865570--5/26/2009--THQ

related topics

{product, market, service}

{customer, product, revenue}

{property, intellectual, protect}

{system, service, information}

{gas, price, oil}

{operation, international, foreign}

{condition, economic, financial}

{stock, price, operating}

{personnel, key, retain}

{control, financial, internal}

{capital, credit, financial}

{cost, contract, operation}

We must continue to develop and sell new titles in order to generate revenue and remain profitable. Our business is "hit" driven. If we do not deliver "hit" games, our revenue and profitability can suffer. The global economic downturn could reduce demand for our products and increase volatility in our stock price, which could result in a material adverse impact on our business, operating results, and financial position. Our lack of earnings over the past two fiscal years has reduced our cash position. While the company has plans in place to generate positive cash flow in fiscal 2010, further deterioration in global macroeconomic conditions or failure to meet our current plan for fiscal 2010 could result in us having to pursue additional funding from public or private sources to meet our cash needs, or to curtail or defer currently-planned expenditures, or both. The decrease in our stock price and cash position over the last year may affect our ability to do business with key third parties. Since a significant portion of our net sales are based upon licensed properties, failure to renew such licenses, or renewals of such licenses on less advantageous terms, could cause our revenue to decline. A decrease in the popularity of our licensed brands can materially affect our revenue and financial position. Our inability to acquire or create new intellectual property that has a high level of consumer recognition or acceptance could negatively impact our revenues and profitability. Increasing development costs for games which may not perform as anticipated can decrease our profitability and could result in potential impairments of capitalized software development costs. We rely on a small number of customers that account for a significant amount of our sales. A significant portion of our revenue is derived from our international operations, which may subject us to economic, political, regulatory and other risks. Fluctuations in our quarterly operating results due to seasonality in the interactive software entertainment industry and other factors related to our business operations could result in substantial losses to investors. Video game product development schedules are difficult to predict and can be subject to delays. Postponements in shipments can substantially impact our profitability in any given quarter. Video games that are not high quality may not sell according to our forecast, which could materially impact our profitability in any given quarter. Our business is dependent upon the success and availability of the video game platforms on which consumers play our games. Our inability to enter into agreements with the manufacturers to develop, publish and distribute titles on their platforms could seriously impact our operations. Software pricing may affect our revenues and profitability. We compete aggressively with other video game publishers for retail shelf space. Our inability to get our games placed on retailers' shelves could materially impact our revenues and profitability. Lack of retailer support for categories in which we publish games could negatively affect the sales of our products. Technology changes rapidly in our business and if we fail to anticipate new technologies or the manner in which people play our games, the quality, timeliness and competitiveness of our products and services will suffer. Competitive launches may negatively affect the sales of our games. Development of software by hardware manufacturers may lead to reduced sales of our products. Increased development of software and online games by intellectual property owners may lead to reduced revenues. Competition for licenses may negatively affect our profitability. Competition with emerging forms of home-based entertainment may reduce sales of our products. Competition for qualified personnel is intense in the interactive software entertainment industry and failure to hire and retain qualified personnel could seriously harm our business. Increased sales of used video game products could lower our sales. We rely on external developers for the development of some of our titles. Defects in our game software could harm our reputation or decrease the market acceptance of our products. We may not be able to protect our intellectual property rights against piracy, infringement of our patents by third parties, or declining legal protection for intellectual property. Third parties may claim we infringe their intellectual property rights. We cannot be certain of the future effectiveness of our internal controls over financial reporting or the impact of the same on our operations or the market price for our common stock. Rating systems and future legislation may make it difficult to successfully market and sell our products.

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865570--5/26/2009--THQ_INC