946581--12/19/2008--TAKE_TWO_INTERACTIVE_SOFTWARE

related topics

{product, market, service}

{customer, product, revenue}

{system, service, information}

{property, intellectual, protect}

{acquisition, growth, future}

{financial, litigation, operation}

{stock, price, operating}

{cost, operation, labor}

{operation, international, foreign}

{regulation, change, law}

{condition, economic, financial}

{provision, law, control}

{personnel, key, retain}

{product, candidate, development}

We depend on our key management and product development personnel. 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 may not fully realize the anticipated benefits resulting from the recently completed reorganization of our executive management team and our business. Our business is highly dependent on the continued growth 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. 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 distribution business is dependent on suppliers to maintain an adequate supply of products to fulfill customer orders on a timely basis. 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 materially harm our results of operations. We may need to raise additional capital if we incur losses. Our ability to raise additional capital may be limited. 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. 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 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. Our business is dependent on our ability to enter into successful software development arrangements with third parties. 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 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. A limited number of customers account for a significant portion of our sales. The loss of a principal customer could seriously hurt our business. Returns of our products by our customers and price concessions granted to our customers may adversely affect our operating results. 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. Our business and products are subject to potential legislation. The adoption of such proposed legislation could limit the retail market for our products. Content policies adopted by retailers, consumer opposition and litigation could negatively impact sales of our products. We cannot publish our titles without the approval of hardware licensors that are also our competitors. 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. Such fluctuations could cause our stock price to decline. 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. Data breaches involving the source code for our products could adversely affect our revenues. If we infringe on or are alleged to infringe on the intellectual property rights of third parties, our business could be adversely affected. Our software is susceptible to errors, which can harm our financial results and reputation. Gross margins relating to our distribution business have historically been narrow, which increases the impact of variations in costs on our operating results. We may not be able to adequately adjust our cost structure in a timely fashion in response to a sudden decrease in demand. We are subject to risks and uncertainties of international trade, including fluctuations in the values of local foreign currencies against the dollar. Our business may be affected by issues in the economy that affect consumer spending. Our stock price has been volatile and may continue to fluctuate significantly. We face risks from our international operations. Our reported financial results could be adversely affected by the application of existing or future accounting standards to our business as it evolves. Due to recent economic turmoil and a general depression in stock prices, we could become the target of an unsolicited offer to acquire our shares of common stock. An unsolicited offer could create volatility in our stock price, could create a distraction for our management and employees, and could cause uncertainty that may adversely affect our business.

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946581--12/19/2008--TAKE_TWO_INTERACTIVE_SOFTWARE_INC