THQ 2006 Annual Report Download - page 2

Download and view the complete annual report

Please find page 2 of the 2006 THQ annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

w:
ABOUT THQ INC.
THQ Inc. (NASDAQ: THQI) is a leading worldwide developer and publisher of interactive entertainment software.
The company develops products for all popular game systems, personal computers and wireless devices. Headquar-
tered in Los Angeles County, California, THQ sells product through its global network of offices located throughout
North America, Europe and Asia Pacific.
A DYNAMIC INDUSTRY
THQ operates in the dynamic interactive entertainment industry. The video game industry is currently
transitioning to a new generation of hardware, marked by the November 2005 launch of Microsoft’s
Xbox 360™. New consoles from Sony and Nintendo are expected in November of 2006. While the transi-
tion poses challenges for video game publishers in the near term, in each of the past hardware transitions,
the market for video games expanded significantly.
SOFTWARE DOLLAR GROWTH
NORTH AMERICA AND EUROPE
According to independent research firm IDG, video game software dollars in North America and Europe
are expected to grow 30% to $18 billion in 2009 from $14 billion in 2005. In addition, new revenue
opportunities from wireless gaming, in-game advertising and online console gaming are expected to grow
to $5 billion in 2009 from $1 billion in 2005, per DFC Intelligence and Montgomery & Co.
2000 2001 2002 2003 2004 2005 2006E 2007E 2008E 2009E
$ Billion
PC Legacy Platforms Current Generation
Next Generation Future Generation Emerging Revenue
Opportinities
25
20
15
10
5
0
Sources: IDG, DFC Intelligence and Montgomery & Co.
This annual report contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, the
company’s expectations for growth in fiscal 2007 and its long-term growth. These forward-looking statements are based on current expectations, estimates and projections about the business of THQ Inc.
and its subsidiaries (collectively referred to as “THQ”) and are based upon management’s beliefs and certain assumptions made by management. Such forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive and technological
factors affecting the operations, markets, products, services and pricing of THQ. Unless otherwise required by law, THQ disclaims any obligation to update its view on any such risks or uncertainties or to
revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the risk factors and the information that could materially affect THQ’s financial
results, described in its Annual Report on Form 10-K for the fiscal period ended March 31, 2006, and particularly the discussion of risk factors that may affect results of operations set forth therein. Readers
are cautioned not to place undue reliance on these forward-looking statements, which speak only as of June 21, 2006.