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CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
The statements contained herein which are not historical facts are considered forward-looking statements under
federal securities laws and may be identified by words such as ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘expects,’’
‘‘intends,’’ ‘‘plans,’’ ‘‘potential,’’ ‘‘predicts,’’ ‘‘projects,’’ ‘‘seeks,’’ ‘‘will,’’ or words of similar meaning and
include, but are not limited to, statements regarding the outlook for the Company’s future business and financial
performance. Such forward-looking statements are based on the current beliefs of our management as well as
assumptions made by and information currently available to them, which are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict. Actual outcomes and results may vary materially
from these forward-looking statements based on a variety of risks and uncertainties including, but not limited to,
those discussed under the heading ‘‘Risk Factors,’’ beginning on page 11. All forward- looking statements are
qualified by these cautionary statements and apply only as of the date they are made. The Company undertakes
no obligation to update any forward-looking statement, whether as a result of new information, future events or
otherwise.
PART I
Item 1. Business
General
We are a global publisher, developer and distributor of interactive entertainment software and hardware.
Our publishing business consists of our wholly-owned labels Rockstar Games and 2K, which publishes its
titles under 2K Games, 2K Sports and 2K Play. We develop, market and publish software titles for the
leading gaming and entertainment hardware platforms including: Sony’s PlayStation3 (‘‘PS3’’) and
PlayStation2 (‘‘PS2’’) computer entertainment systems; Sony’s PSP (PlayStationPortable) (‘‘PSP’’)
system; Microsoft’s Xbox 360 (‘‘Xbox 360’’) video game and entertainment system; Nintendo’s Wii
(‘‘Wii’’) and DS(‘‘DS’’) systems; and for the PC and Games for Windows. We also selectively develop
and publish titles for digital distribution via Sony’s PlayStationNetwork (‘‘PSN’’) and Microsoft’s Xbox
LIVEMarketplace (‘‘Xbox LIVE’’) and Xbox LIVEArcade (‘‘XBLA’’), as well as digitally offer our
PC titles through online download stores and services such as Steam. We have also begun to develop and
publish titles for the iPhone and iPod touch. The global installed base for the prior generation of
platforms, including PS2 and DS (‘‘prior generation platforms’’) is substantial. The release of the PS3,
Xbox 360, and Wii platforms (‘‘current generation platforms’’) has further expanded the video game
software market. We are continuing to increase the number of titles released on the current generation
platforms while also developing titles for certain prior generation platforms such as PS2 and DS given their
significant installed base, as long as it is economically attractive to do so. Our distribution business, which
consists of our Jack of All Games subsidiary, distributes our products as well as software, hardware and
accessories produced by others to retail outlets in North America.
The demographics of the interactive entertainment industry audience have broadened significantly over
the past few years, with video games becoming an increasingly popular form of mainstream entertainment.
According to the Entertainment Software Association, more than two-thirds of all American households
play PC or video games, with an estimated 68% of heads of households now playing games. The average
game player is 35 years old and has been actively playing for 12 years. Despite the widening of this
audience, the video game industry has not been immune to the ongoing challenges of the economic
environment. The ‘‘Global Video Game Market Update’’ published by International Development Group
(‘‘IDG’’) in November 2009 forecasts that the annual sales of video game software in North America,
Europe, and Japan will decline from $27.7 billion in 2008 to an estimated $16.7 billion in 2013. In addition,
IDG forecasts that the number of video game software units sold annually will also decline from
1