SEGMENT AND GEOGRAPHIC INFORMATION

3 Months Ended

Jun. 30, 2016

SEGMENT AND GEOGRAPHIC INFORMATION

SEGMENT AND GEOGRAPHIC INFORMATION

12. SEGMENT AND GEOGRAPHIC INFORMATION

        We are a publisher of interactive software games designed for console systems and personal computers, including smart phones and tablets, which are delivered through physical retail, digital download, online platforms and cloud streaming services. Our business consists of our Rockstar Games and 2K labels, which represent a single operating segment, the "publishing segment". Our operations involve similar products and customers worldwide. Revenue earned from our publishing segment is primarily derived from the sale of internally developed software titles and software titles developed by third-parties. Our operating segment is based upon our internal organizational structure, the manner in which our operations are managed and the criteria used by our Chief Executive Officer, our Chief Operating Decision Maker ("CODM"), to evaluate performance and allocate resources. We are centrally managed and the CODM primarily uses segment operating income, supplemented by sales information by product category, major product title and platform, to make operational decisions and assess financial performance. We add the change in deferred revenue to GAAP revenue to arrive at segment revenue. Segment revenue is a key metric that we use to manage our business as it reflects the sales activity in a given period and provides a more timely indication of trends in our business. Furthermore, segment revenue incorporates the change in deferred revenue that is reflected in the calculation of Segment operating income. Segment operating income differs from consolidated operating income due to the exclusion of the deferral of net revenues and associated costs related to sales generated from certain titles for which we have or expect to provide PCS deemed to be significant and virtual currency transactions, stock-based compensation expenses, and business reorganization and other expenses that may not be indicative of our core business, operating results or future outlook. Our CODM reviews assets on a consolidated basis and not on a segment basis. The following table summarizes the financial performance of our operating segment revenue and operating income (loss) and provides reconciliations to our consolidated net revenue and operating (loss) income:

	Three Months Ended June 30,
	2016		2015			2016			2015
	Net Revenue					Operating (loss) income
Operating Segment	$	272,556	$	366,392		$	(38,256	)	$	48,642
Reconciliation to consolidated net revenue / operating loss:
Net effect of deferral of net revenues and related cost of goods sold		38,996		(91,095	)		14,373			(90,965	)
Stock based compensation expense		—		—			(15,100	)		(19,086	)
Business reorganization and other expenses		—		—			—			(1,228	)
Consolidated net revenue / operating loss	$	311,552	$	275,297		$	(38,983	)	$	(62,637	)

        We attribute net revenue to geographic regions based on product destination. Net revenue by geographic region was as follows:

	Three Months Ended June 30,
Net revenue by geographic region:	2016		2015
United States	$	193,101	$	143,438
Europe		73,519		100,223
Asia Pacific		28,758		20,306
Canada and Latin America		16,174		11,330
Total net revenue	$	311,552	$	275,297

        Net revenue by product platform was as follows:

	Three Months Ended June 30,
Net revenue by product platform:	2016		2015
Console	$	254,026	$	222,574
PC and other		57,526		52,723
Total net revenue	$	311,552	$	275,297

        Our products are delivered through physical retail and digital online services (digital download, online platforms and cloud streaming). Net revenue by distribution channel was as follows:

	Three Months Ended June 30,
Net revenue by distribution channel:	2016		2015
Digital online	$	172,078	$	153,985
Physical retail and other		139,474		121,312
Total net revenue	$	311,552	$	275,297