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INTRODUCTION
THQ Inc. (“THQ” or the “Company”) is a leading global developer and publisher of interactive entertainment software that is playable on the following platforms1:
• Home video game consoles such as Sony PlayStation and Sony PlayStation 2, Microsoft Xbox, and Nintendo GameCube;
• Handheld platforms such as Nintendo Game Boy Advance;
• Personal computers; and
• Wireless devices.
Our titles span most major interactive entertainment software genres, including action, adventure, children’s, driving, fighting, puzzle, role-playing,
simulation, sports and strategy.
Our software is based on intellectual property licensed or assigned from third parties or created internally. We continually seek to identify and develop
titles based on content from other entertainment media (such as movies and television programs), sports and entertainment personalities, popular sports
and trends or concepts that have high public visibility or recognition or that reflect the trends of popular culture. Our portfolio of licensed properties
includes the Disney/Pixar properties: Disney/Pixar’s Finding Nemo; The Incredibles, which is expected to be released this holiday season; and Cars,
which is expected to be released during the 2005 holiday season; Nickelodeon properties such as The Fairly OddParents and SpongeBob SquarePants; Hot
Wheels; Power Rangers; Scooby-Doo; Sonic the Hedgehog;World Wrestling Entertainment; as well as others.
We also develop software based on brands created by our eight internal development studios and by external developers under contract with us. Our
original brands include Destroy All Humans!™, Full Spectrum Warrior™, MX Unleashed, Splashdown®: Rides Gone Wild, S.T.A.L.K.E.R.: Shadow of Chernobyl,
and Tak and the Power of Juju (co-created with Nickelodeon). Other than games that we release on PCs, the manufacturers1or their authorized vendors
manufacture all of our products for us.
We market and distribute our software to customers including Wal-Mart, Toys “R” Us, Target, Best Buy, GameStop, Electronics Boutique, KB Toys,
Game Stores Group Ltd., and other regional and national general merchandisers, discount store chains, and specialty retailers. Geographically, we market and
distribute our software to retailers in 70 countries and territories through offices in North America, the United Kingdom, France, Germany,Australia and Korea.
In 2002,THQ formed THQ Wireless Inc. (“THQ Wireless”). THQ Wireless provides a comprehensive wireless entertainment solution, including games,
ring tones, wallpapers, messaging and information services for mobile phones with a current catalog of more than 50 titles.
We are a Delaware corporation that was re-incorporated in 1997. We were formerly incorporated in New York in 1989 under the name Trinity Acquisition
Corporation, which changed its name in 1990 to T.HQ, Inc. through a merger with THQ, Inc., a California corporation. Our principal executive offices are
located at 27001 Agoura Road, Calabasas Hills, California 91301, and our telephone number is (818) 871-5000. Our web site is at http://www.thq.com.
THQ and the THQ logo are registered trademarks of THQ Inc.
THE INTERACTIVE ENTERTAINMENT INDUSTRY AND TECHNOLOGY
The console, handheld, and PC games that we publish are made available to consumers on disc (usually a CD or DVD format) or cartridge media for use
solely on dedicated hardware systems. GBA is the only current platform that uses cartridges. Until 1996, most software for dedicated platforms was sold
in cartridge form. Since then, disc-based products have become increasingly popular because they have substantially greater data storage capacity and
lower costs than cartridges.
The first modern platform was introduced by Nintendo in 1985 using 8-bit technology. 8-bit means that the central processing unit, or chip, on which the
software operates is capable of processing data in 8-bit units. Subsequent advances in technology have resulted in continuous increases in the processing
power of the chips that power both the consoles and PCs. As the technology of the hardware has advanced, the software has similarly advanced, with
faster and more complex images, more lifelike animation and sound effects and more intricate scenarios. The larger data storage capacity of disc-based
media for systems such as PS2, Xbox and GameCube enables them to provide richer content and longer play than previous platforms. This new generation
of systems is based primarily on 128-bit technology. The latest handheld platform, GBA, uses 32-bit technology.
(1) Microsoft, Nintendo and Sony are referred to herein collectively as the “hardware manufacturers” or the “manufacturers.” Nintendo®, Game Boy®, Game Boy®Color, Game Boy®
Advance (“GBA”), GameCube™(“GameCube”) and Nintendo®64 (“N64”) are trademarks and/or registered trademarks of Nintendo of America Inc. (“Nintendo”). Sony
PlayStation®(“PS1”) and Sony PlayStation®2 (“PS2”) are trademarks and/or registered trademarks of Sony Computer Entertainment Inc. (“Sony”). Microsoft and Xbox®(“Xbox”)
are registered trademarks of Microsoft Corporation (“Microsoft”).
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THQ : 2004 : ANNUAL REPORT