THQ 2004 Annual Report Download - page 29

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Expiration
Manufacturer Platform Territory Date(s)
Nintendo Game Boy Color All countries in the Western Hemisphere March 2006
Nintendo Game Boy Color Europe,Australia and New Zealand October 2005
Nintendo Game Boy Advance All countries in the Western Hemisphere July 2004
Nintendo Game Boy Advance Europe,Australia and New Zealand April 2006
Nintendo GameCube All countries in the Western Hemisphere April 2005
Nintendo GameCube Europe, Australia and New Zealand April 2006
Sony PlayStation United States, Canada, Mexico and Latin America August 2006
Sony PlayStation Europe, Australia and New Zealand December 2005
Sony PlayStation 2 United States and Canada March 2005(1)
Sony PlayStation 2 Europe,Australia New Zealand, certain
countries in Africa and the Middle East March 2005(2)
Sony PlayStation and PlayStation 2 Korea March 2006(1)
Microsoft Xbox (3) November 2004
(1) The PS2 Licensed Publisher Agreement provides for an automatic annual renewal unless either party terminates the agreement by January 31 of the applicable year.
(2) The PS2 Licensed Publisher Agreement provides for an automatic annual renewal unless either party terminates the agreement by February 28 of the applicable year.
(3) The territory is determined on a title-by-title basis.
Nintendo charges us an amount for each Nintendo Game Boy Advance and Game Boy Color cartridge manufactured. This amount varies based, in part,
on the memory capacity of the cartridges. Nintendo, Sony and Microsoft console agreements include a charge for every disc manufactured.The amounts
charged by the manufacturers for both console discs and handheld cartridges include a manufacturing, printing and packaging fee as well as a royalty for
the use of the manufacturer’s name, proprietary information and technology, and are subject to adjustment by the manufacturers at their discretion.The
manufacturers have the right to review, evaluate and approve a prototype of each title and the title’s packaging.
In addition, we must indemnify the manufacturers with respect to all loss, liability and expense resulting from any claim against the manufacturer involving
the development, marketing, sale, or use of our games, including any claims for copyright or trademark infringement brought against the manufacturer. As
a result, we bear a risk that the properties upon which the titles are based, or that the information and technology licensed from the manufacturer and
incorporated in the products, may infringe the rights of third parties. Our agreements with our independent software developers and property licensors
typically provide for us to be indemnified with respect to certain matters. If any claim is brought by a manufacturer against us for indemnification,
however, our developers or licensors may not have sufficient resources to, in turn, indemnify us. Furthermore, these parties’ indemnification of us may not
cover the matter that gives rise to the manufacturer’s claim.
Each platform license may be terminated by the manufacturer if a breach or default by us is not cured after we receive written notice from the
manufacturer, or if we become insolvent. Upon termination of a platform license for any reason other than our breach or default, we have a limited
period of time to sell any existing product inventory remaining as of the date of termination. The length of this sell-off period varies between 90 and 180
days, depending upon the platform agreement. We must destroy any such inventory remaining after the end of the sell-off period. Upon termination as a
result of our breach or default, we must destroy any remaining inventory.
PRODUCTS
Some of our individual titles make up a substantial portion of our gross sales. The following list identifies games that generated more than 10% of our
gross sales during the fiscal year ended March 31, 2004, the twelve months ended March 31, 2003, and the calendar years ended December 31, 2002
and 2001:
• In fiscal year ended March 31, 2004, no title generated more than 10% of our gross sales.
• In the twelve-month period ended March 31, 2003, WWE SmackDown! Shut Your Mouth for the Sony PS2 generated 12.2% of our gross sales.
• In the year ended December 31, 2002, WWE SmackDown! Shut Your Mouth for the Sony PS2 generated 10.8% of our gross sales.
• In the year ended December 31, 2001, WWF SmackDown! “Just Bring It” for the Sony PS2 generated 14.6% of our gross sales.
26:27
THQ : 2004 : ANNUAL REPORT