865570--5/28/2008--THQ

related topics

{product, market, service}

{customer, product, revenue}

{property, intellectual, protect}

{condition, economic, financial}

{personnel, key, retain}

{operation, international, foreign}

{control, financial, internal}

{stock, price, operating}

{system, service, information}

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. Risk factors related to video game platforms: 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. Risk factors related to creating and acquiring our intellectual property: The loss of our key 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. Our inability to acquire or create new intellectual property that has a high level of consumer recognition or acceptance could harm us. Risk factors related to the development of our products: Increasing development costs can decrease our profitability. 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. We have experienced development challenges on the PlayStation 3. Our inability to overcome our development challenges for games developed for the PlayStation 3 could negatively impact our revenue and profitability. Defects in our game software could harm our reputation or decrease the market acceptance of our products. We rely on external developers for the development of some of our titles. Risk factors related to distribution of our products: We rely on a small number of customers that account for a significant amount of our sales. 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. Increased sales of used video game products could lower our sales. Risk factors related to competition: Competitive launches may negatively affect the sales of our games. Competition in the interactive software entertainment industry may lead to reduced sales of our products and reduced market share. Development of software by hardware manufacturers. Development of software and online games by intellectual property owners. 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. Consolidation in the interactive software entertainment industry presents challenges with respect to resources and integration of acquired businesses. Emerging video game platforms, such as MMO games or games for wireless devices, require investments and present many risks. A significant portion of our revenue is derived from our international operations, which may subject us to economic, political, regulatory and other risks. 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. 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. Rating systems and future legislation may make it difficult to successfully market and sell our products. Any significant downturn in general economic conditions that results in a reduction in discretionary spending could reduce demand for our products and harm our business.

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865570--5/28/2008--THQ_INC