THQ 2005 Annual Report Download - page 26

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3
In the fiscal year ending March 31, 2006 (“fiscal 2006”) and beyond, we plan to ship mass-market titles for
the current generation of console platforms, the PSP system and to continue to develop for the Nintendo
Dual Screen (“DS”). We expect to release a total of 14 SKUs for the DS and PSP in fiscal 2006. A SKU is
a version of a title designed for play on a particular platform.
•Expand market share of the core gamer segment
We believe that we can grow overall market share in our industry by expanding our core gamer market
share. We have worked to create and acquire our own brands and content and to secure content licenses
for original intellectual properties. In fiscal 2005, we acquired the exclusive worldwide intellectual property
rights to the Juiced franchise, a street racing property, and plan to release Juiced inthe first quarter of fiscal
2006. Additionally, we released new products targeted at the core gamer based upon both original and
licensed intellectual properties including Full SpectrumWarrior™, MX v. ATV Unleashed™, The Punisher ,
and Warhammer 40,000: Dawn of War™. Upcoming titles in this category include Company of Heroes™,
Destroy All Humans!, The Outfit™, Saint’s Row™ andS.T.A.L.K.E.R.: Shadow of Chernobyl , as well as a
sequel to Full Spectrum Warrior and an expansion pack to Warhammer 40,000: Dawnof War.
•Increase internal development capabilities and technology base
We believe it is important for us to expand our internal development capabilities and to increase
ownership of technology and intellectual property. During fiscal 2005, we continued to enhance our
internal product development capabilities with the acquisitions of Relic Entertainment (“Relic”), located
in Canada, Blue Tongue Entertainment Limited (“Blue Tongue”), located in Australia, and with the
formation of a new studio, Concrete Games, located near San Diego, California. With the addition of
these studios and expansion in our existing studios, our worldwide product development operations now
include over 900 people located at our corporate offices and in 10 studios. Releases in fiscal 2005 that were
developed by our studios included The Incredibles, MX v. ATV Unleashed, Polar Express, The Punisher, The
SpongeBob Square Pants™ Movie, and Warhammer 40,000: Dawn of War.
We are dedicating significant internal development resources to developing software for next-generation
platforms and we expect to release games through the growth of the installed base of the hardware. We
plan to continue creating owned intellectual properties and developing them internally. Additionally, we
are developing proprietary tools and technologies for use across our studio organization. We plan to
continue to expand our internal development capabilities by selectively acquiring or establishing
development studios and through internal growth of existing studios.
•Expand international business
As the global gaming market continues to grow, we believe that international markets represent a
significant growth opportunity for us. We distribute our products in more than 75 countries and territories
outside of North America. In fiscal 2005, we established an office in Spain and we also operate
international offices in the United Kingdom, Australia, France, Germany and Korea. In fiscal 2006, we
expect to continue expanding our sales force in Europe by establishing direct sales forces in Austria,
Eastern European countries, the Benelux countries, Italy and the Nordic territories. We expect to expand
our Asia Pacific sales forces in New Zealand and Japanand are targeting new territories, such as China,
for expansion. In addition, we plan to continue developing and acquiring content that sells well
internationally ( e.g., Disney/Pixar, World Wrestling Entertainment ™ and Warhammer 40,000: Dawn of
War) and targeting wireless gaming applications to appropriate foreign markets.
•Become a leading player in wireless interactive entertainment
The mobile phone has evolved from a voice-only device to a personal data and voice communication
device that includes technologies that enable multimedia applications, including games. We plan to