2K Sports 2009 Annual Report Download - page 10

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The development cycle for our titles generally ranges from 12 to more than 24 months and our top-selling
titles could take up to three years or longer to develop. Although we often simultaneously develop our
software for multiple platforms, in certain cases it can take 9 to 12 months to adapt a product for
additional hardware platforms after initial development for one platform is completed. The cost to develop
a frontline software product generally ranges from $10 million to $40 million, with our top titles exceeding
these amounts. We expect that development costs and time will continue to increase for current generation
platforms.
We continue to explore new revenue streams as they evolve, including higher margin sources such as
downloadable content and in-game advertising. In 2009, we released a variety of downloadable content,
allowing gamers to further expand their gameplay experience, including Grand Theft Auto IV: The Lost and
Damned, Midnight Club: Los Angeles—South Central Map Expansion and South Central Premium Upgrade,
Grand Theft Auto: The Ballad of Gay Tony and NBA2K10: Draft Combine. We expect downloadable
content to become more prevalent as broadband connectivity continues to gain popularity and digital
delivery platforms such as Xbox LIVE and PlayStation Network gain additional customers.
Rockstar Games. Software titles published by our Rockstar Games label are primarily internally developed.
We expect Rockstar Games, our wholly-owned publisher of the hit Grand Theft Auto and Midnight Club
franchises, to continue to be a leader in the action product category and create groundbreaking
entertainment by leveraging our existing franchises as well as developing new brands, including Agent. We
believe that Rockstar has established a uniquely original, popular cultural phenomenon with its Grand
Theft Auto series and continues to expand on our established franchises by releasing sequels as well as
offering downloadable episodes and content. In 2009, Rockstar released the critically acclaimed Grand
Theft Auto: Chinatown Wars on the Nintendo DS and Sony PSP, and intends to bring it to the iPhoneand
iPodtouch at a future date. Rockstar is also well known for developing brands in other genres, including
the Bully, Manhunt, Max Payne and Red Dead franchises, and introduced a new brand in the music genre
this year with Rockstar Games and Timbaland present Beaterator.
2K. Our 2K label publishes its titles under 2K Games, 2K Sports and 2K Play:
2K Games. 2K Games has published a variety of popular entertainment properties across multiple genres
and platforms and we expect 2K Games to continue to develop new and successful franchises in the future.
2K Games’ internally owned and developed franchises include the critically acclaimed, multi-million unit
selling BioShock, Mafia, and Sid Meier’s Civilization series. 2K Games has contracted to develop a new
multiplayer experience for BioShock2 in order to deliver a new and substantial element that enhances
the lore and fiction of the BioShock universe. 2K Games also expanded the Sid Meier’s Civilization series by
releasing Sid Meier’s CivilizationRevolution onto mobile platforms for the iPhoneand iPodtouch.
2K Games expects to further expand upon the Civilization franchise by introducing CivilizationNetwork
exclusively on Facebook in calendar 2010. 2K Games has externally developed titles that have included The
Darknessand The Elder Scrolls IV: Oblivion, and released the externally developed title Borderlandsin
October 2009.
2K Sports. We develop most of our 2K Sports software titles through our internal development studios
including the Major League Baseball 2K series, NBA 2K series, NHL 2K series, our Top Spin tennis series,
and our Don King boxing title. 2K Sports has secured long-term, third party exclusive licensing
relationships with Major League Baseball Properties, the Major League Baseball Players Association and
Major League Baseball Advanced Media. In addition, 2K Sports has secured licensing agreements with the
National Basketball Association (NBA) and the National Hockey League (NHL).
We also have expansion initiatives in the rapidly growing Asia markets, where our strategy is to broaden
the distribution of our existing products, expand our business in Japan, and establish an online gaming
presence, especially in China and Korea. In 2009, 2K Sports secured a multi-year license from the NBA to
develop an online version of the NBA simulation game in China, Taiwan, South Korea and Southeast Asia.
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