In Re: Electronic Arts Inc. Securities Litigation 05-CV-01219

1 MILBERG WEISS BERSHAD & SCHULMAN LLP 2 JEFF S. WESTERMAN (SBN 94559) ELIZABETH P. LIN (SBN 174663) 3 KRISTEN MCCULLOCH (SBN 177558) 355 S. Grand Ave., Suite 4170 4 Los Angeles, CA 90071-3172 Telephone: (213) 617-1200 5 Facsimile: (213) 617-1975 -and- 6 MAYA SAXENA (Pro Hac Vice) CHRISTOPHER S. JONES (Pro Hac Vice) 7 5200 Town Center Circle Tower One, Suite 600 8 Boca Raton, FL 33486 Telephone: (561) 361-5000 9 Facsimile: (561) 367-8400

10 COHEN, MILSTEIN, HAUSFELD & TOLL, P.L.L.C. LISA M. MEZZETTI (Pro Hac Vice) 11 DANIEL S. SOMMERS (Pro Hac Vice) 1100 New York Avenue, N.W. 12 Suite 500, West Tower Washington, D.C. 20005 13 Telephone: (202) 408-4600 Facsimile: (202) 408-4699 14 Co-Lead Counsel 15 UNITED STATES DISTRICT COURT 16 NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 17 18 )Case No. 3:05-cv-1219-MMC In re ELECTRONIC ARTS, INC. ) 19 SECURITIES LITIGATION )CONSOLIDATED AMENDED )COMPLAINT FOR VIOLATIONS OF 20 This Document Relates To: All Actions )FEDERAL SECURITIES LAWS ) 21 ) JURY TRIAL DEMANDED 22 23 24 25 26 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC

1 Lead Plaintiffs allege the following based upon the investigation of Plaintiffs’ Counsel, 2 which included (among other things) a review of regulatory filings and reports, securities analyst 3 reports and advisories about Electronic Arts, Inc. (“Electronic Arts,” “EA” or the “Company”), press 4 releases and other public statements issued by the Company, and media reports about the Company. 5 NATURE OF THE ACTION AND SUMMARY OF ALLEGATIONS 6 1. This is a federal class action on behalf of persons or entities who purchased the 7 securities of Electronic Arts between January 26, 2005 through March 21, 2005, inclusive (the 8 “Class Period”), and who were damaged thereby, seeking to pursue remedies under the Securities 9 Exchange Act of 1934 (the “Exchange Act”). 10 2. Electronic Arts is a Redwood City-based developer and marketer of software games 11 usable on several popular platforms, such as PlayStation 2, Xbox and GameCube, among others. 12 3. This complaint alleges that Defendants disseminated knowingly false favorable 13 projections for the Company’s fourth quarter, ending on March 31, 2005, so that the Individual 14 Defendants and other Company insiders could sell their personally-held Electronic Arts stock at 15 artificially inflated prices. The timing of events in this action evidences Defendants’ fraudulent 16 scheme and illegal course of conduct. 17 4. As evidence of this scheme, on January 25, 2005, Defendants issued a press release 18 which included guidance on earnings for the Company’s fiscal year 2005, which would end on 19 March 31, 2005. Although Defendants slightly reduced their earlier guidance, they gave investors 20 highly positive earnings per share estimates, and were extremely bullish for calendar year 2005. In 21 reaction to this announcement, the price of Electronic Arts stock jumped by $5.30 per share in one 22 day. Almost immediately following their good news, on January 28, 2005, and during the next three 23 trading days, Electronic Arts insiders, including the Individual Defendants, dumped a total of 24 926,739 shares of the Company’s common stock for gross proceeds of $58,459,056. 25 5. On March 21, 2005, prior to the open of trading, Electronic Arts announced that its 26 results for the quarter would be materially less than the company had said they would be in the 27 January conference call. In a telephone interview with Bloomberg News, Defendant Jenson, who 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 2 -

1 sold 200,000 shares during the Class Period, attributed the shortfall to poor sales of holiday releases. 2 In reaction to this announcement, the price of Electronic Arts’ common stock plummeted, falling 3 $11.20 per share, or 16.8%, on unusually high trading volume of over 39.5 million shares. 4 6. Unbeknownst to investors, however, from the inception of the Class Period, 5 Defendants knew that the 2004 holiday releases, which had been selling for more than a month, were 6 not meeting expectations and that the quarter’s results would foreseeably be below these projected 7 amounts. Rather than disclose this fact at the time, Defendants waited until insiders unloaded more 8 than $58 million in their personally held EA stock while share prices were inflated by Defendants’ 9 false and misleading positive representations. 10 7. Moreover, rather than disclose the full extent and magnitude of their earnings 11 shortfall, Defendants engaged in a host of undisclosed and improper sales practices used to 12 artificially boost the Company’s bottom line. As analysts at PiperJaffray reported on March 22, 13 2005, Defendants had resorted to “channel stuffing” in December 2004, as an illegal and improper 14 means of loading EA’s distribution channels with inventory far in excess of known market demand, 15 in order to falsely portray Electronic Arts as on track to achieving improving financial results. 16 8. As analysts at PiperJaffray have reported, and as witnesses have now confirmed, in 17 order to artificially boost sales during 3Q:F05, Defendants offered unusual price protections which 18 deviated from their normal price protection policies. For example, although the Company did not 19 offer price protection until a title began to lose popularity and sales, the Company was offering price 20 protection on its newly issued “Madden NFL” title by the end of 3Q:F05. Also related to its unusual 21 grants of price protection, by the inception of the Class Period, Electronic Arts’ sales staff was also 22 forcing retailers to purchase unpopular, slow-moving titles in order to receive the new and more 23 popular games. Yet, by tying the product sales in this manner, Defendants created a significant 24 undisclosed risk in the market, since if any of the “hot” titles failed to sell according to forecast, 25 there would be a glut of Electronic Arts games in the distribution channels. Accordingly, this tie-in 26 exacerbated the ultimate earnings miss. 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 3 -

1 9. Moreover, as a result of the undisclosed sales practices of channel stuffing and 2 product tying, at all times during the Class Period, Defendants knew a significant portion of the 3 excess inventory would have to come back in the form of returns, or additional price protections. In 4 fact, at the end of the Class Period, Defendants were forced to admit that the Company had failed to 5 adequately reserve for price protection granted in 3Q:F05 and that, in the quarter ended March 31, 6 2005, Electronic Arts incurred higher actual returns and price protection and had to increase these 7 reserves materially. The analyst report issued by PiperJaffray on March 22, 2005 reported on the 8 Company’s dismal results, noting “credibility issues creep up on management” and finding that “the 9 Company stuffed the channel in December.”

10 10. Rather than disclose the true operational and financial condition of the Company, the 11 Individual Defendants and other Company insiders quickly cashed out their personally held EA

12 stock, as detailed in the chart below:

13 Electronic Arts Daily Common Stock Price Class Period January 26, 2005 - March 21, 2005 14 $75.00 3/21/05 15 Co. announces revised estimates for FY Ending 3/31/05. CEO: "Results 1/28/05 - 2/2/05 Insiders are clearly disappointing." 16 sell 926,739 shares for $70.00 proceeds of $58.4 million. 17 18 19 $65.00 20

21 $60.00 22

23 $55.00 1/25/05 Co. reports Q3:F04 results. 24 Fiscal Year Expectations - Ending 3/31/05 3/22/05 Net revenue expected to be between $3.27 closing price: $55.15 and $3.32 Billion for FY 2005 25 $50.00 26 25-Jan-05 01-Feb-05 08-Feb-05 15-Feb-05 23-Feb-05 02-Mar-05 09-Mar-05 16-Mar-05 23-Mar-05

27

28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 4 -

1 JURISDICTION AND VENUE 2 11. The claims asserted herein arise under and pursuant to Sections 10(b), 20(a) and 20A 3 of the Exchange Act,15 U.S.C. §§78j(b), 78t(a) and 78t-1, and the regulations promulgated 4 thereunder by the SEC, including Rule 10b-5, 17 C.F.R. §240.10b-5. 5 12. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. 6 §§1331 and 1337, and Section 27 of the Exchange Act. 7 13. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28 8 U.S.C. §1391(b). Many of the acts charged herein occurred in substantial part in this District and 9 Electronic Arts conducts business in this District. 10 14. In connection with the acts alleged in this complaint, Defendants, directly or 11 indirectly, used the means and instrumentalities of interstate commerce, including, but not limited to, 12 the mails, interstate telephone communications and the facilities of the national securities markets. 13 PARTIES 14 15. Plaintiffs Stationary Engineers Local 39 Pension Trust Fund (the “Stationary 15 Engineers Pension Fund”), City Pension Fund for Firefighters and Police Officers in the City of 16 Miami Beach (the “Miami Beach Pension Fund”), Baden-Wuerttembergische 17 Kapitalanlagegesellschaft mbH (“BWK”) and Activest Investmentgesellschaft mbH (“Activest”) 18 were appointed Lead Plaintiffs on June 13, 2005. Lead Plaintiffs purchased Electronic Arts common 19 stock during the Class Period and have been damaged thereby. 20 16. Defendant Electronic Arts is a Delaware corporation headquartered in this District at 21 209 Redwood Shores Parkway, Redwood City, California, 94065-1175. 22 17. Defendant Warren C. Jenson (“Jenson”) has served as Electronic Arts’ Executive 23 Vice President and Chief Financial and Administrative Officer since June of 2002. 24 18. Defendant Lawrence F. Probst III (“Probst”) has served as Electronic Arts’ Chief 25 Executive Officer during the Class Period. 26 19. Defendants Jenson and Probst are referred to herein as the “Individual Defendants.” 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 5 -

1 20. During the Class Period, the Individual Defendants, as senior executive officers 2 and/or directors of Electronic Arts, were privy to confidential and proprietary information 3 concerning Electronic Arts, its operations, finances, financial condition, and present and future 4 business prospects. The Individual Defendants also had access to material adverse non-public 5 information concerning Electronic Arts, as discussed in detail below. Because of their positions with 6 Electronic Arts, the Individual Defendants had access to non-public information about its business, 7 finances, products, markets and present and future business prospects via access to internal corporate 8 documents, conversations and connections with other corporate officers and employees, attendance 9 at management and board of directors meetings and committees thereof and via reports and other 10 information provided to them in connection therewith. Because of their possession of such 11 information, the Individual Defendants knew or recklessly disregarded the fact that adverse facts 12 specified herein had not been disclosed to, and were being concealed from, the investing public. 13 21. Defendants even had access to daily sales data. According to a former contract sales 14 analyst, the Company generated retail level sales and inventory sales reports on a daily, weekly and 15 monthly basis, and also held weekly and monthly forecasting meetings to discuss how actual sales 16 measured up to forecasted numbers. A former director of distribution confirmed that management 17 had up-to-the minute knowledge of the company’s sales, and even pre-orders of games that were not 18 yet released. 19 22. Defendants also maintained an internal sales website from which they could access 20 sales data. According to a former Manager of Financial Planning, the Company used information 21 management systems such as Oracle Financials and Pillar for financial planning, which enabled 22 them to compare forecasted and actual sales results. By Defendant Probst’s own admission during a 23 December 6, 2004 conference call, he closely monitored sales. During the conference call, Probst 24 conceded that “[w]e monitor channel sell-through on a daily basis with all of our key customers and 25 we are very closely monitoring sales on our key sports titles.” Accordingly, Defendants were well 26 aware that the projections announced in January were without basis. 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 6 -

1 23. The Individual Defendants are liable as direct participants in, and as co-conspirators, 2 with respect to the wrongs complained of herein. In addition, the Individual Defendants, by reason 3 of their status as senior executive officers and/or directors were “controlling persons” within the 4 meaning of Section 20 of the Exchange Act and had the power and influence to cause the Company 5 to engage in the unlawful conduct complained of herein. Because of their positions of control, the 6 Individual Defendants were able to and did, directly or indirectly, control the conduct of Electronic 7 Arts’ business. 8 24. The Individual Defendants, because of their positions with the Company, controlled 9 and/or possessed the authority to control the contents of its reports, press releases and presentations 10 to securities analysts and through them, to the investing public. The Individual Defendants were 11 provided with copies of the Company’s reports and press releases alleged herein to be misleading, 12 prior to or shortly after their issuance, and had the ability and opportunity to prevent their issuance or 13 cause them to be corrected. Thus, the Individual Defendants had the opportunity to commit the 14 fraudulent acts alleged herein. 15 25. As senior executive officers and/or directors and as controlling persons of a publicly- 16 traded company whose common stock was, and is, registered with the Securities and Exchange 17 Commission (the “SEC”) pursuant to the Exchange Act, and was traded on the NASDAQ National 18 Market (“NASDAQ”) and governed by the federal securities laws, the Individual Defendants had a 19 duty to disseminate promptly accurate and truthful information with respect to Electronic Arts’ 20 financial condition and performance, growth, operations, financial statements, business, products, 21 markets, management, earnings and present and future business prospects, and/or to correct any 22 previously issued statements that had become materially misleading or untrue, so that the market 23 price of Electronic Arts’ common stock would be based upon truthful and accurate information. The 24 Individual Defendants’ misrepresentations and omissions during the Class Period violated these 25 specific requirements and obligations. 26 26. The Individual Defendants are liable as participants in a fraudulent scheme and 27 course of conduct that operated as a fraud or deceit on purchasers of Electronic Arts’ securities by 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 7 -

1 disseminating materially false and misleading statements and/or concealing material adverse facts. 2 The scheme (i) deceived the investing public regarding Electronic Arts’ business, operations and 3 management and the intrinsic value of Electronic Arts’ securities and (ii) caused Lead Plaintiffs and 4 members of the Class to purchase Electronic Arts common stock at artificially-inflated prices. 5 LEAD PLAINTIFFS’ CLASS ACTION ALLEGATIONS 6 27. Lead Plaintiffs bring this action as a class action pursuant to Federal Rule of Civil 7 Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all persons or entities who purchased 8 the securities of Electronic Arts between January 26, 2005 through March 21, 2005, inclusive, and 9 who were damaged thereby. Excluded from the Class are Defendants, the officers and/or directors 10 of the Company, at all relevant times, members of their immediate families and their legal 11 representatives, heirs, successors or assigns and any entity in which Defendants have or had a 12 controlling interest. 13 28. The members of the Class are so numerous that joinder of all members is 14 impracticable. Throughout the Class Period, Electronic Arts had more than 307 million shares of 15 common stock outstanding that were actively traded on the NASDAQ National Market. While the 16 exact number of Class members is unknown to Lead Plaintiffs at this time and can only be 17 ascertained through appropriate discovery, Lead Plaintiffs believe that there are hundreds or 18 thousands of members in the proposed Class. Record owners and other members of the Class may 19 be identified from records maintained by Electronic Arts or its transfer agent and may be notified of 20 the pendency of this action by mail, using the form of notice similar to that customarily used in 21 securities class actions. 22 29. Lead Plaintiffs’ claims are typical of the claims of the members of the Class as all 23 members of the Class were similarly affected by Defendants' wrongful conduct in violation of 24 federal law that is complained of herein. 25 30. Lead Plaintiffs will fairly and adequately protect the interests of the members of the 26 Class and have retained counsel competent and experienced in class and securities litigation. 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 8 -

1 31. Common questions of law and fact exist as to all members of the Class and 2 predominate over any questions solely affecting individual members of the Class. Among the 3 questions of law and fact common to the Class are: 4 (a) whether the federal securities laws were violated by Defendants’ acts as 5 alleged herein; 6 (b) whether statements made by Defendants to the investing public during the 7 Class Period misrepresented material facts about the business and operations of Electronic Arts; and 8 (c) to what extent the members of the Class have sustained damages and the 9 proper measure of damages. 10 32. A class action is superior to all other available methods for the fair and efficient 11 adjudication of this controversy since joinder of all Class members is impracticable. Furthermore, 12 because the damages suffered by individual Class members may be relatively small, the expense and 13 burden of individual litigation make it impossible for members of the Class to individually redress 14 the wrongs done to them. There will be no difficulty in the management of this action as a class 15 action. 16 BACKGROUND FACTS 17 33. Electronic Arts develops, publishes and distributes interactive software games that are 18 playable by consumers on home videogame machines, such as the Sony PlayStation 2, Microsoft 19 Xbox and Nintendo GameCube consoles, personal computers, hand-held game machines (also 20 known as mobile platforms, such as Game Boy Advance), and online, over the Internet and other 21 proprietary online networks. Many of the Company’s games are based on content that the Company 22 licenses from others, such as Madden NFL Football and Harry Potter, and many of the Company’s 23 games are based on wholly-owned intellectual property, such as The Sims. 24 34. On October 19, 2004, the Company announced its financial results for its second 25 quarter ending September 30, 2004. In sharing a very optimistic outlook for the months to come, 26 Defendant Probst stated “[w]e enter the holidays with strong momentum in North America, Europe 27 and Asia.” He continued, “EA SPORTS is having its best year ever and The Sims 2 had the 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 9 -

1 strongest PC launch in EA’s history.” Based substantially upon these representations, shares of the 2 Company traded at or about $45.00 per share. 3 35. In addition to the foregoing, during the fall of 2004, Defendants also guided investors 4 to believe that the Company had an “exceptional” line-up of new products, including at least eleven 5 new releases which Defendants expected could achieve “platinum” status. On December 6, 2004, 6 Defendant Probst participated in a conference call with analysts wherein he touted the Company’s 7 growth of platinum titles. He specifically stated: 8 [W]e continue to grow the number of platinum titles on an annual basis if you take a look at the last four year period. Where we got to having 27 titles last year which 9 sold more than 1 million units in our fiscal year. And that absolutely dwarfs any of the competition. 10 36. Of these “platinum” status titles, none were more important to the near-term future of 11 the Company than its basketball and football games. In fact, during the Company’s December 12 conference call for analysts and investors, Defendant Probst stated that the Company expected to 13 attain about 80% market share in both basketball and football games. Adding to the positive 14 outlook, Defendant Probst also stated: 15 And as we approach the holidays, we think we are ready. We are global, more than 16 50% of the business is going to happen outside of North America. We have a broad portfolio of hit-driven franchises, more than anybody else in the industry. The best 17 global marketing in the business and our holiday quarter alone is estimated to exceed the annual revenue of our next closest competitor. So a pretty distinct 18 difference in terms of revenues between us and the next closest company. [Emphasis added.] 19 37. Despite the Company’s repeated claims regarding its vast size advantage, by the start 20 of the Class Period, the Company was already experiencing the impact of massive competition and 21 price-cutting by a key competitor. During 2004, one of the Company’s most serious competitors, 22 Take-Two Interactive, began retailing its sports games at below $20.00 per unit, vastly lower than 23 the $45 - $50 prices charged by Electronic Arts for its premium games. Worse yet for the Company, 24 it was widely reported that Take-Two Interactive’s ESPN NFL 2K5 was considered by many video 25 game players to be equal to, or even better than, EA’s Madden football game in terms of quality. 26 38. As a result of the onslaught of competition by game manufacturers such as Take-Two 27 Interactive, by the end of 2004, EA’s Madden NFL videogame had outsold Take-Two’s ESPN game 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 10 -

1 only for certain game consoles, such as the PlayStation2 game platform, while the Take-Two ESPN 2 title outsold Madden on the Microsoft Xbox platform. In addition, by the end of 2004, Take-Two 3 had also expanded its line of $19.99 price point sports video games to include its basketball and 4 hockey games. In the end, EA was also forced to lower its prices, the result of which was to impact 5 its gross margins. 6 39. In addition to the significant increase in competition at the end of 2004, Electronic 7 Arts was also under pressure because of its reliance on game sequels to create revenues. In fact, as 8 The New York Times ultimately reported on August 7, 2005, the Company’s sequel products appear 9 to be lacking in originality and are less effective in generating consumer excitement. According to 10 that article: 11 By year’s end, Electronic Arts plans to release 26 new games, all but one of them a sequel, including the 16th version of N.H.L. Hockey, the 11th of the racing game 12 Need for Speed and the 13th of the P.G.A. Tour golf game. The company also relies heavily on creating games based on movies like the James Bond and Lord of the 13 Rings series, rather than developing original brands. 14 “There’s a feeling of franchise fatigue. Gamers are wondering, ‘Do I need to buy 15 this game again this year? I just bought it last year,’” said Mike Hickey, an analyst with Janco Partners, an investment firm in Denver, who has a sell rating on the 16 company’s stock.

17 40. In addition to suffering from increased competition and a somewhat stale line of 18 products, by the inception of the Class Period, EA was also being negatively impacted by hardware 19 shortages by the leading game platform manufacturers, such as the Sony PlayStation. For example, 20 when Defendant Probst appeared at the UBS Media Conference on or about December 6, 2004, he 21 stated, in part, that, “There is a shortage of PS2 hardware in the North American marketplace and 22 also in Europe and we don’t know how severe that shortage is going to be between now and the 23 holiday season.” Similarly, at the CSFB Media Conference the following day, Defendant Probst also 24 stated that the lack of hardware was also then limiting the number of software buyers, because 25 26 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 11 -

1 consumers were not purchasing the “incremental levels of software” that would have accompanied 2 new hardware purchases.1 3 41. Both prior to and throughout the Class Period, Defendants were very well aware of 4 the full impact of any hardware shortages as well as the sales positions of each of the Company’s 5 individual game titles. Throughout this time, EA maintained sophisticated and automated inventory 6 tracking and control systems. According to sources familiar with the Company, during this time, EA 7 utilized highly automated information, sales and business management tools provided by Oracle. 8 The use of Oracle technologies provided Defendants with sophisticated enterprise management tools 9 including both database technology software and applications software. The Company’s database 10 technology software was used for developing and deploying applications on the Internet and on 11 corporate intranets, and included database management software, application server software, 12 development tools, and collaboration software. Similarly, the Company’s Oracle applications 13 software was also used to automate business processes and provided intelligence for financials, 14 projects, marketing, sales, order management, procurement, supply chain, manufacturing, service, 15 and human resources services and processes. 16 42. In fact, several witnesses interviewed by counsel for the purposes of this litigation 17 have confirmed both that the Company utilized sophisticated Oracle business management tools and 18 that, because of the effectiveness of these tools, Defendants had immediate or near-immediate access 19 to information about the Company and about its unit sales - - sometimes as a result of shared point of 20 sales information collected by EA’s retailers or distributors. In this regard, these witnesses have 21 stated, in part, the following: 22 23

24 1 It is interesting to note that, following the end of the Class Period, Defendants attempted to blame 25 hardware supply shortages for the Company’s decline in 4Q:F05 sales, despite the fact that this was known to Defendants and taken into account in their estimates prior to and at the inception of the 26 Class Period. Moreover, regardless of Defendants’ attempts to blame hardware shortages for EA’s declining sales, analysts at CSFB stated, “While the lack of hardware supply cuts across the industry, 27 we believe it is a distant second to EA’s weak catalog sales as a driver of this result.” 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 12 -

1 * Former Staff Accountant 11/02 - 2/05: The Company’s Oracle systems, which were adopted by many units within the Company, would allow EA to track sales within 2- 2 3 days.

3 * Former Senior Director: Distribution & Logistics 1992 – 2003: “In terms of 4 recognizing revenue, they knew on a daily basis what the revenue was. There were enough reports, enough documentation to back up the amount of revenue on a daily 5 basis, both from returns back and sales out the door.”

6 * Former District Manager Hawaiian Islands & Guam for GameStop Inc., a leading retailer of EA games: EA was tied into the Computer system at GameStop, and EA 7 would get a tally of GameStop’s sales daily, at the end of every day. 8 * Former Senior Director: Distribution & Logistics 1992 – 2003: With many 9 customers, EA could just log onto their websites and see how good or bad its games are doing in their chain and what price they were selling for. 10 11 43. In addition to the checks and balances inherent in the specific systems and procedures 12 that the Company purported to maintain and which provided Defendants with constant updates 13 regarding EA’s sales, inventory and reserves, prior to the Class Period, Defendants also represented 14 that the Company adopted a series of controls and procedures that served as a second level of 15 review. As evidence of this, the Company’s Form 10-Q, filed with the SEC on or about November 16 3, 2004, also stated the following:

17 Item 4. Controls and Procedures 18 Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 19 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are controls and other procedures that are designed to ensure that information 20 required to be disclosed in our reports filed under the Exchange Act, such as this 21 report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also 22 designed to ensure that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial and 23 Administrative Officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluates these controls and procedures on an ongoing 24 basis. 25 * * * 26 Evaluation of disclosure controls and procedures. Our Chief Executive Officer 27 and Chief Financial and Administrative Officer, after evaluating the effectiveness of our disclosure controls and procedures, believe that as of the end of the period 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 13 -

1 covered by this report, our disclosure controls and procedures were effective in providing the requisite reasonable assurance that material information required to be 2 disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s 3 rules and forms, and is accumulated and communicated to our management, 4 including our Chief Executive Officer and Chief Financial and Administrative Officer, as appropriate to allow timely decisions regarding the required disclosure. 5 Changes in internal controls. During our last fiscal quarter, no changes occurred in 6 our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 7 However, following the enactment of the Sarbanes-Oxley Act and related SEC 8 regulations, we have enhanced our internal controls and disclosure systems through various measures including: detailing certain internal accounting policies; 9 establishing a disclosure committee for the preparation of all periodic SEC reports; establishing an internal audit function; requiring certifications from various trial 10 balance controllers and other financial personnel responsible for our financial statements; and automating certain manual-entry royalty accounting activities 11 through the implementation of new software management systems. 12 44. Thus, while Defendants had near immediate access to all of EA’s sales information, 13 investors had to rely on Defendants’ representations about the Company’s financial health and well- 14 being. Accordingly, while Defendants touted the financial strength and popularity of the Company’s 15 games, unbeknownst to investors, throughout the Class Period, the Company was suffering from 16 worse than expected sales of its core Madden NFL game and declines in its other game titles. 17 Throughout this time, as evidenced below, Defendants knew or deliberately disregarded that the 18 Company would be unable to meet estimates provided to the market for the fourth quarter and fiscal 19 year ended March 31, 2005. Rather than fully disclose these adverse conditions, however, 20 Defendants instead resorted to improper sales practices, included product tying and “channel 21 stuffing,” which allowed them to maintain the illusion that the Company was still operating 22 according to plan - - at least long enough to allow Company insiders, including Individual 23 Defendants, to liquidate over $58 million of their privately held EA stock while in possession of 24 material adverse non-public information. 25 26 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 14 -

1 SUBSTANTIVE ALLEGATIONS 2 Materially False And Misleading Statements Issued During The Class Period 3 45. On January 25, 2005, after the close of ordinary trading, Defendants issued a press 4 release reporting Electronic Arts’ results for the third quarter ended December 31, 2004. According 5 to this release, Defendants reported better than expected results, with revenue and EPS of $1.428 6 billion and $1.23 compared to analysts’ estimates of $1.375 billion and $1.13. In addition to the 7 foregoing this release quoted Defendant Probst, who stated that “"[t]his quarter, EA further 8 strengthened its long term leadership position.” This release also stated that the Company’s strong 9 financial results for the quarter were being “driven” in part by sales of Madden NFL 2005, among 10 other successful game titles. 11 46. In addition to announcing the foregoing, this release provided very positive revenue 12 and non-GAAP earnings per share estimates for the fiscal year ending March 31, 2005. 13 Accordingly, this release stated, in part, the following: 14 Fiscal Year Expectations - Ending March 31, 2005 15 -- Net revenue is expected to be between $3.275 and $3.325 billion - as compared to $2.957 billion for fiscal 2004. 16 -- Non-GAAP diluted earnings per share are expected to be between $1.90 and 17 $1.95 - as compared to $1.84 for fiscal 2004. This range does not factor in eight cents of estimated charges related principally to our acquisition of 18 Criterion Software and tender offer for Digital Illusions C.E. 19 -- GAAP diluted earnings per share are expected to be between $1.82 and $1.87 - as compared to $1.87 for fiscal 2004. 20 47. On the same day, Defendants Jenson and Probst participated in a conference call with 21 analysts, wherein they highlighted a very positive outlook for the Company as it headed into 22 calendar year 2005. Defendant Jenson specifically stated: 23 In summary, our performance this quarter, both strategically and financially, 24 highlights the benefit of being the global leader, having a broad portfolio of franchise titles and having the best studios and global publishing organization in our business. 25 EA leaves calendar year 2004 in great shape with momentum for the year ahead, and 26 in the strongest long-term position in our history. 27 * * * 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 15 -

1 Full year guidance. For the full year we expect revenue to be between 3.275 and 3.325 billion, as compared to 2.957 billion for fiscal 2004. Non-GAAP diluted 2 earnings per share to be between $1.90 and $1.95, as compared to 1.84 for the prior year. This range does not factor in 8 cents of estimated charges related principally to 3 our acquisition of Criterion Software and the tender for Digital Illusions. GAAP 4 diluted EPS to be between $1.82 and $1.87 as compared to $1.87 for the prior year. These expected results also include the projected impact of our share repurchase 5 program.

6 * * *

7 I will now close and conclude with a few closing thoughts. First, we're playing from 8 a position of global strength with big recurring lasting franchises in place. Second, we are building for the future. And we will continue to invest in people and process 9 and technology and in new global markets. At the same time, we're intent on delivering bottom line results. As we've said in the past, we are 110 percent focused 10 on execution and we take nothing for granted. Speaking for my EA colleagues globally, we're dedicated to compiling the best in creative content with the power of 11 technology, at the highest rates of return in the global entertainment industry. We are 12 a digital entertainment, pure play. With that, Larry and I will open it up to your questions. 13 Defendant Jenson added, 14 15 I can probably add a little more clarity than we have in the past, as we've started into our planning process. So where we are today is we spent the last month 16 doing a lot of work with our divisions globally, looking at the markets, looking at our expense base and also looking at our SKU plan. And if I were to say where we are 17 today relative to three months ago, we feel pretty darned good about top line growth next year… 18 19 48. In reaction to the publication of these positive representations and foreseeable 20 guidance, the price of Electronic Arts common stock soared. Immediately following the publication 21 of these statements shares of the Company rallied over $5.30 per share - - trading from $57.54 per 22 share on January 25, 2005, to $62.84 per share on January 26, 2005. 23 49. Moreover, based in substantial part on the statements made by Defendants in the 24 Company’s press release and during its conference call, during the following days, several analysts 25 that followed Electronic Arts issued very positive reports on the Company. For example, at that 26 time, certain analysts following EA stated, in part, the following: 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 16 -

1 * On January 26, 2005, ThinkEquity Partners analysts Mark Angento and Dan Bergstrom noted that the Company’s “[t]hird quarter results came in ahead of 2 expectations with revenue and EPS of $1.428B and $1.23 versus our $1.375B and $1.13 estimate. … Calendar 2005 is shaping up to be a positioning year with plans to 3 ramp up development capabilities and explore additional opportunities. … We are 4 maintaining our Accumulate rating and $60 price target recognizing that EA is the industry leader and investors are willing to pay for that status.” 5 * On January 26, 2005, Pacific Crest analyst Evan Wilson noted that “Electronic Arts 6 is supremely positioned to capitalize on weak industry conditions with market- share gains, which we believe is reflected in our estimates with revenue growth in 7 both years.” 8 * On January 26, 2005, Credit Suisse First Boston analysts Heath P. Terry, Andrew 9 Thomas and Rachana Iyegar maintained their Outperform rating for the Company, stating “[g]iven the potential impact of PlayStation Portable and the beginning of a 10 new console cycle, the company's track record of share gains during transition periods, and reasonable investor expectations, we believe the risk reward in owning 11 ERTS remains heavily in investors' favor. Therefore, we are reiterating our 12 Outperform and $70 target.”

13 * On January 26, 2005, Bear Stearns analysts R. Glen Reid and Joseph Holland predicted a “bullish tone overall” for the Company after the earnings release and 14 conference call, noting that “[c]onsistent with our views, the company sounded 15 bullish on long-term industry trends.” The analysts also raised their EPS estimate from $1.92 to $1.95 for fiscal year 2005. [Emphasis added.] 16 50. In addition to the foregoing, on January 26, 2005, Citigroup analysts Elizabeth Osur 17 and Jill S. Krutick also gave the Company a “bullish outlook … based on a strong holiday forecast 18 and very positive longer-term view of EA’s position in this fast-growing consumer category.” The 19 analysts specifically highlighted the Company’s fiscal third quarter earnings: 20 FISCAL THIRD QUARTER EARNINGS BETTER THAN EXPECTED 21 Electronic Arts reported operating F3Q05 (ended 12/04) results that were above 22 our estimates and at the higher end of the company's target range (with sales and gross margin both stronger than we expected). 23 * * * 24 Net revenues (down 3.2% to $1.43 billion) came in better than our $1.40 billion 25 expectation and at the mid-point management's $1.400-$1.475 billion goal. [] 26 In the quarter, the revenues gains were driven by solid sales of Need for Speed Underground 2, FIFA 2005, The Lord of the Rings, The Third Age, NBA LIVE 27 2005, The Urbz: Sims in the City, Golden Eye: Rogue Agent and the Lord of the Rings: Battle for Middle-Earth, Madden NFL 2005, The Sims 2 and Tiger Woods 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 17 -

1 PGA Tour 2005 -- each selling over one million copies in the quarter. [Emphasis added.] 2 51. Defendants’ representations concerning Electronic Arts’ expected results in the 3 quarter ending March 31, 2005, were each materially false and misleading when made because, at 4 the time they were made, Defendants knew that sales of Electronic Arts’ titles introduced during the 5 2004 holiday season were not strong enough to support the projected net revenues of between 6 $3.275 and $3.325 billion and non-GAAP diluted earnings per share between $1.90 and $1.95. At 7 all times, Defendants’ positive representations were lacking in any reasonable basis when made and 8 were motivated by Defendants’ knowledge that timely admitting poorer than expected sales would 9 have caused the stock price to drop -- which it did, after insiders sold over $58 million in stock and 10 Defendants belatedly revealed the truth. 11 52. The financial results announced on January 25, 2005, were repeated and incorporated 12 into the Electronic Arts Form 10-Q filed with the SEC on February 2, 2005, for the third quarter of 13 fiscal year 2005. The Form 10-Q was signed by Defendant Jenson. 14 53. The Form 10-Q also included certifications from Defendants Jenson and Probst, as 15 required by Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of their knowledge, the 16 quarterly report “fully complies with the requirements of Section 13(a) or 15(d) of the Securities 17 Exchange Act of 1934,” and “the information contained in the Report fairly presents, in all material 18 respects, the financial condition and results of operations of Electronic Arts Inc. for the periods 19 presented therein.” 20 54. Similar to the Company’s prior SEC filings, EA’s 3Q:F05 Form 10-Q also contained 21 statements by Defendants Jenson and Probst which certified the internal controls of the Company, in 22 part, as follows: 23 The registrant’s other certifying officer(s) and I are responsible for establishing and 24 maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: 25 (a) Designed such disclosure controls and procedures, or caused such 26 disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated 27 subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 18 -

1 (b) Evaluated the effectiveness of the registrant’s disclosure controls 2 and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period 3 covered by this report based on such evaluation; and

4 (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent 5 fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the 6 registrant’s internal control over financial reporting; and

7 The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s 8 auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 9 (a) All significant deficiencies and material weaknesses in the design 10 or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and 11 report financial information; and

12 (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control 13 over financial reporting.

14 55. The Form 10-Q disclosed the Company’s purported policy on sales returns and price 15 protection: 16 Sales returns and allowances and bad debt reserves

17 We principally derive revenue from sales of packaged interactive software games designed for play on videogame platforms (such as the PlayStation 2, Xbox and 18 Nintendo GameCube), PCs and hand-held game machines also known as mobile platforms (such as the Nintendo Game Boy Advance and Nintendo DS). Product 19 revenue is recognized net of sales allowances. We also have stock-balancing programs for our PC products, which allow for the exchange of PC products by 20 resellers under certain circumstances. We may decide to provide price protection for both our personal computer and videogame system products. In making this 21 determination, we evaluate inventory remaining in the channel, the rate of inventory sell-through in the channel, and our remaining inventory on hand. It is our general 22 practice to exchange products or give credits, rather than give cash refunds. 23 We estimate potential future product returns, price protection and stock-balancing programs related to current-period product revenue. We analyze historical returns, 24 current sell-through of distributor and retailer inventory of our products, current trends in the videogame market and the overall economy, changes in customer 25 demand and acceptance of our products and other related factors when evaluating the adequacy of the sales returns and price protection allowances. In addition, 26 management monitors the volume of our sales to retailers and distributors and their inventories, as substantial overstocking in the distribution channel can 27 result in high returns or substantial price protection requirements in subsequent periods. In the past, actual returns and price protection have not 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 19 -

1 generally exceeded our reserves. However, actual returns and price protections may materially exceed our estimates as unsold products in the distribution channels are 2 exposed to rapid changes in consumer preferences, market conditions or technological obsolescence due to new platforms, product updates or competing 3 products. For example, the risk of product returns and/or price protection for our products may increase as the PlayStation 2, Xbox and Nintendo GameCube consoles 4 move through their lifecycles and an increasing number and aggregate amount of competitive products heighten pricing and competitive pressures. While management 5 believes it can make reliable estimates regarding these matters, these estimates are inherently subjective. Accordingly, if our estimates changed, our returns and price 6 protection reserves would change, which would impact the total net revenue we report. For example, if actual returns and/or price protection were significantly 7 greater than the reserves we have established, our actual results would decrease our reported total net revenue. Conversely, if actual returns and/or price protection were 8 significantly less than our reserves, this would increase our reported total net revenue. 9 Similar language is included in the Company’s Form 10-Ks that were filed in 2004 and 2005. 10 56. Regarding the Company’s reserves for sales returns, the Form 10-Q stated: 11 Reserves for sales returns, pricing allowances and doubtful accounts increased from 12 $155 million as of March 31, 2004 to $206 million as of December 31, 2004. Our reserves remained relatively constant as a percentage of trailing nine month total net 13 revenue as of December 31, 2004 as compared to the trailing nine month total net revenue as of December 31, 2003. We believe these reserves are adequate based on 14 historical experience and our current estimate of potential returns, price protection and allowances. 15 57. Taking full advantage of the artificial inflation in the price of EA stock caused by 16 Defendants’ materially false and misleading statements, Company insiders next raced to the market 17 to liquidate over $58 million of their personally held EA shares between 1/28/05 and 2/7/05, while in 18 possession of adverse non-public information about the Company, as follows: 19 M. Richard Asher: Board Member 20 Transaction Date Shares Price $ Value 1/28/2005 23,600 62.68 1,479,248 21 22 Stephen Been: SVP and General Counsel Transaction Date Shares Price $ Value 23 1/28/2005 4,000 61.70 246,800 1/28/2005 4,000 61.70 246,800 24 Total 8,000 493,600

25 Gerhard Florin: SVP Transaction Date Shares Price $ Value 26 1/28/2005 14,798 62.60 926,355 27 1/28/2005 3,998 62.60 250,275 1/28/2005 1,204 62.60 75,370 28 1/31/2005 40,000 64.20 2,568,000 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 20 -

1 Total 60,000 3,820,000

2 Warren Jenson: Exec VP/CFO/CAO Transaction Date Shares Price $ Value 3 1/28/2005 91,700 62.18 5,701,906 4 1/31/2005 108,300 62.90 6,812,070 Total 200,000 12,513,976 5 Joel Linzer: SVP 6 Transaction Date Shares Price $ Value 2/2/2005 20,000 65.44 1,308,800 7 2/2/2005 7,000 65.44 458,080 Total 27,000 1,766,880 8 9 Don Mattrick: President –Worldwide Studios Transaction Date Shares Price $ Value 10 1/28/2005 252,657 62.11 15,692,526 1/28/2005 22,343 62.11 1,387,724 11 Total 275,000 17,080,250

12 Bruce McMillan: Executive VP Transaction Date Shares Price $ Value 13 2/1/2005 27,241 64.93 1,768,758 14 2/1/2005 22,759 64.93 1,477,742 2/2/2005 75,000 65.64 4,923,000 15 Total 125,000 8,169,500

16 Lawrence Probst III: Chairman and CEO Transaction Date Shares Price $ Value 17 1/31/2005 99,700 63.72 6,352,884 1/31/2005 300 63.72 19,116 18 Total 100,000 6,372,000

19 J. Russell Rueff, Jr.: Executive VP 20 Transaction Date Shares Price $ Value 1/28/2005 35,000 62.66 2,193,100 21 1/28/2005 5,000 62.66 313,300 Total 40,000 2,506,400 22 Nancy Smith: Executive VP 23 Transaction Date Shares Price $ Value 1/28/2005 34,070 61.50 2,095,305 24 1/31/2005 31,348 63.47 1,989,658 25 1/31/2005 2,721 63.30 172,239 Total 68,139 4,257,202 26 GRAND 27 TOTALS: 926,739 $58,459,056

28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 21 -

1 58. In addition to the enormous amounts involved, the unusual timing and amount of 2 these sales is apparent when comparing insiders’ Class Period sales to their sales for the 54-day 3 period immediately preceding the Class Period, in which the Individual Defendants and the same 4 insiders sold no stock: 5 Comparison of Insider Sales 6 54 day period immediately preceding Class Period vs 54 day Class Period 7 300000 8 250000 9 200000

10 150000 11 Shares Sold 100000

12 50000

0 13 R. ASHER S. BENE G. FLORIN W. JENSON J. LINZNER D. MATTRICK B. MCMILLAN L. PROBST J. R. RUEFF N. SMITH

12/2/04 - 1/25/05 0 0 0 0 0 0 0 0 0 0 14 1/26/05 - 3/21/05 23,600 8,000 60,000 200,000 27,000 275,000 125,000 100,000 40,000 68,139

15 16 Electronic Arts 17 Comparison of Insider sales for 54 day period preceding Class Period 12/2/2004 - 1/25/2005 vs. 1/26/05 - 3/21/05 18 Proceeds from Class Shares Sold Shares Sold Period Sales 19 Insider 12/2/04 – 1/25/05 1/26/05 - 3/21/05 1/26/05 - 3/21/05 20 R. ASHER 0 23,600 $1,479,248 21 S. BENE 0 8,000 $493,600 G. FLORIN 0 60,000 $3,820,000 22 W. JENSON 0 200,000 $12,513,976 23 J. LINZNER 0 27,000 $1,766,880 D. MATTRICK 0 275,000 $17,080,250 24 B. MCMILLAN 0 125,000 $8,169,500 L. PROBST 0 100,000 $6,372,000 25 J. R. RUEFF 0 40,000 $2,506,400 26 N. SMITH 0 68,139 $4,257,202

27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 22 -

1 59. Thereafter, on or about February 17, 2005, Individual Defendant Jenson participated 2 in a presentation and discussion with analysts at the Smith Barney Citigroup New York Leisure 3 Conference, where he fielded a question on how the Company comes up with its forecasts for the 4 year, and during which he stated, in part, the following: 5 WARREN JENSON: The first question dealing with how we came up with our forecast for the coming year, we went through, I'd say a three-step process as a 6 management team. The first thing that we do in terms of looking at our growth is to drive a bottoms up forecast from our regions where whether its Europe, North 7 America, Asia-Pac, all talk about what they expect to see in terms of growth.

8 The second thing that we did was we then met as a senior management team and really just as you all probably do have a big spreadsheet up with all the historical 9 growth numbers and looking back to the last transition, looking back to the last couple of years, we all talk about where we saw those numbers coming out. And then 10 based on a lot of expertise if people would have been around for several transitions in that room, and also a large dose of quantitative analysis, we then came up with our 11 own thesis. 12 The second and third thing we then did was push that feedback back into each of our regions and then they came back to us and then finally as a management team we sat 13 and kind of went through step two again and walked down our forecast. That is how we did it. 14 60. Subsequently on March 1, 2005, Defendant Jenson participated in the Bear, Stearns & 15 Co. Inc. Media Conference. During this conference, he again commented on the “sustainability and 16 “reliability” of the Company’s results and stated that the Company was still operating from a 17 “position of strength” in product markets, in part, as follows: 18 The second thing I'd like to do now is touch briefly on our strengths and how we play 19 from a position of strength. The first thing that we have in terms of our overall strength is things that -- I think one characteristic that drives our sustainability and 20 our reliability of our results. Looking at a trailing 12 months ended for our fiscal '04, we had 27 platinum titles. So of the roughly 30 to 35 titles that we launched, 27 of 21 those were platinum hit. That obviously gives us a lot of strength in terms of what it does to our overall margin structure. [Emphasis added.] 22 61. Thereafter, in a March 7, 2005 analyst report, Credit Suisse First Boston analysts 23 Heath P. Terry, Andrew Thomas and Rachana Iyengar raised their 12-month price target from 24 $70.00 per share to $85.00 per share and maintained their Outperform rating on the Company’s 25 stock. 26 62. In addition, on March 16, 2005, Investment Research analyst Jeffrey S. Thomison 27 initiated coverage on Electronic Arts, attributing the Company’s reserves against receivables as one 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 23 -

1 of the factors in his determination that Electronic Arts “has the strongest financial profile in the 2 industry.” In this regard, the analyst also stated, in part, the following: 3 We believe Electronic Arts has the strongest financial profile in the industry, with the absence of debt and large cash balances being hallmarks of the company over 4 the years. [] At December 31, 2004, the company had $2.564 billion in cash and short-term investments, or roughly $8 per common share. This represents an 5 increase of over $740 million from the year ago figure. The current ratio was 3.6-to- 1. Reserves against receivables were just over $200 million, or 19% of gross 6 accounts receivable. As in recent periods, there was no interest bearing debt. Stockholders' equity was $3.334 billion. [Emphasis added.] 7 The analyst also viewed management’s recent guidance with “a high degree of reliability,” stating, 8 in part, the following: 9 With fiscal 2005 almost over (March 31 year end), we believe management's 10 recent guidance can be viewed with a high degree of reliability. [Emphasis added.] 11 12 Reasons Plaintiffs Allege Defendants’ Statements Were False

13 63. The Defendants’ statements detailed above were materially false and misleading 14 because Defendants knew and failed to disclose that Electronic Arts was taking undisclosed actions 15 which had the purpose and effect of artificially inflating sales during the 3Q:F05, but which had the 16 offsetting effect of lowering results for 4Q:F05 and beyond. As PiperJaffray analysts wrote in a 17 March 22, 2005 report - - the day after the Company belatedly disclosed the true financial and 18 operational condition of the Company - - “the Company stuffed the channel in December.” 19 64. In fact, as investors have now learned, by forcing product supply into the Company’s 20 sales and distribution channel which far exceeded known demand for those products, Defendants 21 were able to “borrow” sales from the 4Q:F05 and report them in 3Q:F05. While this had the effect 22 of cannibalizing the fourth quarter, a fact of which Defendants were fully aware, this also allowed 23 Defendants to create the impression during 3Q:F05 that the Company had exceeded expectations, 24 and to artificially inflate the price of EA stock long enough to allow Company insiders to liquidate 25 over $58 million of their privately held Company shares while in possession of material adverse non- 26 public information. 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 24 -

1 65. As investors have also now learned, throughout the Class Period Defendants were 2 engaged in several related undisclosed activities which acted to artificially inflate sales and earnings 3 during 3Q:F05. The first undisclosed activity centered around Defendants’ offering uncharacteristic 4 “price protections” on some of the Company’s most popular “platinum” games, such as Madden 5 NFL football. The price protections offered by Company were primarily side agreements, entered 6 into at the time the Company recorded revenues, that granted EA customers either the right to lower 7 prices, or the right to future credits on further game purchases. 8 66. While Defendants did disclose the existence of the use of price protections in EA’s 9 SEC filings, at no time during the Class Period did Defendants ever reveal that they had manipulated 10 the use of such incentives to inflate earnings. Nor did they disclose the foreseeable effects of the 11 sudden extension of price protections to many resellers and retailers at periods much earlier in the 12 life-cycle of a game. One particular example of Defendants’ undisclosed use of price protections 13 was related to sales of Madden NFL. Thus, at the same time that Defendants were touting the 14 success of Madden NFL during the third fiscal quarter of 2005, they had secretly offered price 15 protections not normally granted for one of its newly launched premiere games until another six to 16 eight months. 17 67. While the exact effects of the Company’s price protection scheme cannot be fully 18 determined from the selective disclosures in EA’s filings, what is known is that Defendants were 19 using this technique to manipulate sales throughout the Class Period. According to sources familiar 20 with the Company, Defendants’ manipulative and improper price protection activities included, in 21 part, the following: 22 * According to a former analyst in the Company’s retail-account services department, by the 3Q:F05, price protection increased dramatically, as Defendants were 23 “constantly increasing” price protections and entering into so many diverse agreements with disparate vendors that the retail account services department “could 24 not even keep up with them anymore.” This practice was severely at odds with the 25 Company’s historical prior practice of using price protection only when a product had been in the market for several months and only when market demand for the 26 product had declined, in order to protect distributors and retailers.

27 * As further evidence that, during the Class Period, Defendants began providing larger and more frequent price protection deals with vendors, a current Product Manager for 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 25 -

1 a major EA distributor interviewed for the purpose of this litigation stated that, in the late fall of 2004, Take-Two’s $19.99 ESPN NFL 2K5 was having a material adverse 2 impact on the launch of Madden NFL and EA immediately began to implement price protections on the Madden game. According to this witness, “they price protected 3 Madden very, very early and typically they don’t even start price protecting Madden 4 until 9 months to a year down after sales start. They knew that sales were bad on it. They might not want to admit it, but they knew.” 5 * According to a former senior financial analyst at Electronic Arts, the management at 6 the Company was well aware of the amount of product in the pipeline at any time, and “knew the limits of what they could push into the channels.” 7 8 * According to a former director of distribution, Defendants knew on a daily basis what EA’s revenue figures were. They also received documentation concerning the 9 number of returns on a daily basis, the number of pre-orders, and the number of orders that had not yet shipped due to inventory issues. With respect to Defendants’ 10 knowledge of revenue numbers, this former employee stated: “they would have known all along on a daily basis, they know what that [revenue] number is.” 11

12 * According to this former employee, during December the Company was “stuffing everything out there” and “got it all back in January and February.” [Emphasis 13 added.]

14 * According to a former Electronic Arts manager, every business segment of 15 Electronic Arts had specific revenue goals. In January 2005, it was clear that the Company would be falling short of its revenue goals due in part to faltering sales 16 from Madden NFL. By January, this former employee “saw the writing on the wall that [Electronic Arts] was faltering” and “could tell that sales weren’t what they had 17 been previously.” Management had regular company-wide meetings to discuss the company’s performance and meeting revenue goals, where they would discuss the 18 forecast and how actual sales were matching up. 19 * A former web developer explained that Electronic Arts had a bonus system driven by 20 the company’s sales. In December of 2004, bonuses were unusually low, reflecting that employees were not meeting sales targets. 21 * A former sales analyst who had access to both actual and forecasted sales numbers 22 and who left the Company at the end of January 2005, confirmed that management 23 was “disappointed” with their numbers at the end of January, and “they weren’t where they were hoping to be.” In particular, Fight Night 2 was “not getting the 24 response [the Company] expected.”

25 * A former Director of Quality Assurance with the Company’s Maxis Studio explained that towards the end of 2003, the PC version of Sims 2 “was more than $1 million 26 over budget and between eight months to one year behind schedule,” and although 27 “the game had been originally slotted for delivery sometime around February 2004,” it “was not actually released until November 2004.” Defendants knew of this delay, 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 26 -

1 and thus knew that the Company would have problems meeting its earnings projections. 2 68. In addition to the foregoing, other witnesses provided more insight into Defendants’ 3 manipulative sales practices during the time that they knew sales were declining in the third quarter 4 of fiscal 2005. As further evidence of this, a former assistant buyer at GameStop, a national retailer 5 of Electronic Arts’ video games, stated that Electronic Arts would push retailers to take on far more 6 game titles than they wanted or had ordered by requiring distributors to take on additional titles in 7 order to get access to the game the retailer had ordered. A former sales and marketing 8 associate/buyer at Mecca Electronics Inc., a New-York based retailer that distributed Electronic Arts 9 games, confirmed that the Company required retailers to accept shipments of games that the retailers 10 or distributors knew they could not sell, in order to get games early, to receive price protections, and 11 to receive advertising contributions. According to the New-York based former associate/buyer, the 12 Company had historically been very conservative about offering price protection to retailers. In 13 addition, according to the former assistant buyer, the Company kept “very close tabs on how sales at 14 affiliated retailers were doing” and had access to retailers such as GameStop’s sales data the Monday 15 following the end of every week. 16 69. In addition to and in conjunction with the price protections that were being secretly 17 accelerated on the Company’s leading games, such as Madden NFL almost immediately after its 18 launch date, Defendants also engaged in the manipulative practice of tying products. As one sales 19 and marketing associate at one of the Company’s New York distributors has stated, Electronic Arts 20 often forced distributors to accept shipments of games that the distributors knew they could not sell, 21 in order to receive the Company’s popular games or newly launched games. According to this sales 22 associate, Defendants would also tie shipping rates and advertising credits to a distributor’s 23 willingness to accept tied in products. According to this sales associate, “If you want a better 24 [shipping] rate for that, you take X amount of games. Or if you want a good amount of Madden, a 25 top-selling item, early - - you want to get it early so that you have it there for day one - - you take a 26 really bad game too and take in a lot of it.” 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 27 -

1 70. Distributors were often willing to enter into such tying arrangements, because they 2 also received price protections on the games they knew they could not sell, thereby limiting their 3 exposure on those titles. The effect of this arrangement, however, was that it substantially increased 4 the amounts of the Company’s undisclosed liabilities. It also had the effect of creating additional 5 risks to investors, because, once the Company began having difficulties selling games such as 6 Madden NFL, not only did the Company have excess Madden product in its pipeline, but it also had 7 all the additional product that was sold tied to the Madden games. This is, in part, why analysts at 8 PiperJaffray stated in a March 22, 2005 report that the Company had “stuffed the channel in 9 December” 2004. 10 71. The above-referenced facts concerning the material declines in the Company’s sales, 11 the manipulation of price protections and the use of tying procedures to sell products, are all facts 12 which are considered material, and the disclosure of which was required by GAAP and SEC rules. 13 Specifically, SAB 101 states: 14 Management's Discussion and Analysis (MD&A) requires a discussion of liquidity, capital resources, results of operations and other information necessary to an 15 understanding of a registrant's financial condition, changes in financial condition, and results of operations. This includes unusual or infrequent transactions, known trends 16 or uncertainties that have had, or might reasonable be expected to have, a favorable 17 or unfavorable material effect on revenue, operating income or net income and the relationship between revenue and the costs of the revenue. Changes in revenue 18 should not be evaluated solely in terms of volume and price changes, but should also include an analysis of the reasons and factors contributing to the increase or decrease. 19 The Commission stated in Financial Reporting Release (FRR) 36 that MD&A should "give investors an opportunity to look at the registrant through the eyes of 20 management by providing a historical and prospective analysis of the registrant's 21 financial condition and results of operations, with a particular emphasis on the registrant's prospects for the future." Examples of such revenue transactions or 22 events that the staff has asked to be disclosed an discuss in accordance with FRR 36 are: 23 • Shipments of product at the end of a reporting period that reasonably might be expected to result in lower shipments and revenue in the 24 next period. 25 • Changing trends in shipments into, and sales from, a sales channel or 26 separate class of customer that could be expected to have a significant effect on future sales or sales returns. 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 28 -

1 • Seasonal trends or variations in sales.

2 The Truth Emerges 3 72. It was only on March 21, 2005, however, that investors began to learn the truth about 4 the Company. That day, after the markets closed, Electronic Arts issued a press release titled 5 “Electronic Arts Updates Fiscal Year 2005 Estimates,” wherein the Company belatedly disclosed 6 that Electronic Arts would not be able to meet guidance for the quarter ended March 31, 2005. This 7 release stated, in part, the following: 8 REDWOOD CITY, Calif. - (BUSINESS WIRE) - March 21, 2005 - Electronic Arts (Nasdaq:ERTS) today announced revised estimates for the Company’s fiscal year 9 ending March 31, 2005. The changes are primarily the result of lower than expected sales in both North America and in Europe. 10 The Company now expects fiscal year 2005 net revenue to be between $3.100 and 11 $3.125 billion, as compared to the Company’s previous estimate of between $3.275 and $3.325 billion. 12 Non-GAAP diluted earnings per share are now expected to be between $1.70 and 13 $1.72 as compared to the Company’s previous estimate of $1.90 to $1.95. 14 GAAP diluted earnings per share are now expected to be between $1.62 and $1.64 -- as compared to the Company’s previous estimate of $1.82 to $1.87. 15 “These results are clearly disappointing,” said Larry Probst, Chairman and Chief 16 Executive Officer. “While our new releases are performing reasonably well, they have not been able to offset a significant falloff in catalog sales.” 17 18 73. Upon this news, shares of Electronic Arts dropped 16.88%, from a closing price of 19 $66.35 on March 21, 2005, to close at $55.15 on March 22, 2005. This one-day drop resulted in a 20 market capitalization loss of an astonishing $3,448,881,598.40. 21 74. Later that day, Defendants Jenson and Probst held a conference call with analysts, 22 wherein Defendant Jenson provided some explanation for the Company’s lowered guidance: 23 Fourth-quarter performance -- let me begin by saying that we are very disappointed that we are having this call. In short, we missed our plan, and we missed our 24 forecast. From where we sit today, our less-than-expected results were driven by several factors. First, we underestimated the impact of the hardware shortages on our 25 Q4 sales. In particular, our PS2-related sales for the quarter have fallen well below our expectations. 26 Second, our Q3 releases have underperformed our expectations in Q4. We left Q3 27 with strong sales, but that momentum has not carried through as we had expected.

28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 29 -

1 Third, though our Q4 titles are performing well, we expected more. So far in North America, we have had more top 10 spots on both the Xbox and PS2 compared to a 2 year ago, but (technical difficulty) positions. 3 Finally, as a result of lower-than-expected sales, we felt it appropriate that we add to our price protection and sales return reserves. This will have a negative impact on 4 our margins for the quarter. [Emphasis added.] 5 75. On the conference call, analyst Tony Gikas from PiperJaffray questioned Jenson 6 regarding the possibility of channel stuffing during the quarter: 7 TONY GIKAS: Quick one here -- was there any titles that were pushed out of the March quarter into the new year that you could identify? And was there product 8 that was shipped during the December quarter that perhaps was in the channel and created a little bit of -- inventory issues for the March quarter? 9 WARREN JENSON: The only thing that I can tell you that ended up slipping out of 10 the quarter, if you will, or going into next quarter was FIFA on the PSP. And there's nothing specific that I could comment on relative to your second question, Tony. 11 [Emphasis added.] 12 76. Lastly, Defendant Jenson fielded a question from an unidentified analyst regarding 13 price protection reserves: 14 UNIDENTIFIED SPEAKER: This is (indiscernible) for Jeetil. [] But had a quick question on your guidance range for this year. If you kind of flow through your sales 15 numbers, lower sales numbers in the fourth quarter, are we looking at any trends on the margin line as opposed to simply kind of a sales impact as it filters through? Or is 16 it an issue for the reserves that you guys are taking? 17 WARREN JENSON: I think the biggest thing is -- there's clearly a revenue impact, which clearly has a bottom-line operating impact, as well. And then the second thing 18 is -- the incremental price protection reserves will obviously impact both our gross margin and operating margin. [Emphasis added.] 19 77. In a March 22, 2005 Bloomberg News article Defendant Jenson attributed the shortfall 20 to poor holiday sales: “‘We’re very disappointed,’ Chief Financial Officer Warren Jenson said in a 21 telephone interview yesterday. ‘Holiday releases under-performed.’” 22 78. PiperJaffray analysts Anthony N. Gikas and Stephanie S. Wissink pointed to many 23 problems with the Company’s recent guidance change in their March 22, 2005 analyst report: 24 KEY POINTS: 25 - CREDIBILITY ISSUES CREEP UP ON MANAGEMENT. 26 - PROBLEMS ARE SPECIFIC TO EA; REDUCING ESTIMATES. 27 - WOW-CYCLE PEAK CAME IN FY04 FOR EA. 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 30 -

1 - SHARE REPURCHASE COULD PROVIDE SUPPORT 2 - RENEWED CONCERNS ON NEW LICENSE DEALS. 3 THE SIGNS WERE THERE...MARCH QUARTER IS A BUST: The company 4 reduced its Q405 revenue expectation by $175-$200 million and EPS expectation by $0.20-$0.23. If you thought the release was bad, the conference call was even 5 worse. Management reasons for the shortfall included: 1) hardware shortages led to reduced software sales; 2) Q3 product releases underperformed; 3) Q4 releases 6 underperformed; 4) delayed Europe PSP launch; and 5) catalog sales were below expectations. [(]We would add: 6) the company stuffed the channel in Dec.; 7) has 7 pushed out as many as 3 titles from Q4 to FY06; and 8) sales and EPS were pushed out to help FY06. On balance we think the majority of problems during 8 the quarter are NT and specific to EA. We remain confident with respect to our ATVI and THQI estimates. [Emphasis added] 9 79. In a March 21, 2005 analyst report, Credit Suisse First Boston analysts Heath P. 10 Terry, Andrew Thomas and Rachana Iyengar blamed the Company’s weak sales for the recent 11 announcement, rather than the lack of hardware supply as had been inferred by Defendants. The 12 analysts specifically stated: “[w]e believe there are few implications for the rest of the group 13 from this announcement. While the lack of hardware supply cuts across the industry, we believe it 14 is a distant second to EA's weak catalog sales as a driver of this result.” 15 80. This opinion was shared by Wells Fargo Securities analysts Jennifer Jordan and Yue- 16 shun Ho, who, in a March 22, 2005 analyst report, stated: 17 While EA cites the hardware shortages as the most critical factor in revising its 18 guidance, we believe that the company's competitive strength is a more worrisome issue. Although we would not discount the impact of the hardware 19 shortages on software sales, we note that management did indicate that EA's 4Q05 titles have had lower chart positions overall. Admittedly, the launch of Gran 20 Turismo 4 had a negative impact on Need for Speed Underground 2, but other titles such as NFL Street and Madden have also been displaced by competition on the sales 21 charts. We believe this validates our persistent concern that EA faces tremendous challenges in maintaining its premium brand and market share positions. In addition, 22 we reiterate our concern that the company continues to suffer from operating margin compression. In light of our revised estimates, we anticipate that EA will record a 23 fifth consecutive quarter of Y/Y operating margin decline in 4Q05, which is a reversal of our prior expectations. [Emphasis added.] 24 APPLICABILITY OF PRESUMPTION OF RELIANCE: 25 FRAUD-ON-THE-MARKET DOCTRINE

26 81. At all relevant times, the market for Electronic Arts’ securities was an efficient 27 market for the following reasons, among others: 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 31 -

1 (a) Electronic Arts’ stock met the requirements for listing, and was listed and 2 actively traded on the NASDAQ, a highly efficient and automated market; 3 (b) As a regulated issuer, Electronic Arts filed periodic public reports with the 4 SEC and the NASDAQ; 5 (c) Electronic Arts regularly communicated with public investors via established 6 market communication mechanisms, including through regular disseminations of press releases on 7 the national circuits of major newswire services and through other wide-ranging public disclosures, 8 such as communications with the financial press and other similar reporting services; and 9 (d) Electronic Arts was followed by several securities analysts employed by 10 major brokerage firms who wrote reports, which were distributed to the sales force and certain 11 customers of their respective brokerage firms. Each of these reports was publicly available and 12 entered the public marketplace. 13 82. As a result of the foregoing, the market for Electronic Arts’ securities promptly 14 digested current information regarding Electronic Arts from all publicly available sources and 15 reflected such information in Electronic Arts’ stock price. Under these circumstances, all purchasers 16 of Electronic Arts’ securities during the Class Period suffered similar injury through their purchase 17 of Electronic Arts’ securities at artificially inflated prices and a presumption of reliance applies. 18 CAUSATION AND ECONOMIC LOSS 19 83. During the Class Period, as detailed herein, Defendants engaged in a scheme to 20 deceive the market, and a course of conduct that artificially inflated Electronic Arts’ stock price and 21 operated as a fraud and deceit on Class Period purchasers of Electronic Arts’ stock by 22 misrepresenting the Company’s financial results. During the Class Period Defendants improperly 23 inflated the Company’s financial results, long enough to allow certain Company insiders, including 24 the Individual Defendants named herein, to liquidate over $58 million of their privately held EA 25 stock, while in possession of material adverse non-public information. Ultimately, however, when 26 Defendants’ prior misrepresentations and fraudulent conduct came to be revealed and was apparent 27 to investors, shares of Electronic Arts declined precipitously - - evidence that the prior artificial 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 32 -

1 inflation in the price of Electronic Arts’ shares had existed and then was eradicated when the 2 disclosures were made. As a result of their purchases of Electronic Arts stock during the Class 3 Period, Lead Plaintiffs and other members of the Class suffered economic losses, i.e. damages under 4 the federal securities laws. 5 84. By improperly characterizing the Company’s operational results and misrepresenting 6 its prospects, the Defendants presented a misleading image of Electronic Arts’ business and future 7 growth prospects. During the Class Period, Defendants repeatedly emphasized the ability of the 8 Company to create and market top selling video games for the home and portable video game 9 markets. These claims caused and maintained the artificial inflation in Electronic Arts’ stock price 10 throughout the Class Period and until the truth about the Company was ultimately revealed to 11 investors. 12 85. Defendants’ false and materially misleading statements had the intended effect of 13 causing Electronic Arts’ shares to trade at artificially inflated levels throughout the Class Period - - 14 reaching a Class Period high of over $71.00 per share in early March of 2005. 15 86. On March 21, 2005, however, Defendants revealed that the Company would come 16 nowhere-near achieving the results given in guidance previously sponsored and/or endorsed by 17 Defendants. That day, Defendants reported a huge earnings miss for the fourth fiscal quarter of 2005 18 and revised full year guidance much lower than previous guidance, after announcing that sales of 19 Electronic Arts’ video games were much lower than previously disclosed and when also revealing 20 that Defendants’ use of price protections was much higher than previously disclosed. These belated 21 disclosures had an immediate, adverse impact on the price of Electronic Arts shares. 22 87. These belated revelations also evidenced Defendants’ prior falsification of 23 Electronic Arts’ business prospects due to Defendants’ false statements. As investors and the market 24 ultimately learned, the Company’s prior business prospects had been overstated and its reserves for 25 price protections understated. When this adverse information was revealed to investors, the prior 26 artificial inflation was eliminated from Electronic Arts’ share price and investors were damaged as a 27 result of the related share price decline. 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 33 -

1 88. As a direct result of Defendants’ statements on March 21, 2005, which indicated that 2 that sales of the Company’s video games were well below guidance and price protection reserves 3 had been understated, Electronic Arts’ stock price collapsed by more than $11.00 per share, from 4 above $66.00 per share, to approximately $55.00 per share - - on enormous trading volume of 5 almost 40 million shares traded. This dramatic share price decline eradicated the artificial inflation 6 from Electronic Arts’ share price, causing real economic loss to investors who purchased this stock 7 during the Class Period. In sum, as the truth about Defendants’ fraud and illegal course of conduct 8 became known to investors, and as the artificial inflation in the price of Electronic Arts shares was 9 eliminated, Lead Plaintiffs and the other members of the Class were damaged, suffering an economic 10 loss of at least $11.00 per share. 11 89. The decline in Electronic Arts’ stock price at the end of the Class Period was a direct 12 result of the nature and extent of Defendants’ fraud being revealed to investors and to the market. 13 The timing and magnitude of Electronic Arts’ stock price decline negate any inference that the losses 14 suffered by Lead Plaintiffs and the other members of the Class was caused by changed market 15 conditions, macroeconomic or industry factors or even Company-specific facts unrelated to 16 Defendants’ fraudulent conduct. During the same period in which Electronic Arts’ share price fell 17 almost 17% as a result of Defendants’ fraud being revealed, the Standard & Poor’s 500 securities 18 index was relatively unchanged. The economic loss, i.e. damages suffered by Lead Plaintiffs and 19 other members of the Class, was a direct result of Defendants’ fraudulent scheme to artificially 20 inflate the price of Electronic Arts’ stock and the subsequent significant decline in the value of the 21 Company’s shares when Defendants’ prior misstatements and other fraudulent conduct were 22 revealed. 23 90. In addition to the foregoing, the chart below evidences the artificial inflation in the 24 price of Electronic Arts’ stock during the Class Period, and the dramatic decline in the price of this 25 stock following Defendants’ belated disclosures regarding the 4Q:F05 sales miss, lack of proper 26 reserves and inadequate controls, as follows: 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 34 -

1 Electronic Arts Daily Common Stock Price October 1, 2004 - June 30, 2005 2 $75.00 Class Period 3 1/26/05 - 3/21/05

Daily avg. closing price $70.00 1/26/05 -3/21/05 4 $65.50 5 $65.00 6

3/21/05 $60.00 Co. announces revised 7 estimates for FY Ending 3/31/05. CEO: "Results are clearly disappointing." 8 $55.00 3/22/05 closing price: $55.15 9 1/25/05 $50.00 Q3:F04 results 10 announced. FY 2005 expectations - NI to be $3.27 to 11 $3.3 Billion. $45.00 12

$40.00 13 01-Oct-04 15-Oct-04 29-Oct-04 12-Nov-04 29-Nov-04 13-Dec-04 28-Dec-04 11-Jan-05 26-Jan-05 09-Feb-05 24-Feb-05 10-Mar-05 24-Mar-05 08-Apr-05 22-Apr-05 08-Oct-04 22-Oct-04 05-Nov-04 19-Nov-04 06-Dec-04 20-Dec-04 04-Jan-05 19-Jan-05 02-Feb-05 16-Feb-05 03-Mar-05 17-Mar-05 01-Apr-05 15-Apr-05 29-Apr-05 14 15 FIRST CLAIM For Violations Of Section 10(b) Of 16 The Exchange Act And Rule 10b-5 Promulgated Thereunder, Brought Against All Defendants 17 18 91. Lead Plaintiffs repeat and reiterate the allegations set forth above as though fully set 19 forth herein. This claim is asserted against all Defendants. 20 92. During the Class Period, Defendants carried out a plan, scheme and course of conduct 21 which was intended to and, throughout the Class Period which did: (a) deceive the investing public, 22 including Lead Plaintiffs and other Class members, as alleged herein; (b) artificially inflate and 23 maintain the market price of Electronic Arts’ publicly traded securities; and (c) cause Lead Plaintiffs 24 and other members of the Class to purchase Electronic Arts’ publicly traded securities at artificially 25 inflated prices. In furtherance of this unlawful scheme, plan and course of conduct, Defendants took 26 the actions set forth herein. Defendants are sued as primary participants in the wrongful and illegal 27 conduct charged herein. 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 35 -

1 93. In addition to the duty of full disclosure imposed on Defendants as a result of their 2 making of affirmative statements and reports, or participation in the making of affirmative 3 statements and reports to the investing public, they each had a duty to promptly disseminate truthful 4 information that would be material to investors in compliance with the integrated disclosure 5 provisions of the SEC as embodied in SEC Regulation S-X (17 C.F.R. § 210.01 et seq.), S-K (17 6 C.F.R. § 229.10 et seq.) and other SEC regulations, including accurate and truthful information with 7 respect to Electronic Arts’ operations, financial condition and performance so that the market prices 8 of the Company’s publicly traded securities would be based on truthful, complete and accurate 9 information. 10 94. Defendants, individually and in concert, directly and indirectly, by the use, means or 11 instrumentalities of interstate commerce and/or of the mails, engaged and participated in a 12 continuous course of conduct to conceal adverse material information about the business, business 13 practices, performance, operations and future prospects of Electronic Arts as specified herein. 14 95. The Defendants employed devices, schemes and artifices to defraud, while in 15 possession of material adverse non-public information and engaged in acts, practices, and a course of 16 conduct as alleged herein in an effort to assure investors of Electronic Arts’ value and performance 17 and continued substantial growth, which included the making of, or the participation in the making 18 of, untrue statements of material facts and omitting to state material facts necessary in order to make 19 the statements made about Electronic Arts and its business operations and future prospects in the 20 light of the circumstances under which they were made, not misleading, as set forth more 21 particularly herein. They also engaged in transactions, practices and a course of business which 22 operated as a fraud and deceit upon the purchasers of Electronic Arts’ securities during the Class 23 Period. 24 96. As a result of the dissemination of the materially false and misleading information 25 and failure to disclose material facts, as set forth above, the market prices of Electronic Arts’ 26 securities were artificially inflated during the Class Period. In ignorance of the fact that market 27 prices of Electronic Arts’ publicly traded securities were artificially inflated, and relying directly or 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 36 -

1 indirectly on the false and misleading statements made by Defendants, or upon the integrity of the 2 market in which the securities trade, and/or on the absence of material adverse information that was 3 known to or recklessly disregarded by Defendants but not disclosed in public statements by 4 Defendants during the Class Period, Lead Plaintiffs and the other members of the Class acquired 5 Electronic Arts securities during the Class Period at artificially high prices and were damaged 6 thereby. 7 97. At the time of said misrepresentations and omissions, Lead Plaintiffs and other 8 members of the Class were ignorant of their falsity, and believed them to be true. Had Lead 9 Plaintiffs, the other members of the Class and the marketplace known of the true performance, 10 business practices, future prospects and intrinsic value of Electronic Arts’ securities, which were not 11 disclosed by Defendants, Lead Plaintiffs and other members of the Class would not have purchased 12 or otherwise acquired their Electronic Arts publicly traded securities during the Class Period, or, if 13 they had acquired such securities during the Class Period, they would not have done so at the 14 artificially inflated prices which they paid. 15 98. By virtue of the foregoing, Defendants have each violated Section 10(b) of the 16 Exchange Act, and Rule 10b 5 promulgated thereunder. 17 99. As a direct and proximate result of Defendants’ wrongful conduct, Lead Plaintiffs and 18 the other members of the Class suffered damages in connection with their respective purchases and 19 sales of the Company’s securities during the Class Period. 20 SECOND CLAIM For Violations Of Section 20(a) Of 21 The Exchange Act, Brought Against the Individual Defendants 22 100. Lead Plaintiffs repeat and reiterate the allegations set forth above as if set forth fully 23 herein. This claim is asserted against the Individual Defendants. 24 101. Defendants Jenson and Probst each acted as a controlling person of Electronic Arts 25 within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high 26 level positions in the Company, participation in and/or awareness of the Company’s operations 27 and/or intimate knowledge of the Company’s actual performance, the Individual Defendants had the 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 37 -

1 power to influence and control and did influence and control, directly or indirectly, the decision 2 making of the Company, including the content and dissemination of the various statements which 3 Lead Plaintiffs contend are false and misleading. Each of the Individual Defendants was provided 4 with or had unlimited access to copies of the Company’s reports, press releases, public filings and 5 other statements alleged by Lead Plaintiffs to be misleading prior to and/or shortly after these 6 statements were issued and had the ability to prevent the issuance of the statements or cause the 7 statements to be corrected. 8 102. In addition, each of the Individual Defendants had direct involvement in the day-to- 9 day operations of the Company and, therefore, is presumed to have had the power to control or 10 influence the particular transactions giving rise to the securities violations alleged herein, and 11 exercised the same. 12 103. As set forth above, Electronic Arts and the Individual Defendants each violated 13 Section 10(b) and Rule 10b-5 by their acts and omissions as alleged in this Complaint. By virtue of 14 their controlling positions, the Individual Defendants are liable pursuant to Section 20(a) of the 15 Exchange Act. 16 104. As a direct and proximate result of these Defendants’ wrongful conduct, Lead 17 Plaintiffs and other members of the Class suffered damages in connection with their purchases of the 18 Company’s securities during the Class Period. 19 THIRD CLAIM For Violations Of Section 20A Of 20 The Exchange Act, Brought Against the Individual Defendants 21 105. Plaintiffs repeat and reallege each and every allegation contained above. This claim 22 is asserted against the Individual Defendants. 23 106. Defendants Jenson and Probst, by virtue of their positions as EA Officers, had access 24 to, and were in possession of, material non-public information about EA at the time of their sales of 25 300,000 shares of EA stock for proceeds of $18,885,976 during the Class Period. 26 107. By virtue of their participation in the scheme to defraud investors described herein 27 and their sales of stock while in possession of material non-public information about EA, Defendants 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 38 -

1 Jenson and Probst violated § 10(b) of the Exchange Act and applicable rules and regulations 2 thereunder. 3 108. Defendants Jenson’s sale of 91,700 shares of EA stock on January 28, 2005 and 4 Defendants’ Jenson’s and Probst’s sales of 208,300 shares of EA stock on January 31, 2005 were 5 made contemporaneously with Lead Plaintiff Activest’s purchase of 25,000 shares on January 28, 6 2005, Lead Plaintiff Activest’s purchase of 2,800 shares on February 1, 2005, and Lead Plaintiff 7 Miami Beach Pension Fund’s purchase of 21,000 shares on January 26, 2005. 8 109. Lead Plaintiffs Activest and Miami Beach Pension Fund, as well as all other members 9 of the Class who purchased shares of EA stock contemporaneously with sales of EA stock by 10 Defendants Jenson and Probst: (a) have suffered substantial damages in that, in reliance on the 11 integrity of the market, they paid artificially inflated prices for EA stock as a result of the violations 12 of § 10(b) and Rule 10b-5 herein; and (b) would not have purchased EA securities at the prices they 13 paid, or would not have purchased at all, if they had been aware that the market prices were 14 artificially and falsely inflated by these Defendants’ misleading statements and concealment of 15 material facts. At the time of the purchases by Lead Plaintiffs Activest and Miami Beach, and Class 16 members, the fair market value of the EA securities was substantially less than the price paid for 17 them. 18 REQUEST FOR RELIEF 19 WHEREFORE, Lead Plaintiffs request a judgment, as follows: 20 1. Determining that this action is a proper class action, and certifying Lead Plaintiffs as 21 the class representatives under Rule 23 of the Federal Rules of Civil Procedure; 22 2. Awarding compensatory damages in favor of Lead Plaintiffs and the other Class 23 members against all Defendants, jointly and severally, for all damages sustained as a result of 24 Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon; 25 3. Awarding Lead Plaintiffs and the Class their reasonable costs and expenses incurred 26 in this action, including counsel fees and expert fees; and 27 4. Such other and further relief as the Court may deem just and proper. 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 39 -

1 JURY TRIAL DEMANDED 2 Lead Plaintiffs hereby demand a trial by jury. 3 Dated: August 12, 2005 Respectfully submitted,

4 MILBERG WEISS BERSHAD & 5 SCHULMAN LLP

6 By: /s/ Maya Saxena 7 Jeffrey S. Westerman (SBN 94559) Elizabeth P. Lin (SBN 174663) 8 Kristen McCulloch (SBN 177558) 335 South Grand Avenue 9 Suite 4170 Los Angeles, CA 90071-3172 10 Telephone: (213) 617-1200 Facsimile: (213) 617-1975 11 -and- Maya Saxena (Pro Hac Vice) 12 Christopher S. Jones (Pro Hac Vice) 5200 Town Center Circle 13 Tower One, Suite 600 Boca Raton, FL 33486 14 Telephone: (561) 361-5000 Facsimile: (561) 367-8400 15 COHEN, MILSTEIN, HAUSFELD & 16 TOLL, P.L.L.C. Lisa M. Mezzetti (Pro Hac Vice) 17 Daniel S. Sommers (Pro Hac Vice) 1100 New York Avenue, N.W. 18 Suite 500, West Tower Washington, D.C. 20005 19 Telephone: (202) 408-4600 Facsimile: (202) 408-4699 20 Co-Lead Counsel 21 22 23 24 25 26 27 28 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS Case No. 3:05-cv-1219-MMC - 40 -

1 DECLARATION OF SERVICE

2 I, the undersigned, declare:

3 1. That declarant is and was, at all times herein mentioned, a resident of Broward

4 County, over the age of 18 years, and not a party to or interest in the within action; that 5 declarant’s business address is 5200 Town Center Circle, Suite 600, Boca Raton, Florida, 33486. 6 2. That on August 12, 2005, declarant served the Class Action Complaint for 7 Violations of Federal Securities Laws for filing and uploading to the CM/ECF system. I further 8 9 certify that on the same date, I mailed the foregoing document to counsel of record on the 10 attached Service List.

11 3. That there is a regular communication by mail between the place of mailing and 12 the places so addressed. 13 4. That on the above date, declarant served via e-mail to: [email protected]. 14 I declare under penalty of perjury that the foregoing is true and correct. Executed this 15 th 16 12 day of August, in Boca Raton, Florida. 17 /s/ Maya Saxena Maya Saxena 18 19 20 21 22 23 24 25 26 27 CONSOLIDATED AMENDED COMPLAINT FOR VIOLATIONS OF FEDERAL SECURITIES LAWS 28 Case No. 3:05-cv-1219-MMC - 41 -

1 SERVICE LIST 2 Lisa M. Mezzetti Co-Lead Counsel for the Class 3 Daniel S. Sommers COHEN, MILSTEIN, HAUSFELD & 4 TOLL, P.L.L.C. 1100 New York Avenue, N.W. 5 Suite 500, West Tower Washington, D.C. 20005 6 Telephone: (202) 408-4600 Facsimile: (202) 408-4699 7 8 Jeff S. Westerman Co-Lead Counsel for the Class Elizabeth P. Lin 9 MILBERG WEISS BERSHAD & SCHULMAN LLP 10 355 S. Grand Ave., Suite 4170 Los Angeles, CA 90071-3172 11 Telephone: (213) 617-1200 Facsimile: (213) 617-1975 12 Jan. L. Little Attorneys for Defendants 13 Michael D. Celio KEKER & VAN NEST LLP 14 710 Sansome Street San Francisco, CA 94111-1704 15 Telephone: (415) 391-5400 16 Facsimile: (415) 397-7188

17

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