THQ 2007 Annual Report Download - page 40

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32
Thefollowing table detailsour netsales by territory for fiscal2007 and 2006 (in thousands):
Fiscal Year Ended March 31,Increase/
2007 2006 (Decrease) %Change
North America ............. $600,159 58.4% $489,945 60.7% $110,214 22.5%
Europe .................... 365,406 35.6 269,928 33.5 95,478 35.4%
Asia Pacific................ 61,291 6.0 46,687 5.8 14,604 31.3%
International............... 426,697 41.6 316,615 39.3 110,082 34.8%
Consolidated netsales.......$1,026,856 100.0% $806,560 100.0% $220,296 27.3%
North America and international net sales in fiscal 2007 were primarily driven by therelease of Cars, from
the Disney"Pixarfranchise, WWE SmackDown vs. Raw 2007,and the successful launch of Saints Row, a
newinternally developed and owned intellectual property.
Net sales in fiscal 2007 increased27% over fiscal 2006, from $806.6 million to $1,026.9 million. The
increase in net sales was primarily due to thefollowing:
•growth in sales from games from our Disney•Pixar license, led by the release of Cars, which shipped
nearly eight million units in the fiscal 2007. Sales of Carsoutperformed sales of The Incredibles: Rise
of the Underminer, whichwasreleased in fiscal 2006 and was a sequel to The Incredibles, which was
released in fiscal 2005;
•sales of WWE SmackDown vs. Raw 2007,which shipped four million units in fiscal 2007,
outperforming sales of WWE SmackDown vs. Raw 2006 in fiscal 2006;
•growth in sales of games from ourNickelodeon license, which increased by approximately 22% over
sales from this license in fiscal 2006;and
•sales of Saints Row, a newinternally developed and owned intellectual property.
In fiscal 2007, our North American sales increasedby 22.5% overfiscal 2006. Our international sales
increased by $110.1 million, or 35% in fiscal 2007 dueto marketing and sales expansion in the international
markets as well as therelease of gameswith increased internationalappeal.While we expect netsales in
North America to continue to constitute the largest portion of our consolidated net sales in fiscal 2008, we
expectnetsales forNorth America as a percentage of total sales to decreaseslightly as we continueto
expand our international direct sales andproduct mix. We will continue to focus on growingsales
internationally in fiscal2008as we expandour product portfolio and direct salesforces in the international
markets. In fiscal2007, we established sales officesin Italy and Mexico. In fiscal 2008 we will look to
expand our direct sales forceinto Eastern Europe, and we continue to explore opportunities in Asia,
especially China.
Changes in foreign currency rates increased reportedinternational net sales by $25.2 million or 6% in
fiscal 2007, as compared to fiscal 2006. Excluding the impacts of foreign exchange rates, international net
sales increased by 22% in fiscal 2007.