THQ 2007 Annual Report Download - page 11

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3
In fiscal2007, we successfully executed upon our strategies by launching Cars in all major markets
throughout the world across nine separate platforms, including new generation consolesMicrosoft
Xbox 360 and Nintendo Wii. We also increased sales of games based on theWWE SmackDown vs. Raw
franchise with theintroduction of that property to the Microsoft Xbox 360. We grew revenues from our
Nickelodeon franchisewith theintroductionof gamesbased upon their Avatar propertyand the continued
strength of games based on SpongeBob SquarePants andNicktoons.
In the fiscal year ending March 31, 2008 (“fiscal 2008”), we planto continueto execute on this strategy by
shipping mass-market titles for new generation consoleand handheldplatforms, PlayStation 2and PC,
including the following games based upon our key licenses: Disney" Pixar’s Ratatouille , on even more
platforms than Cars in fiscal 2007, a multi-platform release of thesequel to Cars called Cars: Mater-National;
WWE®SmackDown®vs. Raw®on six platforms up from three a year ago, including the Wii, PS3 and DS
platforms for the first time; and Nickelodeon titles led by Avatar,Nicktoons and SpongeBob SquarePants .Also
for fiscal 2008, we plan to introduce a new Nickelodeon brand, El Tigre on the DS platform.
••
Sequel and extend our growing portfolioof ownedintellectual property
In order to grow revenue and increase profitability, we believe it is important for us to create and acquire
newintellectual property, expandour internal development capabilities and increase ownership of
developmenttools andtechnology.
In fiscal 2007, we executed on this strategy with the launch of our internally developedSaints Row
franchise, the internally developed Company of Heroes franchise, the release of a sequel in our Destroy
All Humans! franchiseandtheintroduction of PC game Titan Quest ™. In fiscal 2008, we plan to introduce
internally developed Frontlines ™ : Fuel of War™ .We also plan to release a sequel from ourrecently
acquiredStuntman franchise, Stuntman® : Ignition™, our Juiced franchise,Juiced™2: Hot Import Nights ,
thenext installment in our MX vs ATV franchise and the next chapterinourCompanyof Heroes
franchise, all developed internally by ourStudio System.
We plan to continue expanding our internal development capabilities by selectively acquiring and
establishing development studios and throughinternal growth of our existing studios. During fiscal 2007,
we expanded our internal Studio System with the acquisitions of Paradigm Entertainment, locatedoutside
of Dallas, Texas, the developers of ourStuntman franchise, and Mass Media Inc., locatedin Moorpark,
California, a PlayStation 3 development studio. With the addition of these studios, we now have 16 studios,
which are staffed by producers, game designers, software engineers,artists, animators and game testers.
Our worldwide product development operations have grown and now include morethan 1,500people, an
increase of more than 300people over fiscal 2006. Some of the titles released in fiscal 2007 that were
developedby our StudioSystem includedowned properties: Saints Rowand Company of Heroes™and
licensed properties: Cars,Avatar: TheLast Airbender,Barnyard,Nicktoons: Battle for Volcano Island and
Warhammer®40,000™: Dawn of War: Dark Crusade™. In fiscal 2008 we plan to releaseseveral internally
developed games including owned properties:Frontlines: Fuel of War, Juiced 2: HotImport Nights,MX vs.
ATV: Untamed™,Stuntman: Ignition,Company of Heroes™ : Opposing Fronts™and licensed properties:
Ratatouille and a sequel to Cars,Cars: Mater-National; Avatar: The BurningEarth,Nicktoons, and others.
•Pursue growing trends of digital content creation and distribution
As the interactive entertainment industry continues to evolve, newrevenue streams are emerging from the
growing trends of digital content creation and distribution. While still nascent, these revenueopportunities
are expected to increase significantly in futureyears. We are currently focusedon generating revenuefrom
in-game advertising, downloadable content/micro-transactions, mobile content and massively multiplayer
online gaming.