946581--12/20/2007--TAKE_TWO_INTERACTIVE_SOFTWARE

related topics

{product, market, service}

{customer, product, revenue}

{property, intellectual, protect}

{financial, litigation, operation}

{personnel, key, retain}

{system, service, information}

{stock, price, operating}

{operation, international, foreign}

{product, candidate, development}

{cost, operation, labor}

{acquisition, growth, future}

We have experienced significant turnover in our Board and executive management and have a new business development plan. 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 in order to compete successfully in our industry. Our business is highly dependent on the success, timely release and availability of new video game platforms, as well as our ability to develop commercially successful products for these platforms. We expect the average price of our prior-generation software titles to continue to decline. The market for our titles is characterized by short product life cycles. 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 may need to raise additional capital if we continue to incur losses. 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. 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 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 highly seasonal and may fluctuate significantly, which could cause our stock price to decline. We may not be able to protect our proprietary rights or avoid claims that we infringe the proprietary rights of others. Our software is susceptible to errors, which can harm our financial results and reputation. Gross margins relating to our distribution business have been historically 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.

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946581--12/20/2007--TAKE_TWO_INTERACTIVE_SOFTWARE_INC