Q: Can you give us a little background history on how this acquisition came about?

There were two converging events which drove the acquisition.

The first was that Warner Bros. has a history of working with Monolith and had placed a large project there, which was the Matrix Online. As a natural step to protect their investment, Warner Bros. acquired options on Monolith. Because Monolith was an independent developer, someone could come in and acquire Monolith. Warner Bros. did not want someone else coming in and taking the Matrix project out from under them or hurt it. Because of this deal, Warner Bros. was already set up to purchase Monolith in a very controlled and thought through process.

The second piece was that, over the course of recent years, the video game industry has grown. WB and the studio have taken a greater interest in the game industry, beyond licensing, and seeks to establish a leadership position within the game industry. In order to do that there are a lot of steps that they believe need to take place, a lot of which revolves around increasing overall studio competency in the video game space.

The studio came to the conclusion that being able to control some development capability was important, just like having film, music and tv production abilities are important, and that acquiring a game developer made sense. Once this decision was made, the next question was which developer made sense for us. We began taking a close look at the companies we had a working relationship with and through a process of due diligence we decided that Monolith made the most sense to acquire.