Segment Information

9 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Information

(14) SEGMENT INFORMATION

Our reporting segment is based upon: our internal organizational structure; the manner in which our operations are managed; the criteria used by our Chief Executive Officer, our Chief Operating Decision Maker (“CODM”), to evaluate segment performance; the availability of separate financial information; and overall materiality considerations. Our CODM currently reviews total company operating results to assess overall performance and allocate resources.

The following table summarizes the financial performance of our current segment operating profit and a reconciliation to our consolidated operating income (loss) for the three and nine months ended December 31, 2015 and 2014 (in millions):

	Three Months Ended December 31,						Nine Months Ended December 31,
	2015			2014			2015			2014
Segment:
Net revenue before revenue deferral	$	1,803		$	1,428		$	3,642		$	3,423
Depreciation	(31		)	(32		)	(91		)	(96		)
Other expenses	(1,014		)	(877		)	(2,463		)	(2,414		)
Segment operating profit	758			519			1,088			913
Reconciliation to consolidated operating income (loss):
Other:
Revenue deferral	(1,579		)	(1,171		)	(3,051		)	(2,829		)
Recognition of revenue deferral	846			869			2,497			2,736
Amortization of intangibles	(14		)	(16		)	(41		)	(49		)
Acquisition-related contingent consideration	—			—			—			2
Stock-based compensation	(42		)	(39		)	(131		)	(108		)
Loss on licensed intellectual property commitment	—			—			—			(122		)
Other expenses	—			—			—			5
Consolidated operating income (loss)	$	(31	)	$	162		$	362		$	548

Our segment profit differs from consolidated operating income primarily due to the exclusion of (1) the deferral of net revenue related to online-enabled games (see Note 8 for additional information regarding deferred net revenue (online-enabled games)), (2) certain non-cash costs such as stock-based compensation, (3) acquisition-related expenses such as amortization of intangibles and acquisition-related contingent consideration, and (4) other significant non-recurring costs that may not be indicative of the company’s core business, operating results or future outlook. Our CODM reviews assets on a consolidated basis and not on a segment basis.

Information about our total net revenue by revenue composition and by platform for the three and nine months ended December 31, 2015 and 2014 is presented below (in millions):

	Three Months Ended December 31,				Nine Months Ended December 31,
	2015		2014		2015		2014
Packaged goods and other	$	501	$	585	$	1,394	$	1,745
Digital	569		541		1,694		1,585
Net revenue	$	1,070	$	1,126	$	3,088	$	3,330

	Three Months Ended December 31,				Nine Months Ended December 31,
	2015		2014		2015		2014
Platform net revenue
Xbox One, PlayStation 4	$	571	$	427	$	1,390	$	1,037
Xbox 360, PlayStation 3	157		306		605		1,157
Other consoles	3		9		6		18
Total consoles	731		742		2,001		2,212
PC / Browser	182		218		619		657
Mobile	128		122		397		368
Other	29		44		71		93
Net revenue	$	1,070	$	1,126	$	3,088	$	3,330

Net revenue from unaffiliated customers in North America and internationally for the three and nine months ended December 31, 2015 and 2014 is presented below (in millions): 

	Three Months Ended December 31,				Nine Months Ended December 31,
	2015		2014		2015		2014
Net revenue from unaffiliated customers
North America	$	448	$	473	$	1,335	$	1,428
International	622		653		1,753		1,902
Net revenue	$	1,070	$	1,126	$	3,088	$	3,330

Long-lived assets in North America and internationally as of December 31, 2015 and March 31, 2015 is presented below (in millions):

	As of December 31, 2015		As of March 31, 2015
Long-lived assets
North America	$	1,725	$	1,809
International	469		474
Total	$	2,194	$	2,283

We attribute net revenue from external customers to individual countries based on the location of the legal entity that sells the products and/or services. Note that revenue attributed to the legal entity that makes the sale is often not the country where the consumer resides. For example, revenue generated by our Swiss legal entities includes digital revenue from consumers who reside outside of Switzerland, including consumers who reside outside of Europe. Revenue generated by our Swiss legal entities during the three and nine months ended December 31, 2015 represented $324 million and $1,045 million, or 30 percent and 34 percent, of our total net revenue, respectively. Revenue generated by our Swiss legal entities during the three and nine months ended December 31, 2014 represented $377 million and $1,012 million, or 33 percent and 30 percent, of our total net revenue, respectively. Revenue generated in the United States represents over 99 percent of our total North America net revenue. There were no other countries with net revenue greater than 10 percent.

During the three months ended December 31, 2015, we estimate that our direct sales to Sony, Microsoft and GameStop represented approximately 15 percent, 11 percent and 10 percent of total net revenue, respectively. During the nine months ended December 31, 2015, we estimate that our direct sales to Sony and Microsoft represented approximately 13 percent and 13 percent of total net revenue, respectively.

Our direct sales to Sony and Microsoft represented approximately 11 percent and 10 percent of total net revenue, respectively, during the three months ended December 31, 2014. Our direct sales to GameStop Corp. represented approximately 12 percent of total net revenue for the nine months ended December 31, 2014.