Updated from 11:39 a.m. EDT THQ (THQI) will retain its rights to make and market video games based on Viacom's (VIA) - Get Report Nickelodeon properties, the companies announced on Monday.

Nickelodeon extended THQ's license, which was set to expire next year, to 2010. The companies did not give further terms of the agreement.

Viacom's decision to stick with THQ follows intense

speculation and scrutiny of its deliberations over the last several months. Sumner Redstone, who is Viacom's chairman and biggest shareholder, is also the largest shareholder in THQ rival

Midway

(MWY)

. Because of Redstone's

interest, analysts questioned whether THQ would be able to retain the license and what price it would have to pay to do so.

Viacom subsequently issued a press release Monday, saying it is continuing to discuss the development of other company properties with Midway.

THQ likely could ill-afford to lose the Nickelodeon license, because it is one of the most important in its portfolio. In THQ's most recent fiscal year, for instance, some 16% of the company's revenue came from Nickelodeon titles.

Meanwhile, another of the company's top licenses is in doubt. Last week,

World Wrestling Entertainment

(WWE) - Get Report

sued THQ and THQ partner

Jakks Pacific

(JAKK) - Get Report

, demanding that their license to produce WWE-themed video games be nullified.

In recent trading, THQ's shares were up 46 cents, or 2.7%, to $17.40. Meanwhile, shares of Viacom were off 4 cents, or 0.1%, to $33.80.