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• We face development risks and must adapt to changes in software technologies
−Removed: • The development and use of artificial intelligence into our products may present operational and reputational risks
+Added: • The development and use of artificial intelligence ("AI") into our products may present operational and reputational risks
• Increased use of mobile devices for gaming will drive future growth of mobile gaming
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• The continued ability to acquire and maintain license to intellectual property is key
−Removed: • We may experience fluctuations in the recurring portion of our business
+Added: • We may experience declines or fluctuations in the recurring portion of our business
• We are dependent on the timing of our product releases
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• Content policies could negatively affect sales
−Removed: • Entertainment Software Rating Board ratings for our products could negatively affect our ability to distribute and sell
+Added: • ESRB ratings for our products could negatively affect our ability to distribute and sell
• The competitive position and value of our products could be adversely affected by unprotected intellectual property
−Removed: • We have a significant amount of outstanding debt
• The value of our virtual items is highly dependent on how we manage the economies in our games
• There is potential for unauthorized or fraudulent transactions of accounts and virtual items outside of our games
+Added: • We have a significant amount of outstanding debt
Risks related to legal or regulatory compliance
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General Risk Factors
−Removed: • Additional issuances of equity securities would cause dilution and could affect the market price of our common stock
+Added: • Additional issuances or sales of equity securities by us would dilute the ownership of our existing stockholders and could adversely affect the market price of our common stock
• We are subject to risks related to corporate and social responsibility and reputation
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We compete for both licenses to properties and the sale of interactive entertainment software with Sony and Microsoft, each of which is a large developer and marketer of software for its own platforms.
−Removed: We also compete with game publishers, such as Activision Blizzard, Inc., Electronic Arts Inc., Embracer Group AB, Microsoft, Nintendo, Playrix, Playtika, Scopely, Sony, Tencent, and Ubisoft Entertainment S.A.
−Removed: We also face competition from online game developers and distributors who have primarily focused on specific international markets and with high-profile companies with significant online presences with new and expanded mobile gaming offerings, such as Apple, Google, and Microsoft.
+Added: We also compete with game publishers, such as Electronic Arts Inc., Embracer Group AB, Microsoft, Nintendo, Playrix, Playtika, Savvy Games, Sony, Tencent, and Ubisoft Entertainment S.A.
+Added: We also face competition from online game developers and distributors who have primarily focused on
+Added: specific international markets and with high-profile companies with significant online presences with new and expanded mobile gaming offerings, such as Apple, Google, and Microsoft.
In addition, the gaming, technology/Internet, and entertainment industries have converged in recent years and larger, well-funded technology companies are pursuing and strengthening their interactive entertainment capabilities.
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Internationally, local competitors may have a greater brand recognition than us in their local country and a stronger understanding of local culture and commerce.
−Removed: They may also offer their products and services in local languages we not offer.
+Added: They may also offer their products and services in local languages we do not offer.
Additionally, competitors may develop content that imitates or competes with our best-selling games, potentially reducing our sales or our ability to charge the same prices we have historically charged for our products.
−Removed: These competing products may take a larger share of consumer spending than anticipated, which could cause product sales to fall below expectations.
−Removed: Our titles also compete with other forms of entertainment, such as social media, in addition to motion pictures, television and audio and video products featuring similar themes, online computer programs and other entertainment, which may be less expensive or provide other advantages to consumers.
+Added: These competing products may take a larger share of consumer spending than anticipated, which could cause our product sales to fall below expectations.
+Added: Our titles also compete with other forms of entertainment, such as social media, in addition to motion pictures, television, short-form video, and audio and video products featuring similar themes, online computer programs and other entertainment, which may be less expensive or provide other advantages to consumers.
A number of software publishers who compete with us have developed and commercialized or are currently developing online and mobile games.
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Moreover, current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with others, including our current or future business partners or third-party software providers.
−Removed: By doing so, these competitors may increase their scale, their ability to meet the needs of existing or prospective players and compete for
−Removed: similar human capital.
+Added: By doing so, these competitors may increase their scale, their ability to meet the needs of existing or prospective players and compete for similar human capital.
If we are unable to compete effectively, successfully and at a reasonable cost against our existing and future competitors, our results of operations, cash flows and financial condition would be adversely impacted.
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The development and use of artificial intelligence (“AI”) into our products may present operational and reputational risks.
−Removed: The growth of AI technologies in our industry has influenced games production for developers and gaming experience for players.
−Removed: The use of this new and emerging technology, which is in its early stages of commercial use, presents social and ethical issues that may result in legal and reputational harm and liability.
+Added: The growth of AI technologies in our industry has influenced game production for developers and gaming experience for players.
+Added: The use of this new and emerging technology, which is in its early stages of wider-spread commercial use, presents social and ethical issues that may result in legal and reputational harm and liability.
+Added: Any integration of any AI technologies into our products or services may result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality or security risks, ethical concerns, negative user perceptions as to automation and AI, or other complications that could adversely affect our business, reputation, or financial results.
+Added: Uncertainty around new and emerging AI technologies, such as generative AI, may require additional investment in the development of appropriate protections and safeguards for handling the use of data with AI technologies, which may be costly and could increase our expenses.
Further, intellectual property ownership surrounding AI technologies has not been fully addressed by U.S.
courts or other federal or state laws or regulations, and the use or adoption of third-party AI technologies into our products and services may result in exposure to claims of copyright infringement or other intellectual property misappropriation.
+Added: While the impact of AI on our industry is still emerging and uncertain, to the extent our competitors successfully implement AI technologies into their products or services and we fail to adopt AI technologies effectively or experience delays in integrating these technologies into our operations, we may face significant risks to our competitive position, financial performance, and long-term growth prospects.
If the use of mobile devices as game platforms and the proliferation of mobile devices generally do not increase, our business could be adversely affected.
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However, the mobile market, particularly the market for mobile games, may not grow in the way we anticipate.
−Removed: Our future success is substantially dependent upon the continued growth of the market for mobile games.
+Added: future success is substantially dependent upon the continued growth of the market for mobile games.
In addition, we do not currently offer our games on all mobile devices.
−Removed: If the mobile devices on which our games are available decline in popularity or become obsolete faster than anticipated, we could experience a decline in revenue and bookings and may not achieve the anticipated return on our development efforts.
+Added: If the mobile devices on which our games are available decline in popularity or become obsolete faster than anticipated, we could experience a decline in revenue and may not achieve the anticipated return on our development efforts.
Any such declines in the growth of the mobile market or in the use of mobile devices for games could harm our business, financial condition or results of operations.
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The success of our business is subject to the continued popularity of these platforms and our ability to develop commercially successful products for these platforms.
−Removed: We also rely on the availability of an adequate supply of these video game consoles (which sometimes has been negatively affected by supply chain issues) and the continued support for these consoles by their manufacturers, including our ability to reach consumers via the online networks operated by these console manufacturers.
+Added: We also rely on the availability of an adequate supply of these video game consoles (which sometimes has been negatively affected by supply chain issues, and which could be affected by an increase in tariffs on component parts) and the continued support for these consoles by their manufacturers, including our ability to reach consumers via the online networks operated by these console manufacturers.
If the consoles for which we develop new software products or modify existing products do not attain significant consumer acceptance, we may not be able to recover our development costs, which could be significant and may further incur expense to adjust our products and development efforts in response to changing consumer preferences.
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As a result, our business and operating results may be more volatile and difficult to predict during console transitions than during other times.
−Removed: Additionally, we derive a significant portion of our revenue from distribution of our games on the Apple App Store and the Google Play Store, and the virtual items we sell in our games are purchased using the payment processing systems of
−Removed: these platform providers.
+Added: Additionally, we derive a significant portion of our revenue from distribution of our games on the Apple App Store and the Google Play Store, and the virtual items we sell in our games are purchased using the payment processing systems of these platform providers.
In the fiscal year ended March 31, 2025, we derived 92.9% of our mobile revenue on Apple and Google platforms.
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Additionally, in February 2022, Google announced plans to make privacy-focused changes to its Android advertising identifiers after a two-year process, taking into account feedback from developers, regulators and other interested parties.
−Removed: Also, beginning January 2024, Google began requiring publishers and developers using certain Google advertising products to serve ads in the U.K.
+Added: Also, beginning January 2024, Google began requiring
+Added: publishers and developers using certain Google advertising products to serve ads in the U.K.
or European Union ("E.U.") to use a Google certified consent management platform.
−Removed: We are continuing to evaluate how these rules or changes may affect our business, operations and financial results.
+Added: We continue to evaluate how these rules or changes may affect our business, operations and financial results.
In addition, third-party platforms also impose certain file size limitations, which may limit the ability of players to download some of our larger games in over-the-air updates.
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Failure to enter into any such agreement could also seriously hurt our business.
−Removed: In addition, because our products compete with
−Removed: a vast array of other interactive entertainment software products that also are available on these hardware platforms, a hardware platform manufacturer may give priority to those competing products.
+Added: In addition, because our products compete with a vast array of other interactive entertainment software products that also are available on these hardware platforms, a hardware platform manufacturer may give priority to those competing products.
In addition, platform providers, such as Sony and Microsoft, control the networks over which consumers purchase digital products and services for their platforms and through which we provide online game capabilities for our products.
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The supply chain of hardware needed to maintain this technological infrastructure has been disrupted and geopolitical events, including the Russia-Ukraine war and the Israel-Hamas war and any indirect effects may further complicate existing supply chain constraints.
−Removed: All information technology systems and networks are potentially vulnerable to damage or interruption from a variety of sources, including but not limited to cyberattacks, computer viruses, malicious software, security breaches, energy blackouts, natural disasters, terrorism, war, and telecommunication failures.
+Added: All information technology systems and networks are potentially vulnerable to damage or interruption from a variety of sources, including but not limited to cyberattacks, computer viruses, malicious software, security breaches, energy blackouts, natural disasters, terrorism, war, and telecommunication or other critical infrastructure failures.
We securely store the source code for our interactive entertainment software products as it is created.
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If we or these third parties are subject to data security breaches, we may have a loss in sales or increased costs arising from the restoration or implementation of additional security measures which could materially and adversely affect our business, financial condition, and operating results.
−Removed: Any theft and/or unauthorized use or publication of our trade secrets and other confidential business information because of such an event could adversely affect our competitive position, reputation,
−Removed: brand, and future sales of our products.
+Added: Any theft and/or unauthorized use or publication of our trade secrets and other confidential business information because of such an event could adversely affect our competitive position, reputation, brand, and future sales of our products.
Our business could be subject to significant disruption, and we could suffer monetary and other losses and reputational harm, in the event of such incidents and claims.
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In connection with this activity (the “Cybersecurity Incident”), we have incurred certain immaterial incremental one-time costs related to consultants, experts and data recovery efforts and expect to incur additional costs related to cybersecurity protections in the future.
−Removed: We have implemented and will continue to implement a variety of measures to enhance further our cybersecurity protections.
+Added: implemented and will continue to implement a variety of measures to enhance further our cybersecurity protections.
See “ Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Cybersecurity Incident ” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023 for further discussion.
−Removed: Our software supply chain may also be subject to attacks, which would result in future security incidents and breaches.
+Added: Our software supply chain may also be subject to attacks, which may result in future security incidents and breaches.
Information technology system disruptions, network failures, or security breaches (including the Cybersecurity Incident and similar incidents) have negatively affected, and in the future could negatively affect our business continuity, operations, financial results, and the reliability and stability of our products and services.
These risks extend to the networks and e-commerce sites of console platform providers and other partners who sell or host our content online.
−Removed: The risk of such threats is heightened by events outside of our control, such as the extended period of remote work arrangements due to COVID-19, the Russia-Ukraine war and the Israel-Hamas war.
−Removed: The risk could also be affected by events within our control, such as the migration of data among data centers and to third-party hosted environments, and the performance of upgrades and maintenance on our systems.
+Added: The risk of such threats is heightened by events outside of our control, such as the extended period of remote work arrangements, the Russia-Ukraine war and the Israel-Hamas war.
+Added: The risk could also be affected by events substantially within our control, such as the migration of data among data centers and to third-party hosted environments, and the performance of upgrades and maintenance on our systems.
Along with our partners, we have expended, and expect to continue to expend, financial and operational resources to implement certain systems, processes, and technologies to guard against cyber risks and to help protect our data and systems.
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In addition, the costs to respond to, mitigate, or notify affected parties of cyberattacks and other security vulnerabilities are significant.
−Removed: Failures to prevent or mitigate security breaches or cyber risks, or detect or respond adequately to a security breach or cyber risk, could result in a loss of anticipated revenue, interruptions to our products and services, our having to incur significant remediation and notification costs, a degradation of the user experience, causing consumers to lose confidence in our products and services, prompting regulatory inquiries and significant legal and financial costs.
−Removed: Additionally, applicable insurance policies may be insufficient to reimburse us for all such losses, and it is uncertain whether we will be able to maintain the current level of insurance coverage in the future on reasonable terms or at all.
−Removed: Successful exploitation of our systems can have other negative effects upon the products, services and user experience we offer.
+Added: Failures to prevent or mitigate security breaches or cyber risks, or detect or respond adequately to a security breach or cyber risk, could result in a loss of anticipated revenue, interruptions to our products and services, our having to incur significant remediation and notification costs, a degradation of the user experience, causing consumers to lose confidence in our products and services, and thereby harming our reputation, prompting regulatory inquiries and significant legal and financial costs.
+Added: Additionally, applicable insurance policies may be insufficient to reimburse us for all such losses, and it is uncertain whether we will be able to maintain the current level of insurance coverage in the future on commercially reasonable terms or at all.
+Added: Successful exploitation of any vulnerabilities in our systems can have other negative effects upon the products, services and user experience we offer.
In particular, the virtual economies that we have established in many of our games are subject to abuse, exploitation and other forms of fraudulent activity that can negatively affect our business.
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These kinds of activities and the steps that we take to address and prevent these issues may result in a loss of anticipated revenue, interfere with players’ enjoyment of a balanced game environment and cause reputational harm.
−Removed: Our business could be adversely affected if our consumer data protection measures are not seen as adequate or there are breaches of our security measures or unintended disclosures of our consumer data.
−Removed: We are collecting and storing consumer information, including personal information.
−Removed: We take measures to protect our consumer information from unauthorized access or disclosure.
−Removed: It is possible that our security controls over consumer information may not prevent the improper access or disclosure of personal information.
+Added: Our business could be adversely affected if our consumer data protection measures are not seen as adequate or there are breaches of our security measures or unintended disclosures of consumer data.
+Added: We collect and store consumer information, including personal information.
+Added: We take measures to protect the consumer information we hold from unauthorized access or disclosure.
+Added: It is possible that our security controls over consumer information may not prevent the improper access to, use of, or disclosure of personal information.
In addition, due to the high-profile nature of our products, we may draw a disproportionately higher amount of attention and attempts to breach our security controls than companies with lower profile products.
−Removed: A security incident, such as the Cybersecurity Incident, that leads to disclosure of consumer information (including personal information) could harm our reputation, compel us to comply with disparate breach notification laws in various jurisdictions and otherwise subject us to liability under laws that protect personal information, any of which could result in increased costs or loss of revenue.
+Added: A security incident, such as the Cybersecurity Incident, that leads to disclosure of consumer information (including personal information) could harm our reputation, compel us to comply with disparate breach notification laws in various locations and otherwise subject us to liability under laws that protect personal information, any of which could result in increased costs or loss of revenue.
A resulting perception that our products or services do not adequately protect personal information could result in a loss of current or potential consumers and business partners.
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The ability of our products to enable this functionality, and our ability to offer content through a video game platform's digital distribution channel, is dependent upon the continued operation and security of such platform's online network.
−Removed: These third-party networks, as well as our own internal systems and websites, and the related security measures may be breached as a result of third-party action, including intentional misconduct by computer hackers, employee error, malfeasance or otherwise, and result in someone obtaining unauthorized access to our customers' information or our data, including our intellectual property and other confidential business information, or our information technology systems.
+Added: These third-party networks, as well as our own internal systems and
+Added: websites, and the related security measures may be breached as a result of third-party action, including intentional misconduct by computer hackers, employee error, malfeasance or otherwise, and result in someone obtaining unauthorized access to our customers' information or our data, including our intellectual property and other confidential business information, or our information technology systems.
Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
+Added: Compounding these risks, as artificial intelligence capabilities develop rapidly, individuals or groups of hackers and sophisticated organizations, may use these technologies to create new sophisticated attack methods that are increasingly automated, targeted, coordinated, and more difficult to defend against.
Further, the risk of such a breach may be heightened by world events, such as the Russia-Ukraine war and the Israel-Hamas war.
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We are subject to risks associated with the collaborative online features in our games which allow consumers to post narrative comments, in real time, that are visible to other consumers.
−Removed: From time to time, objectionable and offensive or
−Removed: potentially dangerous consumer content may be posted to a gaming or other site with online chat features or game forums which allow consumers to post comments.
+Added: From time to time, objectionable and offensive or potentially dangerous consumer content may be posted to a gaming or other site with online chat features or game forums which allow consumers to post comments.
We have been and may be subject to lawsuits, governmental inquiries and regulation or restrictions, and consumer backlash (including decreased sales and harmed reputation), as a result of consumers posting offensive content.
−Removed: We may also be subject to consumer backlash from comments made in response to postings we make on social media sites such as Facebook, YouTube and Twitter.
+Added: We may also be subject to consumer backlash from comments made in response to postings we make on social media sites such as Facebook, YouTube and X.
If we fail to appropriately respond to the dissemination of such content, our players may not engage with our products and services and/or may lose confidence in our brands, and our financial results may be adversely affected.
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Due to the limited availability of third-party software developers and the limited control that we exercise over them, these developers may not be able to complete titles for us on a timely basis or within acceptable quality standards, if at all.
−Removed: We have entered into agreements with third parties to acquire the rights to publish and distribute interactive entertainment software as well as to use licensed intellectual properties in our titles.
+Added: We have entered into
+Added: agreements with third parties to acquire the rights to publish and distribute interactive entertainment software as well as to use licensed intellectual properties in our titles.
These agreements typically require us to make development payments, pay royalties, and satisfy other conditions.
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We derive revenues from advertisements and offers that are incorporated into our free-to-play games through relationships with third parties.
−Removed: If we are unable to continue to compete for these advertisements and offers, or if any events occur that negatively impact our relationships with advertisers, our advertising revenues and operating results would be negatively impacted.
+Added: If we are unable to continue to compete for these advertisements and offers, or if any events occur that negatively impact our relationships with advertisers, such as adverse litigation, regulatory investigations, federal or state legislation that requires more device settings to opt-out of advertising, analytics, data sharing with third party services or other changes made by these third parties, our advertising revenues and operating results would be negatively impacted.
We derive revenue from advertisements and offers we serve to players.
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Many large companies, such as Amazon, Facebook and Google, invest significantly in data analytics to make their websites and platforms more attractive to advertisers.
−Removed: For our advertising business to continue to succeed, we need to continue to demonstrate the reach of our player network and success of
−Removed: our advertising partners.
+Added: For our advertising business to continue to succeed, we need to continue to demonstrate the reach of our player network and success of our advertising partners.
If our relationship with any advertising partners terminates for any reason, or if the commercial terms of our relationships are changed or do not continue to be renewed on favorable terms, we would need to qualify new advertising partners, which could negatively impact our revenues, at least in the short term.
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In addition, Internet-connected devices and operating systems controlled by third parties increasingly contain features that allow device users to disable functionality that allows for the delivery of targeted advertising on their devices.
−Removed: Device and browser manufacturers may include or expand these features as part of their standard device specifications.
+Added: Device and browser manufacturers may include or expand these features as part of their standard device specifications, and state or federal regulators may mandate more user settings to limit targeted advertising, analytics, or other data sharing with third parties.
For example, Apple previously created a proprietary identifier-for-advertisers, which simplifies the process for Apple users to opt out of certain types of advertising.
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to use a Google-certified consent management platform.
+Added: There has also been a significant increase of litigation related to data sharing with third parties, including advertising partners.
+Added: This has driven
+Added: a need for more specific consent from users for sharing of their personal information, user interaction, and video viewing information with third parties, and it could lead to additional changes from our third party advertising and analytics partners.
If users do not elect to participate in functionality that supports the delivery of targeted advertising on their devices, our ability to deliver effective advertising campaigns on behalf of our advertisers could suffer, which could cause our business, financial condition, or results of operations to suffer.
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If we acquire or invest in other businesses, intellectual properties, or other assets, we may be unable to integrate them with our business, our financial performance may be impaired and/or we may not realize the anticipated financial and strategic goals for such transactions.
−Removed: If appropriate opportunities present themselves, we may acquire or make investments in businesses, intellectual properties and other assets that we believe are strategic, such as our acquisition of Zynga and our pending acquisition of Gearbox.
+Added: If appropriate opportunities present themselves, we may acquire or make investments in businesses, intellectual properties and other assets that we believe are strategic, such as our acquisitions of Zynga and Gearbox.
We may not be able to identify, negotiate or finance any future acquisition or investment successfully.
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Our stockholders may not have the opportunity to review, vote on or evaluate future acquisitions or investments.
+Added: In addition to acquisitions, we have divested and may in the future make additional divestments of certain products and services, including by shutting down studios, that no longer fit our long-term strategies.
+Added: Divestitures may adversely impact our business, operating results, and financial condition if we are unable to achieve the anticipated benefits or cost savings from such divestitures, or if we are unable to offset impacts from the loss of revenue associated with the divested product lines or technologies.
+Added: In connection with these divestitures and other cost-optimization efforts, we have experienced several rounds of layoffs in the recent past, which could negatively affect our reputation and our ability to recruit new employees in the future.
+Added: Any future layoffs could similarly harm our reputation and hinder our recruitment efforts.
We face risks from our international operations.
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In either the U.S.
−Removed: or other countries, trade legislation, such as a change in the current tariff structures, import/export compliance laws, a change in the relationship between either us or the U.S.
+Added: or other countries, trade legislation, such as a change in or volatility around the current tariff structures, import/export compliance laws, a change in the relationship between either us or the U.S.
and any country in which we have significant operations or sales, or other trade laws or policies, could adversely affect our ability to sell or to distribute in international markets.
+Added: In particular, as of the date of this Annual Report on Form 10-K, discussions remain ongoing in respect of certain trade restrictions and tariffs on imports from Canada, China, and Mexico, as well as retaliatory tariffs enacted in response to such actions.
+Added: In light of these events, there continues to exist significant uncertainty about the future relationship between the U.S.
+Added: and other countries with respect to such trade policies, treaties, and tariffs.
+Added: These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S.
+Added: Any of these factors could depress economic activity and restrict our access to potential partners, suppliers or other third parties we seek to do business with and, in turn, have a material adverse effect on the business and financial condition of such third parties, which in turn would negatively impact us.
Additionally, cultural differences may affect consumer preferences and as a result, some of our hit products may not sell as well as they do in the U.S.
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China has also enacted a new privacy law that may affect how we structure our business and process of personal information.
−Removed: We are subject to a variety of laws in the U.S.
−Removed: and abroad that affect our business, including state and federal laws regarding consumer protection, electronic marketing, protection of minors, data protection and privacy, competition, taxation,
−Removed: intellectual property, export, and national security, which are continuously evolving and developing.
+Added: We are subject to a variety of laws and executive orders in the U.S.
+Added: and abroad that affect our business, including state and federal laws regarding consumer protection, electronic marketing, protection of minors, data protection and privacy, competition, taxation, intellectual property, export, and national security, which are continuously evolving and developing.
The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly laws outside the U.S.
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In many foreign countries, particularly in those with developing economies, it may be common to engage in business practices that are prohibited by U.S.
−Removed: laws and regulations, such as the Foreign Corrupt Practices Act, and by local laws, such as laws prohibiting corrupt payments to government officials.
+Added: and international laws and regulations, such as the Foreign Corrupt Practices Act, the U.K.
+Added: Bribery Act, and by local laws, such as laws prohibiting corrupt payments to government officials.
Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees, agents, representatives, business partners, and third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector in order to influence official action, direct business to any person, gain any improper advantage, or obtain or retain business.
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(the "Trade and Cooperation Agreement"), which took effect on May 1, 2021.
−Removed: There remains unavoidable uncertainties and risks to our business related to Brexit and the new relationship between the U.K.
−Removed: and E.U., which will continue to be developed and defined.
−Removed: We are seeking to mitigate those risks with operational and commercial changes to the extent possible and warranted.
−Removed: However, the legal and regulatory landscape remains uncertain, and we have no assurance that such actions will enable us to avoid a material adverse impact on our business from Brexit.
−Removed: Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K.
−Removed: determines which E.U.
−Removed: laws to replace and replicate.
The effects of the U.K.'s future trade agreements with the E.U.
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We rely upon third-party digital delivery platforms, such as Microsoft's Xbox Live, PlayStation Network, Steam, Epic, and other third-party service providers, to provide connectivity from the consumer to our digital products and our online services.
−Removed: Connectivity issues could prevent customers from accessing this content and our ability to successfully market and sell
−Removed: our products could be adversely affected.
+Added: Connectivity issues could prevent customers from accessing this content and our ability to successfully market and sell our products could be adversely affected.
Given the increasing global usage of online platforms, the risks of connectivity issues may be heightened.
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Such issues also could affect our ability to provide game-related services and could have a material adverse effect on our business, financial condition, and operating results.
−Removed: Events such as limited hardware failure, any broad-based catastrophic server malfunction, a significant intrusion by hackers that circumvents security measures, or a failure of disaster recovery services would likely interrupt the functionality of our games with online services and could result in a loss of sales for games and related services.
+Added: Events such as limited hardware failure, any broad-based catastrophic server malfunction, extended power outages or failure for any reason of telecommunications or other critical infrastructure, a significant intrusion by hackers that circumvents security measures, or a failure of disaster recovery services would likely interrupt the functionality of our games with online services and could result in a loss of sales for games and related services.
An extended interruption of service could materially adversely affect our business, financial condition and operating results.
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If we underestimate the amount of server capacity our business requires, if our business were to grow more quickly than expected, or if Internet bandwidth becomes limited, our consumers may experience service problems, such as slow or interrupted gaming access.
−Removed: Insufficient server capacity may result in decreased sales, a loss of our consumer base and adverse consequences to our reputation.
+Added: Insufficient server capacity may result in decreased sales, a loss of our consumer base and adverse consequences to our
Conversely, if we overestimate the amount of server capacity required by our business, we may incur additional operating costs.
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In such an event, the technological reliability and stability of our products and services could be below our standards and the standards of our players and our reputation, brand and sales could be adversely affected.
−Removed: In addition, we could be required to, or may find it necessary to, offer a refund for the product or service, suspend the availability
−Removed: or sale of the product or service or expend significant resources to cure the defect, bug or error each of which could significantly harm our business and operating results.
+Added: In addition, we could be required to, or may find it necessary to, offer a refund for the product or service, suspend the availability or sale of the product or service or expend significant resources to cure the defect, bug or error each of which could significantly harm our business and operating results.
Our ability to acquire and maintain licenses to intellectual property, especially for sports titles, affects our revenue and profitability.
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The release of a hit title typically leads to a high level of sales during the first few months after introduction followed by a rapid decline in sales.
−Removed: In addition, the interactive entertainment industry is highly seasonal, with sales typically higher during the fourth calendar quarter, due primarily to increased demand for games during the holiday season.
+Added: In addition, the interactive entertainment industry is highly seasonal, with sales typically higher during the fourth calendar quarter, primarily due to increased demand for games during the holiday season.
Demand for and sales of titles in our NBA 2K series are also seasonal in that they are typically released just prior to the start of the NBA season.
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Due to this dependence on a limited number of franchises, the failure to achieve anticipated results by one or more products based on these franchises could negatively impact our business.
−Removed: Additionally, if the popularity of a franchise declines, as has happened in the past with other
−Removed: popular franchises, we may have to write off the unrecovered portion of the underlying intellectual property assets, which could negatively impact our business.
+Added: Additionally, if the popularity of a franchise declines, as has happened in the past with other popular franchises, we may have to write off the unrecovered portion of the underlying intellectual property assets, which could negatively impact our business.
We are dependent on the future success of our Grand Theft Auto products, and we must continue to publish hit titles or sequels to such hit titles in order to compete successfully in our industry.
4 unchanged sentences
Hit products offered by our competitors may take a larger share of consumer spending than we anticipate, which could cause revenue generated from our products to fall below our expectations.
−Removed: If our competitors develop more successful products or services at lower price points or based on payment models perceived as offering better value, or if we do not continue to develop consistently high quality and well-received products and services, our revenue and profitability may decline.
+Added: If our competitors develop more successful products or services at lower price points or based on
+Added: payment models perceived as offering better value, or if we do not continue to develop consistently high quality and well-received products and services, our revenue and profitability may decline.
In addition, both the online and mobile games marketplaces are characterized by frequent product introductions, relatively low barriers to entry, and new and evolving business methods, technologies and platforms for development.
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A substantial portion of our product sales are made to a limited number of customers.
−Removed: Sales to our five largest customers during the fiscal year ended March 31, 2024 accounted for 79.8% of our net revenue, with Sony, Apple, Google, and Microsoft each accounting for more than 10.0%.
+Added: Sales to our five largest customers during the fiscal year ended March 31, 2025 accounted for 81.0% of our net revenue, with Apple, Sony, Google, and Microsoft each accounting for more than 10.0%.
Our sales are made primarily without long-term agreements or other commitments, and our customers may terminate their relationship with us at any time.
13 unchanged sentences
An increase in the number of lawsuits filed by the families of victims of violence may trigger supplemental governmental scrutiny, damage our reputation, and negatively affect the sale of our products.
−Removed: Further, in 2019, the World Health Organization included "gaming disorder" in the 11th revision of the International Classification of Diseases, leading some to consider legislation and policies aimed at addressing this issue, and, more recently prompting lawsuits against many in the industry, including us.
+Added: Further, in 2019, the World Health Organization included "gaming disorder" in the 11th revision of the International Classification of Diseases, leading some to consider legislation and policies aimed at addressing this issue, and, more recently prompting lawsuits against many in
+Added: the industry, including us.
In addition, public dialogue concerning interactive entertainment may have an adverse impact on our reputation and our customers' willingness to purchase our products.
−Removed: We submit our products for rating by the Entertainment Software Rating Board ("ESRB") in the United States and other voluntary or government ratings organizations in foreign countries.
+Added: We submit our products for rating by the ESRB in the U.S.
+Added: and other voluntary or government ratings organizations in foreign countries.
Failure to obtain a target rating for certain of our products could negatively affect our ability to distribute and sell those games, as could the re-rating of a game for any reason.
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Certain other countries have also established content rating systems as prerequisites for product sales in those countries.
−Removed: In addition, certain stores use other ratings systems, such as Apple’s use of its proprietary “App Rating System” and Google Play’s use of the International Age Rating Coalition (“IARC”) rating system.
+Added: In addition, certain stores use other ratings systems, such as Apple’s use of its proprietary “App Rating System” and Google Play’s use of the IARC rating system.
If we are unable to obtain the ratings we have targeted for our products, it could have a negative impact on our business.
In some instances, we may be required to modify our products to meet the requirements of the rating systems, which could delay or disrupt the release of any given product or may prevent its sale altogether in certain territories.
−Removed: Further, if one of our games is re‑rated for any reason, a ratings
−Removed: organization could require corrective actions, which could include a recall, retailers could refuse to sell it and demand that we accept the return of any unsold or returned copies or consumers could demand a refund for copies previously purchased.
+Added: Further, if one of our games is re‑rated for any reason, a ratings organization could require corrective actions, which could include a recall, retailers could refuse to sell it and demand that we accept the return of any unsold or returned copies or consumers could demand a refund for copies previously purchased.
Additionally, retailers may decline to sell interactive entertainment software containing what they judge to be graphic violence or sexually explicit material or other content that they deem inappropriate for their businesses, whether because a product received a certain rating by the ESRB or other content rating system, or otherwise.
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Nonetheless, our software is susceptible to piracy and unauthorized copying, and third parties may potentially exploit or misappropriate our intellectual property and proprietary information, causing significant reputational damage.
−Removed: Unauthorized third parties, for example, may be able to copy or to reverse engineer our software to obtain and use programming or production techniques that we regard as proprietary.
+Added: Unauthorized third parties, for example, may be able to copy
+Added: or to reverse engineer our software to obtain and use programming or production techniques that we regard as proprietary.
Well organized piracy operations have also proliferated in recent years, resulting in the ability to download pirated copies of our software over the Internet.
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This may lead to lost revenues from paying consumers or increased cost of developing technological measures to respond to these, either of which could negatively affect our business.
−Removed: We have a significant amount of outstanding indebtedness, and may incur other indebtedness in the future, all of which may adversely affect our financial condition and future financial results.
−Removed: As of March 31, 2024, we had $3,050.0 aggregate principal amount of outstanding senior notes ("Senior Notes") and a $500.0 revolving credit facility under the 2022 Credit Agreement with no outstanding borrowings.
−Removed: (Refer to Note 11 – Debt to our Consolidated Financial Statements, herein.)
−Removed: As our outstanding Senior Notes mature, we will have to expend significant resources to either repay or refinance such notes.
−Removed: If we decide to refinance our Senior Notes, we may be required to do so on different or less favorable terms or we may be unable to refinance such notes at all, either of which may adversely affect our financial condition.
−Removed: Our current or future levels of indebtedness may adversely affect our financial condition and future financial results by, among other things:
−Removed: • increasing our vulnerability to adverse changes in general economic, industry and competitive conditions;
−Removed: • requiring the dedication of a greater than expected portion of our expected cash from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for general corporate purposes, including capital expenditures and acquisitions;
−Removed: • limiting our flexibility in planning for, or reacting to, changes in our business and our industry.
−Removed: We are required to comply with the covenants set forth in the indentures governing our outstanding indebtedness, including our Senior Notes, Convertible Notes, and 2022 Credit Agreement.
−Removed: Our ability to comply with these covenants may be
−Removed: affected by events beyond our control.
−Removed: If we breach any of the covenants and do not obtain a waiver from the holders of our indebtedness or the lenders under the 2022 Credit Agreement, then, subject to applicable cure periods, any outstanding indebtedness may be declared immediately due and payable.
−Removed: Further, these covenants may limit our ability to take various actions, including incurring additional debt, paying dividends, repurchasing shares, and acquiring or disposing of assets or businesses.
−Removed: Accordingly, we may be restricted from taking actions that we believe would be desirable and in the best interest of us and our stockholders.
−Removed: In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidity of our securities.
−Removed: Downgrades in our credit ratings could also restrict our ability to obtain additional financing in the future and could affect the terms of any such financing.
The value of our virtual items is highly dependent on how we manage the economies in our games.
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We periodically encounter such issues and expect to continue to do so.
−Removed: We have banned players as a result of such activities.
+Added: We have banned players as a
+Added: result of such activities.
We have also issued DMCA notices and filed lawsuits against third parties attempting to “sell” game accounts and virtual items from our games outside of our games.
1 unchanged sentence
However, there can be no assurance that our efforts to detect, prevent or minimize these unauthorized or fraudulent transactions will be successful and that these actions will not increase over time.
+Added: We have a significant amount of outstanding indebtedness, and may incur other indebtedness in the future, all of which may adversely affect our financial condition and future financial results.
+Added: As of March 31, 2025, we had $3,650.0 aggregate principal amount of outstanding senior notes ("Senior Notes") and a $750.0 revolving credit facility under that certain Credit Agreement, dated as of May 23, 2022 (as amended, the "2022 Credit Agreement") with no outstanding borrowings.
+Added: (Refer to Note 11 – Debt to our Consolidated Financial Statements, herein.)
+Added: As our outstanding Senior Notes mature, we will have to expend significant resources to either repay or refinance such notes.
+Added: If we decide to refinance our Senior Notes, we may be required to do so on different or less favorable terms or we may be unable to refinance such notes at all, either of which may adversely affect our financial condition.
+Added: Our current or future levels of indebtedness may adversely affect our financial condition and future financial results by, among other things:
+Added: • increasing our vulnerability to adverse changes in general economic, industry and competitive conditions;
+Added: • requiring the dedication of a greater than expected portion of our expected cash from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for general corporate purposes, including capital expenditures and acquisitions;
+Added: • limiting our flexibility in planning for, or reacting to, changes in our business and our industry.
+Added: We are required to comply with the covenants set forth in the indentures governing our outstanding indebtedness, including our Senior Notes, Convertible Notes, and 2022 Credit Agreement.
+Added: Our ability to comply with these covenants may be affected by events beyond our control.
+Added: If we breach any of the covenants and do not obtain a waiver from the holders of our indebtedness or the lenders under the 2022 Credit Agreement, then, subject to applicable cure periods, any outstanding indebtedness may be declared immediately due and payable.
+Added: Further, these covenants may limit our ability to take various actions, including incurring additional debt, paying dividends, repurchasing shares, and acquiring or disposing of assets or businesses.
+Added: Accordingly, we may be restricted from taking actions that we believe would be desirable and in the best interest of us and our stockholders.
+Added: In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidity of our securities.
+Added: Downgrades in our credit ratings could also restrict our ability to obtain additional financing in the future and could affect the terms of any such financing.
Risks related to legal or regulatory compliance
3 unchanged sentences
Although certain jurisdictions have implemented laws and regulations intended to prevent Internet service providers from discriminating against particular types of legal traffic on their networks, other jurisdictions may lack such laws and regulations or repeal existing laws or regulations.
−Removed: For example, on December 14, 2017, the Federal Communications Commission voted to repeal net neutrality regulations in the U.S., and, following that decision, several states enacted net neutrality regulations.
+Added: In 2024, the Federal Communications Commission's efforts to reinstate net neutrality regulations in the U.S.
+Added: were blocked by the Sixth Circuit Court of Appeals.
+Added: Notwithstanding that decision, several states have enacted net neutrality regulations.
Given uncertainty around these rules, including changing interpretations, amendments, or repeal, coupled with the potentially significant political and economic power of local Internet service providers and the relatively significant level of Internet bandwidth access our products and services require, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expenses, or otherwise negatively affect our business.
1 unchanged sentence
Companies and governmental agencies could block access to, impose restrictions on or require a license for any platform, our website or mobile applications for a number of reasons such as security or confidentiality concerns or regulatory reasons which may include, among other things, governmental restrictions on certain content in a particular country, requirements to establish a local presence in a particular jurisdiction, and a requirement that player information be stored on servers in a country within which we operate.
−Removed: Companies may also adopt policies that prohibit employees from accessing Apple, Google, Facebook and our website or any social platform.
+Added: may also adopt policies that prohibit employees from accessing Apple, Google, Facebook and our website or any social platform.
If companies or governmental entities block or limit such or otherwise adopt policies restricting players from playing our games, our business could be negatively impacted and could lead to the loss or slower growth of our player base.
2 unchanged sentences
As a global company, we are subject to a variety of regulations and laws in the U.S.
−Removed: and abroad, including regarding consumer protection (including the use of prepaid cards, online safety, and the protection of minors), subscriptions, advertising, electronic marketing, privacy (including verified parental consent and age assurance), biometrics, cybersecurity, data protection and data localization requirements, AI, online services, online gaming, anti-competition, freedom of speech, labor, real estate, taxation, escheatment, intellectual property ownership and infringement, tax, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing.
+Added: and abroad, including regarding consumer protection (including the use of prepaid cards, online safety, and the protection of minors), subscriptions, advertising, electronic marketing, privacy (including verified parental consent and age assurance), biometrics, cybersecurity, data protection and data localization requirements, AI, online services, online gaming, anti-competition, freedom of speech, labor, real estate, taxation, social media and content moderation, escheatment, intellectual property ownership and infringement, tax, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing.
The scope and interpretation of the laws that are or may be applicable to us, which in some cases can be enforced by private parties in addition to government entities and regulatory bodies, are often uncertain and may be conflicting, particularly laws outside the U.S., and compliance with laws, regulations, codes of practice, and similar requirements may be burdensome and expensive.
−Removed: Laws and regulations may be inconsistent from jurisdiction to jurisdiction, which may increase the cost of compliance and doing business and expose us to possible litigation, penalties or fines, which in ascertain circumstances can be linked to a percentage of our global turnover.
+Added: Laws and regulations may be inconsistent, or even contradictory, from jurisdiction to jurisdiction, which may increase the cost of compliance and doing business and expose us to possible litigation, penalties or fines, which in certain circumstances can be linked to a percentage of our global turnover.
Any changes which we may introduce to our games in order to comply with these laws, regulations, codes of practice, and similar requirements, could make our games less attractive to our players, or cause us to change or limit our ability to sell our products in certain jurisdictions.
−Removed: We have policies and procedures designed to ensure compliance with applicable laws and regulations, but we cannot assure you that we will not be deemed to have violated any such laws and regulations.
+Added: We have policies and procedures designed to ensure compliance with applicable laws and regulations, but we cannot assure that we will not be deemed to have violated any such laws and regulations.
Several proposals have been made for federal legislation to regulate our industry.
3 unchanged sentences
In the U.S., proposals have also been made by numerous state legislators to regulate and prohibit the sale of interactive entertainment software products containing certain types of violent or sexual content to audiences under the ages of 17 or 18, such as the State of California's "ultraviolent video games law" that sought to ban the sale or rental of violent video games to minors.
−Removed: While such legislation to date has been enjoined by industry and retail groups or been found unconstitutional, the adoption into law of such legislation in federal and/or in state jurisdictions in which we do significant business could severely limit the retail market for some of our games.
−Removed: In addition, there are ongoing academic, political and regulatory discussions in the U.S., Europe, Middle East, Asia, Australia, Brazil and other jurisdictions regarding whether certain game genres, such as social casino, or certain game mechanics, such as “loot boxes,” should be subject to a higher level or different type of regulation than other game genres or mechanics to protect consumers, in particular minors and vulnerable adults, and, if so, what such regulation should include.
−Removed: new regulations are imposed, or other regulations are interpreted to apply to our social casino games or certain game mechanics, certain, or all, of our casino-themed games and games that include such game mechanics may become subject to such rules and regulations and expose us to civil and criminal penalties if we do not comply.
−Removed: Additionally, in July 2023, the trade body, the U.K.
−Removed: Interactive Entertainment Association, published industry guidance on loot boxes which is designed to address the concerns raised by the government in its response to a 2020 call for evidence into loot boxes and gambling like behavior.
−Removed: The guidance provides for a twelve-month implementation period.
−Removed: In addition, in Australia, the Guidelines for the Classification of Computer Games 2023 which are set to go into effect late 2024 would limit games containing “simulated gambling” features to adults aged 18 and over, and require games that do not contain simulated gambling, but which contain loot boxes, to be rated M (Mature), meaning they would only be recommended as being suitable for players aged 15 and over.
+Added: While such legislation to date has been enjoined by legal action of industry and retail groups or been found unconstitutional, the adoption into law of such legislation in federal and/or in state jurisdictions in which we do significant business could severely limit the retail market for some of our games.
+Added: In addition, there are ongoing academic, political and regulatory discussions in the U.S., Europe, Middle East, Asia, Australia, Brazil and other jurisdictions regarding whether certain game genres, such as social casino, or certain game mechanics, such as “loot boxes,” or in-game "virtual currencies," should be subject to a higher level or different type of regulation than other game genres or mechanics to protect consumers, in particular minors and vulnerable adults, and, if so, what such regulation should include.
+Added: If new regulations are imposed, or other regulations are interpreted to apply to our games or certain game mechanics, such rules and regulations may expose us to civil and criminal penalties if we do not comply.
+Added: For example, the FTC recently announced a major enforcement action against a game developer for various consumer protection and privacy violations related to a game that was deemed by the FTC to have been directed at children under the Children's Online Privacy Protection Act.
+Added: Central to the FTC's complaint was the game's implementation of a virtual currency and loot box system that was deemed too confusing for vulnerable consumers such as children and teens.
+Added: The complaint was settled with the developer having to, among other things, agree to a ten-year compliance monitoring program and pay a fine of $20 million.
+Added: Additionally, in the U.K., the government is expected to conclude its review of the implementation of the industry guidance on loot boxes which was published by the U.K.
+Added: Interactive Entertainment Association.
+Added: It is possible that the government's review may recommend further regulation to address the concerns raised during the 2020 call for evidence into loot boxes in video games.
+Added: In addition, in Australia, the Guidelines for the Classification of Computer Games 2023, which went into effect in September 2024 limit games containing "simulated gambling" features to adults aged 18 and over, and require games which do not contain simulated gambling, but which contain loot boxes, to be rated M (Mature), meaning they would only be recommended as being suitable for players aged 15 and over.
Furthermore, in June 2023, the Dutch Minister of Economic Affairs sent a letter to Parliament, outlining her Consumer Agenda, which included a ban on loot boxes in the E.U.
and in the Netherlands and the amendment of legislation to characterize loot boxes as an unfair commercial practice.
−Removed: While details of this proposed ban remain unclear, the European Commission has confirmed that loot boxes are being considered as part of its current Fitness Check of E.U.
−Removed: consumer law on digital fairness which it is expected to complete later this year.
−Removed: In February 2023, an Austrian court ruled that loot boxes in one of our competitor’s video games constitute illegal gambling due, principally, to the existence of a secondary market for certain of the game's virtual items.
−Removed: Lastly, in April 2024, the Spanish Minister of Social Rights and Consumer Affairs referred to plans to promote the regulation of loot boxes in connection with a review of Spain's gambling laws.
+Added: The Dutch Minister of Foreign Affairs has continued to push for an E.U.-wide ban on loot boxes, reaffirming in 2024 their intent to include it in the Digital Fairness Act.
+Added: The Digital Fairness Act will focus on strengthening consumer protections, including the use of dark patterns, with the first set of proposals under the Digital Fairness
+Added: Act expected to be released by end of 2025 or early 2026.
+Added: The European Commission has confirmed that loot boxes are being considered as part of its preparation of those proposals, but whether those proposals will include such a prohibition on loot boxes remains unclear at this stage.
+Added: Similarly, the E.U.'s Consumer Protection Cooperation Network (which is comprised of consumer protection authorities from across the E.U.'s various member states) has recently published a set of "Key Principles on In-game Virtual Currencies" that introduces novel interpretations of existing E.U.
+Added: consumer protection law and that present significant challenges for games that offer in-game virtual currencies to consumers in the E.U.
+Added: In February 2023, an Austrian regional court ruled that loot boxes in one of our competitor’s video games constitute illegal gambling due, principally, to the existence of an unauthorized secondary market for certain of the game's virtual items.
+Added: While there have been other Austrian court cases that have reached the opposite conclusion, the long-term viability of this mechanism in Austria remains uncertain with the Austrian government having recently announced an intention to further regulate loot boxes.
+Added: Lastly, in March 2025, Spain's Council of Ministers introduced a new minor protection bill to the Spanish Parliament that proposes to limit the availability of certain loot boxes to consumers in Spain who are at least 18 years old.
It is possible that other courts or regulatory agencies could adopt similar regulations or similarly broad interpretations of existing gambling laws to effectively regulate loot boxes in their jurisdiction as a form of gambling or otherwise as a prohibited commercial practice .
2 unchanged sentences
, Merge Magic!
−Removed: , Monster Legends, NBA 2K , Top Eleven, Top Troops, WWE 2K , and Zynga Poker , certain mechanics may be deemed as “loot boxes.”
+Added: , Monster Legends, NBA 2K , Top Eleven, WWE 2K , and Zynga Poker , certain mechanics may be deemed as “loot boxes.”
New regulation by the FTC, U.S.
−Removed: states or other international jurisdictions, which may vary significantly across jurisdictions and which we may be required to comply with, could require that these game mechanics be modified or removed from games, increase the costs of operating our games, impact player engagement and monetization or otherwise harm our business performance.
+Added: states or other international jurisdictions, which may vary significantly across jurisdictions and with which we may be required to comply, could require that these game mechanics be modified or removed from games, increase the costs of operating our games, impact player engagement and monetization or otherwise harm our business performance.
It is difficult to predict how existing or new laws may be applied to these or similar game mechanics.
3 unchanged sentences
Any costs incurred as a result of this potential liability could harm our business, financial condition or results of operations.
+Added: Within the mobile games industry there has been an increase in recent years in the use of a user acquisition channel called incentivized marketing.
+Added: Incentivized marketing offers generally involve offering an incentive to the players, such as in-game app currency, for certain actions, such as downloading the game, completing consumer surveys or reaching certain milestones in a game.
+Added: While we believe our use of incentivized marking to be a legally permissible promotional activity, if the use of incentivized marketing were deemed to affect the legality of our games, we may be required to restructure our marketing activities in a manner that could impair our revenue or reduce the effectiveness of our marketing expenses.
+Added: We may also be subject to enforcement actions by federal or state regulators, as well as private litigation, which would materially affect our business and results of operations.
Certain of our business models and features within our games and services are subject to new laws or regulations or evolving interpretations and application of existing laws and regulations, including those related to gambling.
3 unchanged sentences
In addition, compliance with new and possibly inconsistent regulations for different territories could be costly, delay, or prevent the release of our products in those territories.
−Removed: The laws and regulations concerning data privacy and certain other aspects of our business are continually evolving.
+Added: The laws and regulations concerning data privacy, consumer protection, and certain other aspects of our business are continually evolving.
Failure to comply with these laws and regulations could harm our business.
−Removed: We are subject to certain privacy and data protection laws, including those in the U.S.
−Removed: Certain activities related to processing the personal data of individuals in the U.K.
−Removed: are conducted by our U.K.-based data controller or our local entities in the E.U.
−Removed: Children's Online Privacy Protection Act also regulates the collection, use, and disclosure of personal information from children under 13 years of age, and age-based privacy laws can apply to how we collect and use personal information or provide certain game features to players up to 18 years of age.
−Removed: Failure to comply with privacy and data protection laws or age restrictions may increase our costs, subject us to expensive and distracting government investigations, and result in substantial fines, or result in lawsuits and claims against us to the extent these laws include a private right of action.
−Removed: Privacy and data protection laws and industry terms are rapidly changing and likely will continue to do so for the foreseeable future, which may be difficult to comply with and which could have a negative impact on or materially change our approach to the sale and marketing of our products.
+Added: We are subject to certain privacy and data protection laws and industry terms and codes of conduct, the requirements of which are rapidly changing and likely will continue to do so for the foreseeable future.
+Added: This may add complexity to our compliance efforts and could have a negative impact on or materially change our approach to the sale and marketing of our products.
For example, the E.U.
−Removed: General Data Protection Regulation ("GDPR") and the UK Data Protection Act 2018 ("DPA 2018") both became effective in May 2018.
−Removed: GDPR and DPA 2018 apply to us because we receive and process the personal information of individuals in the E.U.
+Added: General Data Protection Regulation ("GDPR") and the U.K.
+Added: Data Protection Act 2018 ("DPA 2018") both became effective in May 2018.
+Added: GDPR and DPA 2018 apply to us because we target our services to and/or receive and process the personal information of individuals in the E.U.
and the U.K., and we maintain certain local entities in the E.U.
responsible for processing personal information.
−Removed: GDPR and DPA 2018 contain significant penalties for non-compliance, which have been imposed by regulators.
−Removed: In addition, the E.U.
+Added: GDPR and DPA 2018 contain significant penalties for non-
+Added: compliance, which have been imposed by regulators.
+Added: In addition, E.U.
+Added: member states continue to enact national laws to implement the GDPR.
+Added: Also, the E.U.
Digital Services Act (“DSA”) became fully applicable on February 17, 2024.
1 unchanged sentence
Noncompliance with the DSA could result in fines of up to 6% of annual global revenues, which are in addition to the ability of civil society organizations and non-governmental organizations to lodge class action lawsuits.
−Removed: Countries in the E.U.
−Removed: are still enacting national laws that correspond to certain portions of the GDPR.
−Removed: also implemented an Age Appropriate Design Code that applies to how personal data is used for individuals up to age 18.
−Removed: In the U.S., the California Consumer Privacy Act ("CCPA") became effective on January 1, 2020 and applies to processing of personal information of California residents.
−Removed: California also enacted the California Privacy Rights Act ("CPRA"), which updates the CCPA.
−Removed: Fifteen other U.S.
−Removed: states have enacted comprehensive privacy laws, and other states are considering similar privacy or data protection laws that may apply to us.
+Added: In the U.S., approximately 20 states have enacted comprehensive privacy laws and several other states have enacted more narrow privacy laws.
+Added: These apply to processing of personal information of those state residents and may impact how we can collect and use that information, especially for players under 18 years of age.
+Added: states are considering similar privacy or data protection laws that may apply to us.
+Added: states are also considering a number of other additional laws related to use of artificial intelligence or “automated decision making,” and advertising, such as requiring mandatory device settings for users to opt-out of advertising.
+Added: Failure to comply with privacy and data protection laws may increase our costs, subject us to expensive and distracting government investigations, and result in substantial fines, or result in lawsuits and claims against us to the extent these laws include a private right of action.
+Added: Moreover, a number of jurisdictions impose specific and more onerous requirements regarding the collection and use of child and teen data.
+Added: For instance, the U.S.
+Added: Children's Online Privacy Protection Act regulates the collection, use, and disclosure of personal information from children under 13 years of age, and age-based privacy laws can apply to how we collect and use personal information or provide certain game features to players up to 18 years of age, including how or whether we are permitted to use their information for targeted advertising.
+Added: implemented an Age Appropriate Design Code, which became effective in September 2021, that sets forth risk-based standards to be implemented by organizations that provide online services (e.g., online games) likely to be accessed by children in the U.K.
+Added: under the age of 18, as part of such organization’s efforts to comply with applicable data protection laws.
+Added: A number of U.S.
+Added: states have enacted or are considering legislation similar to the U.K.
+Added: Age Appropriate Design Code and several have also enacted or are considering legislation that prohibits targeted advertising to child and teen players under the age of 16 or 18 without express consent.
+Added: For instance, the California Age-Appropriate Design Code Act took effect in July 2024;
+Added: however, as of March 2025, the California Attorney General has been enjoined from enforcing the act on First Amendment grounds.
+Added: We cannot predict how this or other age-based obligations imposed on providers of online services may affect our compliance efforts going forward, and whether they will result in industry-wide changes to online services available to child and teen players.
government, including the FTC and the Department of Commerce, also continue to review the need for greater or different regulation over the collection of personal information and information about consumer behavior on the Internet and on mobile devices, and the U.S.
−Removed: Congress is considering a number of legislative proposals to regulate in this area, including a draft Federal comprehensive privacy law, updates to existing children's privacy laws that may expand the scope of coverage, and online safety laws.
+Added: Congress is considering a number of legislative proposals to regulate in this area, including a draft Federal comprehensive privacy law, updates to existing children's privacy laws that may expand the scope of coverage, and online safety laws that may require additional content moderation or changes to features in our games to minimize harm to children.
Various government and consumer agencies worldwide have also called for new regulation and changes in industry practices.
−Removed: Further, and most notably in the mobile ecosystem, companies that provide the platforms on which our games are played are changing the terms on how publishers can collect and use personal data obtained from users on those platforms.
+Added: We cannot predict whether such proposals may be enacted into law, in what form or when.
+Added: Any such new or amended privacy laws may add complexity to our compliance efforts and require us to expend additional financial or other resources as a result.
+Added: Privacy-based litigation and similar legal challenges likely will continue to affect our industry and the internet-enabled ecosystem.
+Added: Existing laws that include private rights of action may continue to be leveraged by private litigants even if those legal challenges do not align with more recent privacy laws.
+Added: These risks may also be increased when the law includes statutory damages instead of an evaluation of the actual harm presented by the activity in question.
+Added: The ongoing, or subsequent resolution of, legal challenges affecting organizations using internet-enabled data collection and use may affect how we engage with our players and operate our business.
+Added: Further, and most notably in the mobile ecosystem, companies that provide the platforms on which our games are played are changing the terms on which publishers can collect and use personal data obtained from users on those platforms.
Player use of our games is subject to our privacy policy and terms of service ("TOS").
−Removed: If we fail to comply with our posted privacy policy or TOS, or if we fail to comply with existing privacy or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, affect our financial condition, and harm our business.
+Added: If we fail to comply with our posted privacy policy, TOS, or other consents received in our game experience, or if we fail to comply with existing privacy or data protection laws and regulations, it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, affect our financial condition, and harm our business.
If regulators, the media, or consumers raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in fines or judgments against us, damage our reputation, negatively affect our financial condition, and damage our business.
13 unchanged sentences
Further, random digital item mechanics may become subject to further regulations in various jurisdictions.
−Removed: If this were to occur, we might be required to alter some of our
−Removed: games to address these additional requirements or seek licenses, authorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and other requirements, and we may be subject to additional regulation and oversight, such as reporting to regulators, all of which could significantly increase our operating costs.
+Added: If this were to occur, we might be required to alter some of our games to address these additional requirements or seek licenses, authorizations, or approvals from relevant regulators, the granting of which may be dependent on us meeting certain capital and other requirements, and we may be subject to additional regulation and oversight, such as reporting to regulators, all of which could significantly increase our operating costs.
Moreover, the inclusion of random digital item mechanics has attracted the attention of the interactive gaming community, and if the future implementation of these features creates a negative perception of gameplay fairness or other negative perceptions, our reputation and brand could be harmed and revenue could be negatively impacted.
13 unchanged sentences
We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial to our existing stockholders.
−Removed: Our Board of Directors has the power, without stockholder approval, to adopt a stockholder rights plan and/or to designate the terms of one or more series of preferred stock and issue shares of preferred stock.
−Removed: The ability of our Board of Directors to create and issue a new series of preferred stock and certain provisions of Delaware law, our certificate of incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock and the value of any outstanding notes.
+Added: Our Board has the power, without stockholder approval, to adopt a stockholder rights plan and/or to designate the terms of one or more series of preferred stock and issue shares of preferred stock.
+Added: The ability of our Board to create and issue a new series of preferred stock and certain provisions of Delaware law, our certificate of incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock and the value of any outstanding notes.
Changes in our tax rates or exposure to additional tax liabilities could adversely affect our earnings and financial condition.
13 unchanged sentences
Although Congress is considering legislation that would modify the capitalization and amortization requirement, we have no assurance that the requirement will be deferred, repealed, or otherwise modified.
−Removed: It is possible that a change in the requirement could have a significant adverse impact on our effective tax rate, tax payments, and financial condition in future periods.
−Removed: In addition, the American Rescue Plan Act of 2021 (“ARPA”) provides for numerous tax and other stimulus measures, one of which will expand the limitation of compensation deductions for certain covered employees of publicly held corporations to also include the next five highly compensated employees.
−Removed: This limitation will be effective for us beginning April 1, 2027.
+Added: It is possible that a change in the requirement could have a significant impact on our effective tax rate, tax payments, and financial condition in future periods.
+Added: In addition, TCJA added the Base Erosion Anti-Abuse Tax ("BEAT") to prevent the reduction of tax liability through certain payments made to foreign related parties.
+Added: BEAT imposes a minimum tax on taxpayers to prevent profit shifting from such payments.
+Added: It is possible that we could be subject to BEAT and that it could have a significant adverse impact on our effective tax rate, tax payments, and financial condition in future periods.
+Added: The American Rescue Plan Act of 2021 (“ARPA”) provides for numerous tax and other stimulus measures, one of which will expand the limitation of compensation deductions for certain covered employees of publicly held corporations to also include the next five highly compensated employees.
+Added: This limitation will be effective for us beginning April 1, 2027 and could have a significant adverse impact on our effective tax rate, tax payments, and financial condition in future periods.
The Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) includes a corporate alternative minimum tax ("CAMT") of 15% on the adjusted financial statement income (AFSI) of corporations with an average AFSI exceeding $1.0 billion over a consecutive three-year period.
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similarly enacted legislation.
−Removed: Pillar Two is generally effective for years beginning on or after January 1, 2024 in the E.U.
+Added: Pillar Two is generally effective for years beginning on or after January 1,
+Added: 2024 in the E.U.
Although the U.S.
−Removed: has not yet enacted Pillar Two legislation, it is expected that many other countries will also implement similar legislation with varying effective dates in the future.
−Removed: Many aspects of Pillar Two are effective for the fiscal year ended March 31, 2025.
+Added: has not yet enacted Pillar Two legislation, many other countries have implemented similar legislation with varying effective dates in the future.
+Added: Many aspects of Pillar Two became effective for the fiscal year ended March 31, 2025.
It is possible that Pillar Two could result in additional tax liability over the regular corporate tax liability in a particular jurisdiction to the extent tax expense is less than the 15% minimum rate and could have an adverse impact on our effective tax rate, tax payments, and financial condition in future periods.
Additionally, certain jurisdictions have modified or are seeking to modify their tax incentives to align with the Pillar Two criteria.
−Removed: Changes, or the failure to change tax incentive provisions could have an adverse impact.
+Added: has not yet enacted Pillar Two legislation, including aligning certain tax incentives with Pillar Two requirements and there is a risk that the under taxed profits rules would allow foreign countries to tax U.S.
+Added: companies on U.S.
+Added: Changes, or the failure to change tax incentive provisions to be Pillar Two compliant could have an adverse impact.
We will continue to monitor legislative and regulatory developments to assess potential impact.
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We are continuing to execute on our growth initiatives in Asia, where our strategy is to broaden the distribution of our existing products and expand our online gaming presence, especially in China.
−Removed: We are subject to risks inherent in foreign trade, including increased credit risks, tariffs, and duties, fluctuations in foreign currency exchange rates, shipping delays, and international political, regulatory and economic developments, such as the Russia-Ukraine war and the Israel-Hamas war, all of which can have a significant influence on our operating results.
+Added: We are subject to risks inherent in foreign trade, including increased credit risks, tariffs, and duties, fluctuations in foreign currency exchange rates, especially in jurisdictions like Turkey;
+Added: shipping delays, and international political, regulatory and economic developments, such as the Russia-Ukraine war and the Israel-Hamas war, all of which can have a significant influence on our operating results.
Many of our international sales are made in local currencies, which could fluctuate against the dollar.
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We expect that an increasing number of our games will be supported with material post-release activities, such as content updates and online-enabled features, and we could therefore be required to recognize more of the related revenues for those games over a period of time rather than at the time of sale.
−Removed: Further, as we increase our downloadable content and add new features to our online services, user playing patterns can affect our estimate of the service period, and we
−Removed: could be required to recognize revenues, and defer related costs, over a shorter or longer period of time than we initially allocated.
+Added: Further, as we increase our downloadable content and add new features to our online services, user playing patterns can affect our estimate of the service period, and we could be required to recognize revenues, and defer related costs, over a shorter or longer period of time than we initially allocated.
As we enhance, expand and diversify our business and product offerings, the application of existing or future financial accounting standards, particularly those relating to the way we account for revenue, could have a significant adverse effect on our reported results although not necessarily on our cash flows.
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Adverse economic conditions, such as a prolonged U.S.
−Removed: or international general economic downturn, including periods of increased inflation, unemployment levels, tax rates, interest rates, energy prices, or declining consumer confidence, could reduce consumer spending.
+Added: or international general economic downturn, including periods of increased inflation, stagflation, unemployment levels, tax rates, interest rates, energy prices, or declining consumer confidence, or the adverse impacts of implemented or threatened tariffs or trade wars could reduce consumer spending.
Natural disasters, acts of war, pandemics, terrorism, transportation disruptions, climate change, adverse weather conditions, and other reasons beyond our control could further reduce discretionary spending on entertainment activities and products.
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Additional issuances or sales of equity securities by us would dilute the ownership of our existing stockholders and could adversely affect the market price of our common stock.
−Removed: We may issue equity or equity-based securities in the future to facilitate acquisitions or strategic transactions, as we did in connection with our acquisition of Zynga and as we intend to do in connection with our pending acquisition of Gearbox, to adjust our ratio of debt to equity, to fund expansion of our operations or for other purposes.
+Added: We may issue equity or equity-based securities in the future to facilitate acquisitions or strategic transactions, as we did in connection with our acquisitions of Zynga and Gearbox, to adjust our ratio of debt to equity, to fund expansion of our operations or for other purposes.
To the extent we issue additional equity securities, the percentage ownership of our existing stockholders would be reduced.
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Our business faces increasing scrutiny related to environmental, social and governance activities.
−Removed: We risk damage to our reputation if we fail to act responsibly in a number of areas, such as diversity and inclusion, environmental stewardship, supply chain management, climate change, workplace conduct, human rights and philanthropy.
+Added: We risk damage to our reputation if we fail to act responsibly in a number of areas, such as environmental stewardship, supply chain management, climate change, workplace conduct, human rights and philanthropy.
Any harm to our reputation could impact employee engagement and retention and the willingness of customers and our partners to do business with us, which could have a material adverse effect on our business, results of operations and cash flows.
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We expect to continue to expend resources to address concerns with our products and services.
−Removed: Negative perceptions could arise despite our efforts, though, and may result in loss of engagement with our products
−Removed: and services, increased scrutiny from government bodies and consumer groups, and/or litigation, any of which could negatively impact our business.
+Added: Negative perceptions could arise despite our efforts, though, and may result in loss of engagement with our products and services, increased scrutiny from government bodies and consumer groups, and/or litigation, any of which could negatively impact our business.
Catastrophic events and climate change may have a long-term impact on our business.
4 unchanged sentences
We may be adversely affected by the effects of inflation.
−Removed: Inflation has the potential to adversely affect our business, results of operations, financial position and liquidity by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers.
+Added: Inflation has the potential to adversely affect our business, results of operations, financial position and liquidity by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge
+Added: our customers.
The existence of inflation in the economy has the potential to result in higher interest rates and capital costs, supply shortages, increased costs of labor and other similar effects.
−Removed: Further, world events, such as the Russia-Ukraine war and the Israel-Hamas war , could affect inflationary trends.
+Added: Further, events, such as the Russia-Ukraine war and the Israel-Hamas war, and the adverse impacts of implemented tariffs and trade wars, could affect inflationary trends.
As a result of inflation, we have experienced and may continue to experience, increases in our costs associated with operating our business including labor, equipment and other inputs.
5 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.