2K Sports 2009 Annual Report Download - page 13

drug stores; and supermarket and discount store chains. Our European customers include Media Markt,
Game Group, and GEM Distribution. We have sales operations in the Asia-Pacific region, Australia,
Austria, Canada, France, Germany, Italy, the Netherlands, New Zealand, Spain, Switzerland, the United
Kingdom and the United States.
We are dependent on a limited number of customers that account for a significant portion of our sales.
Sales to our five largest customers in fiscal 2009 accounted for approximately 48.0% of our net revenue,
with Wal-Mart, GameStop and Best Buy accounting for 14.2%, 14.0% and 10.0%, respectively. No other
customer accounted for more than 10.0% of our net revenue for the year ended October 31, 2009.
We also digitally distribute our titles, downloadable content and micro transactions direct to consoles, PCs,
and communications devices. While digital distribution is a growing business for our industry and company,
we continue to view packaged goods and traditional retailers as being the primary channel for the sale of
our products for the foreseeable future.
Marketing
Our marketing and promotional efforts are intended to maximize exposure and broaden distribution of
our titles, promote brand name recognition, assist retailers and properly position, package and
merchandise our titles.
We market titles by:
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and outdoor advertising. We believe that we label and market our products in accordance with the
applicable principles and guidelines of the Entertainment Software Rating Board, or the ESRB, an
independent self-regulatory body that assigns ratings and enforces advertising guidelines for the
interactive software industry.
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believe that the shared demographics between various media and some of the software titles
marketed by our publishing labels provide excellent cross-promotional opportunities. We continue
to work with popular recording artists to create sophisticated game soundtracks, enter into
agreements to license high-profile names and likenesses, and make arrangements for co-branding
opportunities.
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Program. In connection with these programs, we receive manufacturing discounts from Sony and
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2007, price concessions to retailers amounted to $68.2 million, $52.3 million and $68.1 million,
respectively. In certain international markets, we also provide volume rebates to stimulate
continued product sales.
We also employ various other marketing methods designed to promote consumer awareness, including
in-store promotions and point-of-purchase displays, direct mail, co-operative advertising, as well as
attendance at trade shows. We employ separate sales forces for our publishing and distribution operations.
As of October 31, 2009, we had a sales and marketing staff of 258 people.
Our products generally sell at retail prices ranging from $19.99 to $59.99 in North America. Products
designed for the iPhone and iPod touch generally sell at retail prices ranging from $4.99 to $9.99 in North
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