THQ 2007 Annual Report Download - page 10

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2
We develop our games using both internalandexternal resources. We currently have 16 internal
developmentstudioslocated in the United States, Australia, theUK andCanada. We also contract with
third-party developers around theworld to developour products for us.
Our globalsales networkincludes offices throughout North America, Europe and Asia Pacific. In the U.S.
and Canada, we market anddistributegamesdirectlyto mass merchandisers, consumer electronic stores,
discount warehouses andother national retail chainstores. Internationally,we market anddistribute
games on adirect-to-retailbasis in the territories wherewe have adirect sales force and to a lesser extent,
in the territorieswhere we do not have adirect sales force, third parties distribute our games. We also
globallymarket and distribute games andother content for wireless devices through major wireless
carriers.
We wereoriginally incorporated in New York in 1989 as Trinity Acquisition Corporation, which changed
its name in 1991 to T.HQ, Inc. following a merger with THQ, Inc., a California corporation. We were
reincorporated in Delaware as THQ Inc. in 1997. Our principal executive offices are locatedat 29903
Agoura Road, AgouraHills,California 91301, andour telephone number is (818) 871-5000. Our internet
address is http://www.thq.com.(2)
Narrative Description of Business
Our corporate goal is to grow ourrevenues at or above themarket and continue to increaseour
profitability. Our business strategy and a detailed summary of our business operations are detailedbelow
and should be read in conjunction with our“Risk Factors,” included in Item 1A herein.
Strategy
In order to increase our revenues and expand ourmarket share, we believe it is important to offer a broad
portfolio of titles for all ages that are playable on allpopular platforms. We are also focused on increasing
theprofitability of our business. We intend to do this by executing on the followingstrategies:
••
Increase sales and profits from our leading portfolioof mass-market franchises
We have grown and diversified ourproducts targeted at the mass market by securingkey content licenses.
We have leveraged our licensed brands by introducing new products and through continued sales of our
catalogof existing products. Our license with Pixar Animation Studios (“Pixar”) grants us the exclusive
interactive rights to publish up to two game conceptsbasedon each of the next four Pixar animatedfeature
films beginning with Ratatouille. Our license agreement with World Wrestling Entertainment(“WWE”)
through our joint venturewith JAKKS Pacific, Inc., grants us theexclusiverights to publish games based
on WWE across all viable game systems through2014. Our license agreement with Nickelodeongrants us
the exclusive right to publish games based on all existing and future Nickelodeon animated television and
moviepropertiestargeting kids ages 6-14 across all viable game systems through 2010. Additionally,we
have a content licensewith MGA for their Bratz brandand in fiscal2007 secured the exclusive rights to
develop video games based upon theUltimate Fighting Championship.
In order to increase sales and profits, our goal is to continue building high quality products based on our
leadingportfolio of mass-market franchises, market them aggressively and shift more development to our
internal development studios. In fiscal 2007, ourkey Disney "Pixar andNickelodeon titles were developed
by our internal studios. We also entered into along-term agreement with Yuke’s to continue to develop
games based on the WWE brand. We own less than a20% interest in Yuke’s, which has consistently
deliveredextremely high quality WWEgames since we started working with them in 1999.
(2)THQ, THQ Wireless andtheir respective logosaretrademarksand/or registered trademarks of THQ Inc.