Wednesday
Dec232009

THQ Resolves Billion-Dollar Videogame Smackdown Lawsuit With WWE, Jakks

December 23, 2009: A legal battle among World Wrestling Entertainment, THQ and Jakks Pacific involving  the  billion-dollar WWE videogame and toy licenses has been settled, with a new alliance in place that could garner another billion.

The three companies had sued each other over a deal that began in 1999 and was scheduled to end on Dec, 31. Under the three-party settlement, the companies will withdraw all claims and end all litigation "without any party admitting to wrongdoing," according to WWE, THQ and Jakks. Under terms of the resolution, THQ and Jaaks have agreed to dissolve their THQ/Jakks Pacific joint venture, enabling THQ to sign a new eight-year deal directly with WWE granting THQ the exclusive worldwide rights to develop and publish videogames based on WWE content beginning Jan. 1, 2010.

THQ sued Jakks earlier this year after Jakks said it would renew its deal with WWE, which THQ said Jakks had not been authorized to do. THQ said it would pay WWE $13.2 million and would also pay Jaaks $20 million over the next four years in addition to royalties due for the period ending December 31, beginning with a payments of $6 million due June 2010.

From the time WWE entered the videogame market in 1990 through Sept. 30, 2009, THQ has reported net sales of WWE videogames in excess of $1.4 billion. According to marketing and research firm NPD Group, WWE  has been one of the top ten best-selling brands since 1995, including the WWE SmackDown vs. Raw 2010 videogame released this year.

“This agreement ensures that WWE games will continue to be an important cornerstone of THQ’s annual release schedule for the long term,” Brian Farrell, THQ president and CEO, said in a statement. “We look forward to working directly with WWE to expand their brand in the video game space through continued game play innovation and increased online delivery of WWE content.”

According to Vince McMahon, WWE chairman and CEO, “This new licensing agreement will ensure that we continue our tremendous success in the videogame industry in the years to come.”

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