iqbal , 556 United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 10(b) claim, includinglosscausation. 10b-5 claim because thestatements couldnothavea Statements issuedafteraplaintiff’spurchaseofst of lawbecausedefendantsmade thesestatements afte InactionableStatements I. violation underSection10(b)orRule10b-5. claim, defendantsmove todismiss onthegroundthatth complaint pleadwithparticularitybothfalsity andscienter. the complaint fails topleadwithparticularitybothfalsity andscienter. complaint failstoadequatelyallege anyactionabl Cir. 2002). violation ofSection 15 U.S.C.§78t(a).ToestablishliabilityunderS 411 F.3dat1015. statements either intentionallyorwithdelib factsgivingrisetoastronginferencethatthedefendantmade falseormisleading particularity 411 F.3d1006,1014(9thCir.2005)(citationomitted). As that is misleading, andallfactsonwhich particularity eachstatement allegedtohavebeen 552 F.3d981,990-91(9thCir.2009)(citationomitted). Case3:13-cv-05837-SI Document45Filed10/20/14Page9of14 The PrivateSecuritiesLitigationReform Act 9 Post-PurchaseStatements Defendants contendthatfiveof A. Defendants move todismiss plai Section 20(a)oftheSecuritiesExchangeAc Defendantsdonotcontest plaintiffs’allegations 10(b) orRule10b-5.

theeightpurportedmisstatements areinactionableasa matter ntiffs’ Section10(b)andRule Lipton v.PathogenesisCorp. belief isformed.belief 15U.S.C.§78u-4(b)(1); erate recklessness.15U.S.C.§78u-4(b)(2); DISCUSSION e misstatements. Inaddition,defendantscontend that misleading, thereasonorreasonswhystatement ock cannotform thebasis ofaSection10(b)orRule 9 ection 20(a),aplaintiffmust firstproveaprimary r leadplaintiffspurchasedtheirEAcommon stock. t of 1934 imposes liability on “control persons.” t of1934imposes liabilityon“control ffected theplaintiff’sd of 1995(“PSLRA”)requiresthataSection10(b) e complaint failstoadequatelyallegeaprimary regardingcertainotherelements ofaSection As tofalsity,thecomplaint must statewith ZuccoPartners,LLCv.DigimarcCorp. to scienter, thecomplaint must scienter, state with to 10b-5 claim onthebasisthat 9 , 284F.3d1027,1035n.15(9th Astoplaintiffs’Section20(a) ecision topurchasestock. In reDaouSys. In reDaou

Sys. , , , United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 2013. Asamatter oflaw,“conductactionableunderRu 29,2013andDecember 3,2013statementsOctober if misstatements. issuehereiswhet Therefore,the EA In contrast,heretheleadplaintiffspurchased lead plaintiff’spre-disclosurestockpurchase who soldstockbeforethedisclosureoftruthful to allclassmembers atthepleadingstage. purchase ofstockbeforesome, butnotall,ofth on thislineofreasoningtoarguethatifleadplain the contextofclasscertificationunderFe satisfied [foraleadplaintiff],any in facthasestablishedstandingforpurposesof but notall,claimed injuriesoftheclass.AsC action establishedArticleIIIstandingeventhoughhe nevertheless actionable.In Litigation and December 3,2013statements, but because theypost-dateleadplaintiffs’purchaseofEAstock. misstatements made onOctober 29,2013andDecem October 29,2013andDecember 3,2013.Compl. ¶82-86,103.Accordingly,thefivepurported RJN, Ex.VV.However,defendantsmade misstatements fiveof thepurported severaldayslateron decision tobuyonthatdate.”)(citationomitted). [the after issued was because it neednotdetermine“[w]e whether thisstatement ismisleading [underSection10(b)orRule10b-5] Hanon v.Dataproducts Case3:13-cv-05837-SI Document45Filed10/20/14Page10of14 Plaintiffs concede that lead plaintiffs made their final stock purchase before theOctober29,2013 before purchase stock final their made plaintiffs lead that Plaintiffs concede Plaintiffs’ relianceon Here, leadplaintiffsmade theirfi , 542F.Supp.2d996(N.D.Cal.2008),toarguethatthepost-purchasestatements are

Corp. In reConnetics , 976F.2d497,501(9thCir.1992)(findingonsummary judgment that In reConnetics plaintiff] boughthisstockandthus additional questionsrelatedtoparticularinjuriesarerelevantonlyin rely onthisCourt’sdecisionin nal EAstockpurchaseonOctober16,2013. deral RuleofCivilProcedure23.” , thisCourtfoundthataleadpl gave risetoanArticleIIIinjury-in-fact. is misplaced. e purportedmisstatements, thentheyhavestandingas information. Accordingly,theissuewaswhether ourt explained,“..aleadplaintiffwithsome injuries Article III; once the general standing requirement is Article III;oncethegeneralstanding 10 her leadplaintiffscould havereliedondefendants’ tiffs havestandingtoassertaclaim basedontheir stock before defendantsissuedfiveofthealleged stock established individualstandingonlyastosome, ber 3,2013areinactionableasamatter of law they purchased their EA stock on October 16, they purchasedtheirEA stockonOctober le 10b-5must occurbeforeinvestorspurchase In reConnetics See Hanon InreConneticsCorp.Securities could nothaveaffected..his aintiff inaSection10(b)class , 976F.2dat501. Id. involved aleadplaintiff at 1004.Plaintiffsrely Id. See at1002-1004. Defendants’ United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 concerned aboutEA’s priorhistory argue thatdefendants’statements toutingBF4we that EAwas“battle-tested”andreadytolaunch allegedly createdthefalseimpression thatEA they weremade. Plaintiffscontendthatwhenvi 49 F.3d1363,1375(9thCir.1994)(citationsomitted). seriously tending aware ofundisclosedfacts speakeris statement isnotactuallybelieved;(2)therenoreasonablebasisforthebelief;or(3) of optimism orstatement ofbelief Propane Partners,L.P. are inactionableasamatter oflaw. reliance astothefivepurportedmisstatements that for eachclaim heseekstopress.”)(citationomitted). DaimlerChrysler Corp.v.Cuno the securities.” and December 3, 2013. grants Plaintiffs' requesttosubstitutenewlead state actionablematerialof misstatements generalized, andunspecificassertions’ofcorporat law becausetheyconstitutevagueexpressionsof plaintiffs. leave toamend toallegestatements made before l purported misstatements made onOctober29,2013a Case3:13-cv-05837-SI Document45Filed10/20/14Page11of14 Plaintiffs arguethatthepurportedmisstatements Accordingly, the Court DISMISSES plaintiffs’ S Accordingly, theCourtDISMISSESplaintiffs’ 10 StatementsofOpinion,CorporateOptimism,and Puffery Defendants alsocontendthatallofthepurporte B. BecausetheCourtfinds that Binder v.Gillespie , 355F.Supp.2d1069,1087(N.D.Cal.2005) , 547U.S.332,352(2006)(“..[a]pl is a“factual”misstatement actiona of “disastrous”game-launch andc 10

, 184F.3d1059,1066(9thCir. See Binder five ofthepost-purchase statements areinactionable,theCourt factunderfederalsecuritieslaws.” toundermine thestatement's accuracy. had “de-risked”theunderlyingtechnologyofBF4 and plaintiffs whopurchased stockafterOctober29,2013 ewed incontext,defendants’purportedmisstatements ead plaintiffs’ stockpurchaseortosubstitutenewlead , 184F.3dat1059,1066. BF4 onnext-generationgaming consoles.Plaintiffs opinion, corporateoptimism, orpuffery.“‘[V]ague, 11 post-date theirEAstockpurchase,thosestatements e optimism of‘mere orstatements puffing’cannot re particularlymisleading becauseinvestorswere BecauseleadplaintiffscannotpleadSection10(b) nd December 3,2013.TheCourtgrantsplaintiffs d misstatements areinactionableasamatter of are actionableinlightof thecontextinwhich ection 10(b)claim totheextentitrelieson onsole-transition failures. Compl. aintiff must demonstrate standing ble underSection10(b)if:(1)the (citationomitted). Aprojection 1999)(citationomitted); In reCornerstone Kaplan v.Rose see , United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 is going to be the best Power Mac ever” inactionable as plausiblyheldopinionandstatement of as is goingtobethebest Power Macever”inactionable re AppleComputer,Inc.Sec. Litig. this Company” isaninactionable opinion,aswell resulting ina“launchslateofgame Microsoft andSony[thenext-generationgaming rely). DefendantWilson’s October29,2013statemen mere pufferyuponwhichno reasonable customer would inactionable asvagueassertionconstituting Brodsky Jorgensen’s October29,2013statement comparing BF4toaWorld Seriesacepitcherispuffery. 2008) (“well-positionedtosucceed”inactionableasvagueassertionofcorporateoptimism). mistake,” arealsoinactionable. tode-risk”Frostbite3andthatEAwas“notgoingrepeat wanted 2013 statement that“we technology platform andthatEAhad“derisk[ed]” reasons, defendantMoore’sJune12,2013statement th were non-actionablepufferythatwouldnotbelikelytomislead areasonableconsumer). Forthesame 527 F.Supp.2d992,998-99(N.D.Cal.2007)(statements assessment of pastresultsuponwhich 1076-77 (N.D.Cal.2001)(statement thatproduct reasonable investorwouldrely. ofcorporateoptimism expression andpufferyuponwhichno de-risked” isanon-actionablevague EA wasina“much betterstate”forthenext-generati statements ofopinion,corporateoptimism, orpuffe questions aboutBF4orthenext-generationconsoletransition. prospects. BF4 andthenext-generationconsoletransitionbecau ¶¶ 40,58,60.Inaddition,plaintiffsassertthatEAinve Case3:13-cv-05837-SI Document45Filed10/20/14Page12of14 The October29,2013andDecember arealsoinactionable.Defendant 3,2013statements The Court agrees with defendants thatallofthepurportedmisstatementsThe Courtagreeswithdefendants areinactionable ,

592 F. Supp. 2d at 1200 (“on the technology front wehittheballoutofpark”held 592 F.Supp.2dat1200(“onthetechnologyfront Id. ¶¶33-36.Plaintiffsfurthernotethatdefendants’statements weremade inresponseto See InreSplashTech.Holdings,Inc.Sec.Litig. Id. , No.03-16614,127F.App’x 296,304(9thCir.2005)(holding“this s thatarethebesttransitiongame ; Brodsky v. Yahoo!Inc. v. Brodsky no reasonableinvestorwouldrely); 12 console developers]throughouttheentireprocess” as avaguestatement ofcorporateoptimism. Frostbite 3,alongwithdefendantGibeau’sJuly23, ry. DefendantGibeau’s on transitionandthatFrostbite3had“largelybeen se BF4was“vitallyimportant” toEA’sfinancial stors paidparticularattentiontostatements about t explainingthatEA“workedmore closelywith at “thistime around”EAdidnotpickthewrong line “improved”line heldinactionableasvague touting “highquality”and“reliable”service , 592F.Supp.2d1192,1200(N.D.Cal. Id. ¶¶62,69,84-86,103. s thatI’veeverseencome outof Stickrath v.Globalstar,Inc. May7,2013statement that , 160F.Supp.2d1059, See In See , United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 allege actionablemisstatements. the future,”arealsoinactionable. statement notingthatEA’steams arealready“star EA “[is]certainlybullishaswecome intothisplat proclaiming thatEA’slaunchsoftware“[is]heada positioned” heldinactionable).Forthesame r 2013 WL 1402788,at*13(N.D.Cal.Mar.29,2013)(sta inactionable statement ofcorporateoptimism. proclaiming that“We feel.we the optimism ofcorporateexecutives...”).Li Litig. (N.D. Cal.2012)(“productportfolioisrobus corporate optimism); Söderlund withleaveto amend. S Accordingly, theCourt DISMISSES plaintiffs’ agrees, totheextentplaintiffs assertaSecti 2013) (liabilityunderRule 10b-5limited toparties made anypurported misstatements. Söderlund ontheadditional groundthat /// allege falsityandscienterforthereasonsarticulatedbydefendants. intentionally orwithdeliberaterecklessness.The plead withparticularitythatdefendantsmade mate FalsityandScienter II. Case3:13-cv-05837-SI Document45Filed10/20/14Page13of14 , 784F.Supp.1471,1481(N.D.Cal.1992) Accordingly, the Court DISMISSES plaintiffs’Section10(b)claims withleavetoamendAccordingly, theCourtDISMISSES to 11 Defendants move todismiss thecomplaint onth Defendantsmove todismiss plaintiffs’S City ofRoyalOakRet.Sys.v.JuniperNetworks,Inc. 11 ’re wellaheadofthistransition,a

Id. See Jacksonv.Fischer

Plaintiffsdonotallegethat t” inactionableascorporateoptimism); on 10(b)claim againstdefendantsProbst andSöderlund. easons, defendantWilson’s October29,2013statement See InreCiscoSys.Inc.Sec.Litig. kewise, defendantMoore’ (“..most amateur investors..knowhowtodevalue form generation..”,aswellhisDecember 3,2013 nd shouldersabovewherewewerelasttime” andthat 13 ting tothinkaboutinvestment innewinnovationfor ection 10(b)claim againstdefendantsProbstand Court agreesthatthecomplaint fails toadequately ection 10(b)claim againstdefendantsProbst and rially falseormisleading statements aboutBF4 who actuallymake misstatements). TheCourt e additionalgroundthatthecomplaint failsto tement thatcompany was“extremely well , 931F.Supp.2d1049, 1060 (N.D.Cal. nd we’regoingtonailit”isalsoan defendantsProbstandSöderlund s October29,2013statement , 880F.Supp.2d1045,1064, , No.C11-1568SBA, In reVeriFoneSec. United States District Court For the Northern District of California 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Dated: October20,2014 Docket Nos.26-27,34-35,and37-38. Exhibits A,C,F,¶,andVVattachedtoDefendants’ November 3,2014 Class ActionComplaint withleavetoamend. Theamended complaint befilednolaterthan must leave toamend toproperlyallegeaprimary violationunderSection10(b)andRule10b-5. primary violationofSection10(b)orRule10b-5. 10b-5. establish liabilityunderSection20(a),aplaintiffmust To on thegroundthatComplaint failstoallegea III. Section 20(a)

Case3:13-cv-05837-SI Document45Filed10/20/14Page14of14 Lipton IT ISSOORDERED. CourtGRANTSdefendants' motiAccordingly, the todismiss move plaintiffs’claimsDefendants For theforegoingreasons,CourtGRANTSdefe , 284F.3d1035n.15.Asdiscussedabove,plai . Additionally,theCourtGRANTSdefenda

CONCLUSION primary violationunderSec 14 RequestforJudicialNotic

UNITED STATESDISTRICTJUDGE SUSAN ILLSTON forcontrolpersonliabilityunderSection20(a) firstproveaviolation ndants’ motion todismiss theConsolidated on todismiss theSection20(a)claim with ntiffs havenotadequatelyallegeda nts’ request for judicial noticeof judicial for nts’ request tion 10(b)orRule10b-5. of Section10(b)orRule e. Thisorderresolves