THQ has announced that it has prevailed in its dispute with Jakks Pacific regarding royalty rates THQ would have to pay for its WWE video games. Originally the royalty rate effective as of July 1, 2006 was to have been determined through an agreement or by arbitration, but Jakks delayed the process a few times and then filed an action in California Superior Court to compel arbitration and to appoint an arbitrator.

Then, when a trial judge appointed an arbitrator, Jakks actually petitioned the California Court of Appeals to "disqualify all but one of the potential arbitrators considered by the judge, based on its interpretation of when potential arbitrators were required to complete disclosure questionnaires." Ultimately the court denied Jakks' petition and arbitration can now proceed.

"Contrary to Jakks Pacific's statements that the arbitration process has been slowed for 'a host of reasons,' the sole cause of delay has been Jakks," said James M. Kennedy, THQ's executive vice president, business and legal affairs. "We believed Jakks's position in its petition from the judge's appointment of an arbitrator was wrong, and the Court of Appeals has now agreed. As we have stated since we filed suit to compel arbitration and appoint an arbitrator, we look forward to moving the arbitration process forward expeditiously, and we expect to prevail once an arbitrator has the opportunity to consider the facts in this matter."

"The WWE is a tremendous brand and we have consistently grown this franchise in the video game space on a global basis, with life-to-date sales of more than $1 billion," added Brian Farrell, THQ president and CEO. "We are excited about the continuing potential of this brand."

THQ also clarified that comments made by Jakks on a recent conference call "regarding the economics of the video game joint venture and expectations for future WWE video game sales, do not reflect the views of THQ or the THQ/Jakks Pacific joint venture."