2K Sports 2008 Annual Report Download - page 19

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entertainment software titles and hardware for adequate levels of shelf space and promotional
support.
• Other forms of entertainment such as motion pictures, television and audio, online computer
programs and other forms of entertainment which may be less expensive or provide other
advantages to consumers.
Competition in the entertainment software industry is based on: product quality, features, innovation and
playability; brand name recognition; compatibility with popular platforms; access to distribution channels;
price; marketing; and customer service. Our business is driven by hit titles, which require increasing
budgets for development and marketing. Competition for our titles is influenced by the timing of
competitive product releases and the similarity of such products to our titles and may result in loss of shelf
space or a reduction in sell-through of our titles at retail stores.
In our distribution business, we compete with large national companies as well as smaller regional
distributors. We also compete with the efforts of the major entertainment software companies that
distribute directly to retailers or over the Internet. Some of our competitors have greater financial,
technical, personnel and other resources than we do and are able to carry larger inventories, adopt more
aggressive pricing policies and provide more comprehensive product selection than we can.
International Operations
Sales in international markets, principally in the United Kingdom and other countries in Europe, have
accounted for a significant portion of our net revenue. For fiscal 2008, 2007 and 2006, approximately
40.7%, 31.3% and 39.4%, respectively, of our net revenue was earned outside the United States. We are
subject to risks inherent in foreign trade, including increased credit risks, tariffs and duties, fluctuations in
foreign currency exchange rates, shipping delays and international political, regulatory and economic
developments, all of which can have a significant impact on our operating results. See Notes 1 and 16 to
the Consolidated Financial Statements.
Segment and Geographic Information
See Note 16 to the Consolidated Financial Statements for more information regarding our reportable
segments.
Employees
As of October 31, 2008, we had approximately 2,100 full-time employees, of which approximately 1,050
were employed outside of the United States. None of our employees are subject to collective bargaining
agreements. We consider our relations with employees to be satisfactory.
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