CAPITALIZED PRODUCTION COSTS

3 Months Ended

Mar. 31, 2013

Notes to Financial Statements

NOTE 4 - CAPITALIZED PRODUCTION COSTS

Capitalized Production Costs, Net consists of the following at:

	March 31, 2013			December 31, 2012
Capitalized Production Costs		2,081,266			2,042,257
Accumulated Production Costs Amortization		(1,237,883	)		(1,141,649	)
Impairment of Production Costs		-			(68,628	)
Total Capitalized Production Costs, Net	$	843,383 795,536		$	831,980
Current		189,192			332,508
Long Term		654,191			499,472

We recognized amortization expense of $96,234 and $88,708 for the periods ended March 31, 2013 and 2012, respectively.

The Company evaluates the future recoverability of capitalized software development costs and intellectual property licenses on an annual basis. For products that have been released in prior years, the primary evaluation criterion is actual title performance. For products that are scheduled to be released in future years, recoverability is evaluated based on the expected performance of the specific products to which the costs relate or in which the licensed trademark or copyright is to be used. Criteria used to evaluate expected product performance include: historical performance of comparable products developed with comparable technology; orders for the product prior to its release; and, for any sequel product, estimated performance based on the performance of the product on which the sequel is based.