THQ 2007 Annual Report Download - page 4

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THQ INC.PG.2
Pixar videogame to date. We shipped more than four million
units of
WWE® SmackDown® vs. Raw®
videogames and
four million units of our new Nickelodeon titles combined.
In the growing market of games aimed at girls, we shipped
more than 1.5 million units of our
Bratz™
title.
Life-to-date shipments now stand in excess of 30 million
units for each of our Disney•Pixar, Nickelodeon and WWE
franchises, and shipments of
Bratz
have now exceeded
three million units life-to-date.
In fi scal 2007, THQ added to this foundation of strong
licensed brands by securing the exclusive global
rights to publish games based on the Ultimate Fighting
Championship. The UFC is one of the fastest-growing
sports targeting the coveted 18–34 male demographic.
We look forward to continuing to build on our solid
foundation of both owned and licensed franchises to
support our future growth.
And although we believe we have one of the strongest
portfolios of licensed franchises, over time we expect
revenue from owned intellectual properties to increase at
a faster rate than from our licensed properties. We are
currently targeting about one third of revenues from
owned properties in fi scal 2008, up from 20% in fi scal 2007.
industry growth of 13% in the US. Our revenue from
Europe climbed 35% versus 11% market growth in the
major European territories and our Asia-Pacifi c revenue
increased 31% compared to 4% market growth in Australia/
New Zealand, our primary Asia-Pacifi c market.
Our global product portfolio and expanding marketing and
sales footprint drove THQ’s international revenue increase
to $427 million, or 42% of total revenue, up from $317
million and 39% of total revenue in fi scal 2006. In fi scal
2007, we opened new offi ces in Italy, Mexico and Switzerland.
In fi scal 2008, we expect continued growth in our international
revenue, which will help drive operating leverage as we ship
more units of each title.
Owned and Licensed Franchises to Support Future Growth
We’ve built a solid foundation of both owned and licensed
franchises. In fi scal 2007 we successfully launched new
owned and internally developed titles
Saints Row
and
Company of Heroes.
We now have six owned and internally
developed franchises that have exceeded the one-million-
unit shipment threshold.
THQ also grew revenue from our proven licensed franchises.
In fi scal 2007, we shipped nearly eight million units of games
based on Disney•Pixar’s
Cars
, making it the fastest-selling
FY07
$1.0B
L
I
C
E
N
S
E
D
I
P
8
0
%
O
W
N
E
D
I
P
FY08E
$1.1B
L
I
C
E
N
S
E
D
I
P
6
7
%
O
W
N
E
D
I
P
3
3
%
2
0
%
LICENSED IP OWNED IP
A FOCUS ON GROWING OWNED IP
THQ REVENUE MIX
Source: THQ
29%
38% 39%
42%
FY 04 FY 05 FY 06 FY 07
$0
$100
$200
$300
$400
$500
$ Millions
% of total revenue
INCREASING INTERNATIONAL REVENUE
INTERNATIONAL REVENUE - ABSOLUTE DOLLARS
AND AS PERCENT OF TOTAL THQ REVENUE
Source: THQ