This is a very exciting time for the videogame industry and for THQ. The industry fundamentals are great and we have some interesting emerging trends in our markets. We’re pleased with our strong pipeline of unique and innovative games that address many of these trends and position THQ for success on a global scale.

As we enter E3 2008, the videogame market is extremely healthy and more dynamic than ever. Total software sales in North America and Europe topped $20 billion last year, up 30% from calendar 2006, and we are expecting double-digit growth this year. We also saw growth in hardware units of more than 30% last year, and we expect hardware units to grow in the double digits this year, which is good news for future software sales.  

We are essentially in the second year of what feels like at least a six-to-eight year hardware cycle. The PlayStation 3 is just starting to hit its stride, as publishers and developers begin to master its advanced Cell technology and publish great software for the platform. The Xbox 360’s robust online gaming platform has created a strong online community and has helped transform the way we approach game design and development. 

The Nintendo Wii continues to attract new consumers to gaming, and has been a major driver of the growth in female and older gamer demographics. According to The NPD Group, female gamers were the fastest growing segment from 2004-2007, at 46%, with over-35 gamers following close behind at 43%. In addition, handheld gaming continues to grow at a rapid pace, led by the Nintendo DS and a resurgence of the PSP.



With so many great platforms, each with distinct capabilities reaching different audiences, we believe it is more important than ever before to segment the market when determining our publishing strategy.