THQ 2011 Annual Report Download - page 16

sale. As a result, the quarter in which we generate the highest shipping volume may be different than the quarter in which we
recognize the highest amount of net sales. Our results can also vary based on a number of factors, including title release dates,
consumer demand for our products, market conditions and shipment schedules.
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Our largest customers worldwide include Best Buy, GameStop, Target and Wal-Mart. We also sell our products to other national
and regional retailers, discount store chains, specialty retailers and distributors. Excluding the impact of changes in deferred net
revenue, GameStop and Wal-Mart each accounted for more than 10% of our gross sales in fiscal 2011. In fiscal 2011 we entered
into two new "supplier" agreements with Wal-Mart, which includes both Wal-Mart and Sam's stores (one for our console products
and one for our PC products). The supplier agreements address certain standard terms and conditions, such as payment terms,
between us and Wal-Mart; however, the agreements do not contain any commitment for Wal-Mart to purchase, or for us to sell,
any minimum level of products. We do not have any agreements with GameStop. With respect to both Wal-Mart and GameStop,
as well as our other customers, the customer submits a purchase order for each purchase request, and that purchase order contains
basic pricing and delivery terms for such purchase. None of the purchase orders individually, with any customer, accounted for
more than 10% of the Company's consolidated net sales for fiscal 2011. A substantial reduction in purchases, termination of
purchases, or business failure by any of our largest customers could have a material adverse effect on us.
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As a publisher of interactive entertainment software, we consider ourselves to be part of the entertainment industry. At the most
fundamental level, our products compete with other forms of entertainment, such as motion pictures, television, music, Internet
and online services for the leisure time and discretionary spending of consumers. Our primary competition for sales of video games
comes from Microsoft, Nintendo and Sony, each of which is a large developer and publisher of software for its own platforms, as
well as other publishers and developers of interactive entertainment software, such as Activision/Blizzard, Electronic Arts, Sega,
Take-Two Interactive Software, and Ubisoft. Additionally, certain large intellectual property owners, such as Disney, Viacom,
and Warner Bros. have established video game units to develop and publish games based upon certain of the properties they own.
In recent years, our competition has expanded to include online publishers of interactive entertainment, such as Zynga.
In addition to competing for video game sales, we compete with our competitors over licenses and brand-name recognition, access
to distribution channels, and effectiveness of marketing and price. We also face intense competition from our competitors for the
services of talented video game producers, artists, engineers and other employees.
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As of March 31, 2011, we employed approximately 1,750 people, of whom over 725 were outside the United States. We believe
that our ability to attract and retain qualified employees is a critical factor in the successful development and exploitation of our
products and that our future success will depend, in large measure, on our ability to continue to attract and retain qualified employees.
None of our employees are represented by a labor union or covered by a collective bargaining agreement and we consider our
relations with employees to be favorable.
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See Part II—Item 7, "Management Discussion and Analysis of Financial Condition and Results of Operations" and "Note 24 —
Segment and Geographic Information" in the notes to the consolidated financial statements included in Part II—Item 8.
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We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission
("SEC"). Our SEC filings, including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-
K, and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act are available to the public
free of charge over the Internet at our website at http://www.thq.com or at the SEC's web site at http://www.sec.gov. Our SEC
filings will be available on our website as soon as reasonably practicable after we have electronically filed or furnished them to
the SEC. Information contained on our website is not incorporated by reference into this 10-K. You may also read and copy any
materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can view our Code of
Business Conduct and Ethics, our Code of Ethics for Executive Officers and Other Senior Financial Officers and the charters for
each of our committees of the Board of Directors free of charge on the corporate governance section of our website.
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