946581--12/18/2009--TAKE_TWO_INTERACTIVE_SOFTWARE

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{customer, product, revenue}

{stock, price, share}

{system, service, information}

{property, intellectual, protect}

{stock, price, operating}

{financial, litigation, operation}

{operation, international, foreign}

{acquisition, growth, future}

{provision, law, control}

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Risks relating to 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. We are subject to product development risks which could result in delays and additional costs, and we must adapt to changes in software technologies. The market for our titles is characterized by short product life cycles. The inability of our products to achieve significant market acceptance, delays in product releases or disruptions following the commercial release of our products may have a material adverse effect on our operating results. Our business is subject to the continued popularity of current generation video game platforms and our ability to develop commercially successful products for these platforms. If the average price of our prior generation software titles continues to decline or if we are unable to sustain launch pricing on current generation titles, our operating results may suffer. We depend on our key management and product development personnel. The recent decline in consumer spending and other adverse changes in the economy have negatively affected our business and any further declines in consumer spending or other adverse changes in the economy could have a material adverse impact on our business and operating results. Our quarterly operating results are dependent on the release of "hit" titles and are highly seasonal which may cause our quarterly operating results to fluctuate significantly. We may not be able to adequately adjust our cost structure in a timely fashion in response to a sudden decrease in demand. Returns of our published titles by our customers and price concessions granted to our customers may adversely affect our operating results. Increased sales of used video game products could lower our sales. A limited number of customers account for a significant portion of our sales. The loss of a principal customer could seriously hurt our business. If our marketing and advertising efforts fail to resonate with our customers, our business and operating results could be adversely affected. We rely on a primary distribution service provider for a significant portion of our products and the failure of this service provider to perform as expected could harm our operating results. The interactive entertainment software industry is highly competitive both for our publishing and distribution operations. Increased competition for limited shelf space and promotional support from retailers could affect the success of our business and require us to incur greater expenses to market our titles. Our business is dependent on our ability to enter into successful software development arrangements with third parties. We cannot publish our titles without the approval of hardware licensors that are also our competitors. Our platform licensors control the fee structures for online distribution of our games on their platforms. 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. Failure to obtain a target rating for certain of our products could negatively impact our ability to distribute and sell those games, as could the re-rating of a game for any reason. Content policies adopted by retailers, consumer opposition and litigation could negatively impact sales of our products. Our business and products are subject to potential legislation. The adoption of such proposed legislation could limit the retail market for our products. We may need to raise additional capital if we continue to incur losses. Continued turmoil in the credit markets may affect our ability to raise additional capital. We are subject to risks and uncertainties of international trade, including fluctuations in the values of local foreign currencies against the dollar. We face risks from our international operations. Our distribution business is dependent on suppliers to maintain an adequate supply of products to fulfill customer orders on a timely basis. Gross margins relating to our distribution business have historically been narrow, which increases the impact of variations in costs on our operating results. If we are unable to protect the intellectual property relating to our software, the commercial value of our products will be adversely affected and our competitive position could be harmed. If we infringe on or are alleged to infringe on the intellectual property rights of third parties, our business could be adversely affected. Data breaches involving the source code for our products could adversely affect our revenues. Our software is susceptible to errors, which can harm our financial results and reputation. 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. Our ability to acquire licenses to intellectual property, especially for sports titles, impacts our revenue and profitability. Competition for these licenses may make them more expensive and increase our costs. We are subject to contractual covenants which place certain limitations on how we manage our business Our involvement, and the involvement of some of our former executive officers, in a wide variety of lawsuits, investigations and proceedings has had, and may in the future have, a material adverse effect on us. We may be required to record a significant charge to earnings if our goodwill becomes impaired. Our reported financial results could be adversely affected by the application of existing or future accounting standards to our business as it evolves. Risks relating to our common stock Additional issuances of equity securities by us would dilute the ownership of our existing stockholders. Future sales or other issuances of our common stock could adversely affect its market price. Our stock price has been volatile and may continue to fluctuate significantly. The convertible senior note hedge and warrant transactions entered into in connection with the offering of our convertible senior notes may affect the value of the notes and our common stock. Delaware law, our charter documents and provisions of our debt agreements may impede or discourage a takeover, which could cause the market price of our shares to decline.

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946581--12/18/2009--TAKE_TWO_INTERACTIVE_SOFTWARE_INC