THQ 2009 Annual Report Download - page 43

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of releasing 25 fewer SKUs in fiscal 2009 as compared to fiscal 2008, which was primarily due to a decrease
in titles from our kids business. A SKU is a version of a title designed for play on a particular platform. The
decrease in units sold was also the result of fewer units sold of WWE Smackdown vs. Raw 2009 and Wall-E
in fiscal 2009 compared to sales of WWE Smackdown vs. Raw 2008 and Ratatouille in fiscal 2008.
Additionally, there was a decrease in the average selling price on our new releases in fiscal 2009 as
compared to fiscal 2008. The decrease in the average selling price of our new releases was primarily due to:
• a shift in title mix on the Wii platform toward lower priced titles such as Big Beach Sports and All
Star Cheer, and
• a decrease in the average selling price on Smackdown vs. Raw 2009 in fiscal 2009 as compared to
Smackdown vs. Raw 2008 in fiscal 2008, as well as a decrease in average selling price on Wall-E in
fiscal 2009 as compared to Ratatouille in fiscal 2008. The decrease in average selling price on these
titles was due to a decrease in the gross selling price as well as a higher percentage of fiscal 2009
estimates for price protection as compared to fiscal 2008.
These decreases were partially offset by the net deferred revenue activity on our new releases.
Net sales of our catalog titles remained relatively flat, however, we had a decline in the number of catalog
units shipped in fiscal 2009 as compared to fiscal 2008. The decline in units shipped was partially offset by
the fiscal 2009 recognition of the fiscal 2008 deferred revenue. Additionally, our catalog titles sold at
slightly higher average selling prices in fiscal 2009 as compared to fiscal 2008.
The following table details our net sales by owned intellectual property and licensed titles for fiscal 2009
and fiscal 2008 (in thousands):
Fiscal Year Ended March 31, Increase/
2009 2008 (Decrease) % Change
Owned intellectual properties . . $278,586 33.6% $ 246,515 23.9% $ 32,071 13%
Licensed ................. 551,377 66.4 783,952 76.1 (232,575) (29.7)%
Consolidated net sales ....... $829,963 100.0% $1,030,467 100.0% $(200,504) (19.5)%
Net sales of games based on our owned intellectual properties increased by $32.1 million in fiscal 2009 as
compared to fiscal 2008. Fiscal 2009 net sales of games based on our owned intellectual properties were
driven by fiscal 2009 new releases such as Saints Row 2, Big Beach Sports and DeBlob, as well as continued
sales of the fiscal 2008 release of MX vs. ATV: Untamed and other catalog titles. We released seven fewer
SKUs based on our owned intellectual properties in fiscal 2009 as compared to fiscal 2008. Excluding the
impact of deferred revenue in each year, net sales of games based on our owned intellectual properties
would have remained relatively flat in fiscal 2009 as compared to fiscal 2008.
Net sales of games based on our licensed properties decreased by $232.6 million in fiscal 2009 as compared
to fiscal 2008 primarily due to a decrease in the number of units sold. The decrease in units sold was
primarily the result of releasing 18 fewer SKUs based on our licensed properties in fiscal 2009 as compared
to fiscal 2008, which was primarily due to a decrease in titles from our kids business. We experienced
decreases in sales of games based on both our Disney•Pixar and Nickelodeon licenses due to an overall
softening in our kids business.
We also had a decrease in sales of games based on the WWE license primarily due to fewer units sold of
WWE Smackdown vs. Raw 2009 in fiscal 2009 compared to sales of WWE Smackdown vs. Raw 2008 in
fiscal 2008, partially offset by net sales of WWE Legends of Wrestlemania released in the fourth quarter of
fiscal 2009. The decrease in sales of games based on the WWE license was also due to a decrease in the
average selling price on Smackdown vs. Raw 2009 in fiscal 2009 as compared to Smackdown vs. Raw 2008 in
fiscal 2008, which was due to a decrease in the gross selling price as well as a higher percentage of
fiscal 2009 estimates for price protection as compared to fiscal 2008.
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