THQ 2009 Annual Report Download - page 23

including contractual provisions under various license arrangements. If we are required to enter into such
agreements or take such actions, our operating margins may decline as a result.
We cannot be certain of the future effectiveness of our internal controls over financial reporting or the
impact of the same on our operations or the market price for our common stock.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to include in our Annual
Report on Form 10-K our assessment of the effectiveness of our internal controls over financial reporting.
Furthermore, our independent registered public accounting firm is required to report on whether it
believes we maintain, in all material respects, effective internal controls over financial reporting. Although
we believe that we currently have adequate internal controls procedures in place, we cannot be certain that
future material changes to our internal controls over financial reporting will be effective. If we cannot
adequately maintain the effectiveness of our internal controls over financial reporting, we might be subject
to sanctions or investigation by regulatory authorities, such as the Securities and Exchange Commission.
Any such action could adversely affect our financial results and the market price of our common stock.
Rating systems and future legislation may make it difficult to successfully market and sell our products.
Currently, the interactive software entertainment industry is self-regulated and rated by the Entertainment
Software Rating Board (‘‘ESRB’’). Our retail customers take the ESRB rating into consideration when
deciding which of our products they will purchase. If the ESRB or a manufacturer determines that a
product should have a rating directed to an older or more mature consumer, we may be less successful in
our marketing and sales of a particular product.
From time to time, legislation has been introduced at the local, state and federal levels for the
establishment of a government mandated rating and governing system in the United States and in foreign
countries for our industry. Various foreign countries already allow government censorship of interactive
entertainment products. We believe that if our industry were to become subject to a government rating
system or other regulation, our ability to successfully market and sell our products could be adversely
affected.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our principal corporate and administrative office is located in approximately 100,000 square feet of leased
space in a building located at 29903 Agoura Road, Agoura Hills, California. Including this office, the
following is a summary of the principal leased offices we maintained as of May 15, 2009:
Purpose North America Europe Asia Pacific Total
Sales and administrative ......................... 123,900 64,700 19,200 207,800
Product development ........................... 353,500 6,100 23,700 383,300
Total leased square footage ..................... 477,400 70,800 42,900 591,100
We also own 10,820 square feet of space in Phoenix, Arizona, which serves as our data center and motion
capture studio.
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