This excerpt taken from the ATVI 10-Q filed Aug 8, 2008.
Cost of Sales Product Costs (amounts in thousands)
Cost of sales product costs represented 48% and 44% of consolidated net revenues for the three months ended June 30, 2008 and 2007, respectively. In absolute dollars, cost of sales product costs increased $94.7 million from $217.2 million for the three months ended June 30, 2007 to $311.9 million for the three months ended June 30, 2008. The increase in absolute dollars is due to an increase in consolidated net revenues of 32% from $495.5 million for the quarter ended June 30, 2007 to $654.2 million for the three months ended June 30, 2008. An additional factor that affected cost of sales product costs as a percentage of consolidated net revenues was the release of an affiliated LucasArts title Lego: Indiana Jones the Original Adventure, which in general carries higher product costs than non-affiliated titles.