Take-Two Interactive Software, Inc. Software, Interactive Take-Two Annual Report 2008 Take-Two Interactive Software, Inc. Annual Report 2008 Officers Corporate Offices Corporate Information Strauss Zelnick Corporate Headquarters Stockholder Information Creativity. Chairman A copy of the Company’s Annual Report Take-Two Interactive Software, Inc. on Form 10-K, as filed with the Securities Ben Feder 622 Broadway and Exchange Commission, will be Chief Executive Officer New York, NY 10012 furnished without charge upon written Innovation. (646) 536-2842 request to Investor Relations at the Lainie Goldstein Corporate Headquarters. Chief Financial Officer Take-Two Interactive Software Europe, Ltd. Saxon House Investor Relations Efficiency. Seth Krauss 2-4 Victoria Street [email protected] Executive Vice President and General Windsor, Berkshire SL4 1EN Counsel 01753 496 600 Independent Auditors Ernst & Young LLP Karl Slatoff Take-Two Pte Ltd. 5 Times Square Executive Vice President 47 Scotts Road New York, NY 10036 — Midnight Club: Los Angeles #11-01 Goldbell Towers Board of Directors Singapore 228233 Transfer Agent The best way to see Los Angeles at American Stock Transfer & Trust Company breakneck speeds recreated in stunning Strauss Zelnick —Chairman Principal Operating Offices 59 Maiden Lane detail. Driving a Lamborghini down Michael Dornemann — New York, NY 10038 Sunset Boulevard feels like the real thing — Lead Independent Director Rockstar Games, Inc. if not better. Robert Bowman 622 Broadway Common Stock Information Grover Brown New York, NY 10012 The Company’s common stock is listed Ben Feder on the NASDAQ Global Select Market John Levy 2K Games, Inc. under the symbol TTWO. J Moses 2K Sports, Inc. Michael Sheresky 2K Play, Inc. www.take2games.com 10 Hamilton Landing Novato, CA 94949 Saleen S302 Extreme —Midnight Club: Los Angeles Jack of All Games, Inc. 9271 Meridian Way West Chester, Ohio 45069 Johnny Klebitz —Grand Theft Auto IV: The Lost and Damned — Grand Theft Auto IV Phenomenal critical and commercial success that redefined how people play video games. The Lost and Damned, the first downloadable episode forGrand Theft Auto IV, expanded the game with new storylines, characters and features. — BioShock The winner of over 50 Game of the Year awards in 2007 and among the all-time highest rated games for both Xbox 360 and PLAYSTATION 3. The Barker —Carnival Games — Carnival Games A smash hit franchise on the Wii and DS with over 4 million units sold. Big Daddy —BioShock Kevin Garnett —NBA 2K9 — NBA 2K9 Once again the top rated and top selling NBA title. A shining example of how thin the line has become between the graphical quality of a televised NBA game and an NBA video game. Creativity. — Delivered record results of $1.5 billion in revenue and Innovation. $1.28 in EPS. Effi ciency. Ben Feder Chief Executive Offi cer — Ongoing innovation through gameplay, technology, new revenue streams and distribution opportunities. — Home to the leading creative talent, building and developing a strong portfolio of top selling franchises. Seth Krauss Executive Vice President and General Counsel Karl Slatoff Executive Vice President Dear Shareholders, nurture creative passion, and invest the resources to deliver triple-A products that 2008 was a monumental year for Take-Two. capture both mindshare and market share. Our Company delivered record revenues This year, we entered into new long-term and profits, despite external distrac- agreements with key talent at Rockstar tions and a challenging global economy. Games who have created some of our In addition to the extraordinary consumer blockbuster brands, including Grand Theft response to Grand Theft Auto IV, these Auto, Midnight Club, Max Payne, Bully results refl ected the actions we began taking and Red Dead Revolver. These agreements in early 2007 to transform our business, meaningfully align the interests of our including investment in our superb creative creative teams with our shareholders. Strauss Zelnick teams, a highly disciplined approach to Chairman building our portfolio of world-class titles, Innovation the divestiture or revitalization of non-core We continue to innovate in both gameplay businesses, and continued emphasis and technology. Our proprietary Rockstar on effi ciency throughout our company. Advanced Game Engine (RAGE) and other We are very proud of these technologies enable our studios to create achievements that illustrate the three entertainment experiences that feature tenets of our strategy — Creativity. incredible realism, which further immerse Innovation. Effi ciency. consumers into our virtual worlds. Driving a Lamborghini down Sunset Boulevard Creativity in Rockstar’s Midnight Club: Los Angeles Our key drivers in 2008 were Grand Theft feels just like the real thing — if not bett er. Auto IV, Midnight Club: Los Angeles, 2K Sports’ NBA 2K9 is a shining example Lainie Goldstein NBA 2K9, Carnival Games, and Sid Meier’s of how thin the line has become between Chief Financial Offi cer Civilization Revolution. the graphical quality of a televised NBA Grand Theft Auto IV in particular was game and an NBA video game. We’ve a phenomenal critical and commercial incorporated an exciting feature into some success, and surpassed the all-time of our sports titles called Living Rosters, entertainment records for day one and which tracks real-life player performances, week one retail sales by dollar value including streaks, slumps and injuries that for all media. This franchise continues to enable our virtual athletes to perform true- redefine how people play video games. to-life throughout their entire seasons. More and more, consumers and observers In addition to creating unique enter- alike see video games as a true art form tainment experiences, we are innovating that can rival any other media — both through new revenue streams and distri- creatively and commercially. bution opportunities. We launched — Committ ed to prudently With more than 1,500 of the industry’s our fi rst downloadable content off ering managing our business best developers working in our 15 studios for BioShock in 2008 and redefi ned what and maintaining our sound worldwide, Take-Two has the leading downloadable content can be with the fi nancial position. creative talent building and developing what February 2009 release of The Lost and we believe to be the strongest portfolio of Damned, the fi rst of two episodes for top selling franchises in the action/adven- Grand Theft Auto IV. We also released ture, racing, sports, strategy, role-playing downloadable content in early 2009 for and family gaming genres. We respect and Midnight Club: Los Angeles that featured new cars and maps which added hours We improved the operations of our distri- revenue streams, such as downloadable of new racing experiences. While still an bution business, and entered into an outsourc- content, networked gameplay and micro- emerging area, we believe that download- ing agreement for the pick, pack, ship and transactions. We will seek to capitalize able content — when done right —off ers warehousing functions previously handled by on these opportunities to maximize the the potential to deepen brand loyalty our Jack of All Games subsidiary. This allows value of our intellectual property. among consumers, extend the lifecycle of Jack of All Games to focus on purchasing, We recognize the challenges that every our titles, diversify our revenue streams sales and service for their customers and company faces today, and remain stead- and enhance profi tability. enhanced the Company’s profi tability. fast in our determination to deliver value Today’s consumers demand triple-A We took steps to maintain our access by being the most creative, the most inno- gaming experiences and we continue to to the credit markets prior to the economic vative and the most effi cient company in deliver them. Our portfolio includes some downturn. Shortly aft er our management the interactive entertainment industry. We of the biggest and most popular brands in team joined Take-Two in 2007, we obtained are committ ed to off ering the best home our industry today. We have 15 internally a credit facility to provide additional fl ex- for top creative talent, sett ing new bench- owned brands with sales over one million ibility for our business. Given the volatility marks with triple-A products, making units each and 30 individual products that of current market conditions, we were strategic investments for growth, prudently have each sold over one million units. These pleased to have this facility already estab- managing our business, and maintaining successes refl ect the dedication and vision lished and available for opportunities that our sound fi nancial position. of our creative teams to set new bench- may arise. As a matt er of prudence, we We would like to thank our colleagues marks in interactive entertainment. drew down $70 million on this facility as of for making this a record year. We also thank We currently have two of the three all- October 31, 2008. our shareholders for your continued sup- time highest rated titles for Xbox 360 and Our strategy has been to release only a port and look forward to reporting on our PLAYSTATION 3 with Grand Theft Auto IV select number of triple-A games that are progress in the year ahead. and BioShock. NBA 2K9 was once again the internally owned and developed, as well as top rated and top selling basketball game, selectively publishing some licensed titles. Sincerely, and Carnival Games was a smash hit on the We believe this continues to be the right Nintendo Wii with over 3 million units sold. strategy for our business. The strength of our products is under- Our team is prepared to manage scored by the vast critical acclaim that they these challenging and uncertain times, Strauss Zelnick, Chairman receive. We won Spike TV’s Video Game of and has adopted a prudent outlook for the Year Award for the second consecutive fiscal year 2009.