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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2023
OR
☐ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number 1-15839
ACTIVISION BLIZZARD, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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95-4803544 |
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(State or other jurisdiction of incorporation or
organization) |
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(I.R.S. Employer Identification No.) |
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2701 Olympic Boulevard Building B |
Santa Monica, |
CA |
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90404 |
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(Address of principal executive offices) |
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(Zip Code) |
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(310) 255-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Common Stock, par value $0.000001 per share |
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ATVI |
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The Nasdaq Global Select Market |
Indicate
by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer”, “accelerated filer”,
“smaller reporting company”, and “emerging growth company” in Rule
12b-2 of the Exchange Act.
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Large Accelerated Filer |
☒ |
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Non-accelerated Filer |
☐ |
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Accelerated Filer |
☐ |
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Smaller reporting company |
☐
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Emerging growth company |
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If
an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
The number of shares of the registrant’s Common Stock outstanding
at April 28, 2023 was 786,158,727.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
Table of Contents
CAUTIONARY STATEMENT
This Quarterly Report on Form 10-Q contains, or incorporates by
reference, statements reflecting our views about our future
performance that constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such statements consist of any statement other than a recitation of
historical facts and include, but are not limited to:
(1) projections of revenues, expenses, income or loss,
earnings or loss per share, cash flow, or other financial items;
(2) statements of our plans and objectives, including those
related to releases of products or services and restructuring
activities; (3) statements of future financial or operating
performance, including the impact of tax items thereon;
(4) statements regarding the proposed transaction between
Activision Blizzard, Inc. (“Activision Blizzard”) and Microsoft
Corporation (“Microsoft”) pursuant to the Agreement and Plan of
Merger, dated as of January 18, 2022, by and among Activision
Blizzard, Microsoft, and Anchorage Merger Sub Inc., a wholly owned
subsidiary of Microsoft (the “Merger Agreement” and such
transaction, “the proposed transaction with Microsoft”), including
any statements regarding the expected timetable for completing the
proposed transaction with Microsoft, the ability to complete the
proposed transaction with Microsoft, and the expected benefits of
the proposed transaction with Microsoft; and (5) statements of
assumptions underlying such statements. Activision Blizzard
generally uses words such as “outlook,” “forecast,” “will,”
“could,” “should,” “would,” “to be,” “plan,” “aims,” “believes,”
“may,” “might,” “expects,” “intends,” “seeks,” “anticipates,”
“estimate,” “future,” “positioned,” “potential,” “project,”
“remain,” “scheduled,” “set to,” “subject to,” “upcoming,” and the
negative version of these words and other similar words and
expressions to help identify forward-looking statements.
Forward-looking statements are subject to business and economic
risks, reflect management’s current expectations, estimates, and
projections about our business, and are inherently uncertain and
difficult to predict.
We caution that a number of important factors, many of which are
beyond our control, could cause our actual future results and other
future circumstances to differ materially from those expressed in
any forward-looking statements. Such factors include, but are not
limited to: the risk that the proposed transaction with Microsoft
may not be completed in a timely manner or at all, which may
adversely affect our business and the price of our common stock;
the failure to satisfy the conditions to the consummation of the
proposed transaction with Microsoft, including the receipt of
certain governmental and regulatory approvals (which may or may not
be received on a timely basis or at all); the occurrence of any
event, change, or other circumstance that could give rise to the
termination of the Merger Agreement; the effect of the announcement
or pendency of the proposed transaction with Microsoft on our
business relationships, operating results, and business generally;
risks that the proposed transaction with Microsoft disrupts our
current plans and operations and potential difficulties in employee
retention and recruitment as a result of the proposed transaction
with Microsoft; risks related to diverting management’s attention
from ongoing business operations; the outcome of any legal
proceedings that have been or may be instituted against us related
to the Merger Agreement or the transactions contemplated thereby;
restrictions during the pendency of the proposed transaction with
Microsoft that may impact our ability to pursue certain business
opportunities or strategic transactions; uncertainty about current
and future economic conditions and other adverse changes in general
political conditions in any of the major countries in which we do
business; decline in demand for our products and services if
general economic conditions decline; fluctuations in currency
exchange rates; our ability to deliver popular, high-quality
content in a timely manner; negative impacts on our business
resulting from concerns regarding our workplace, including
associated legal proceedings; our ability to attract, retain, and
motivate skilled personnel; future impacts from COVID-19; the level
of demand for our games and products; our ability to meet customer
expectations with respect to our brands, games, services, and/or
business practices; competition; our reliance on a relatively small
number of franchises for a significant portion of our revenues and
profits; negative impacts from the results of collective
bargaining, legal proceedings related to unionization, or campaigns
by unions directed at our workforce; our ability to adapt to rapid
technological change and allocate our resources accordingly; the
increasing importance of digital sales and the risks of that
business model; our ability to effectively manage the scope and
complexity of our business, including risks related to our
professional esports business model; our reliance on third-party
platforms, which are also our competitors, for the distribution of
products; our dependence on the success and availability of video
game consoles manufactured by third parties and our ability to
develop commercially successful products for these consoles; the
increasing importance of free-to-play games and the risks of that
business model; the risks and uncertainties of conducting business
outside the United States (the “U.S.”)., including the need for
regulatory approval to operate, the relatively weaker protection
for our intellectual property rights, and the impact of cultural
differences on consumer preferences; insolvency or business failure
of any of our business partners; the importance of retail sales to
our business and the risks of that business model; any difficulties
in integrating acquired businesses or realizing the anticipated
benefits of strategic transactions; seasonality in the sale of our
products; fluctuation in our recurring business; the risk of
distributors, retailers, development, and licensing partners or
other third parties being unable to honor their commitments or
otherwise putting our brand at risk; our reliance on tools and
technologies owned by third parties; our use of open source
software; risks associated with undisclosed content or features in
our games; the impact of objectionable consumer- or other
third-party-created content on our operating results or reputation;
outages, disruptions, or degradations in our services, products,
and/or technological infrastructure; cybersecurity-related attacks,
significant data breaches, fraudulent activity, or disruption of
our information technology systems or networks; significant
disruption during our live events; catastrophic events; climate
change; provisions in our corporate documents and Delaware state
law that could delay or prevent a change of control; other legal
proceedings; increasing regulation in key territories over our
business, products, and distribution; changes in government
regulation relating to the Internet; our compliance with evolving
data privacy laws and regulations; scrutiny regarding the
appropriateness of the content in our games and our ability to
receive target ratings for certain titles; changes in tax rates
and/or tax laws and exposure to additional tax liabilities; changes
in financial accounting standards or the application of existing or
future standards as our business evolves; and the other factors
included
in
Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K
for the year ended December 31, 2022,
filed with the U.S. Securities and Exchange Commission (the
“SEC”).
The forward-looking statements contained herein are based on
information available to Activision Blizzard as of the date of this
filing, and we assume no obligation to update any such
forward-looking statements.
Actual events or results may differ from those expressed in
forward-looking statements. As such, you should not rely on
forward-looking statements as predictions of future events. We have
based the forward-looking statements contained in this Quarterly
Report on Form 10-Q primarily on our current expectations and
projections about future events and trends that we believe may
affect our business, financial condition, operating results,
prospects, strategy, and financial needs. These statements are not
guarantees of our future performance and are subject to risks,
uncertainties, and
other factors, some of which are beyond our control and may cause
actual results to differ materially from current
expectations.
Activision Blizzard, Inc.’s names, abbreviations thereof, logos,
and product and service designators are all either the registered
or unregistered trademarks or trade names of Activision Blizzard,
Inc. All other product or service names are the property of their
respective owners. All dollar amounts referred to in, or
contemplated by, this Quarterly Report on Form 10-Q refer to U.S.
dollars unless otherwise explicitly stated to the
contrary.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in millions, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2023 |
|
At December 31, 2022 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
9,236 |
|
|
$ |
7,060 |
|
|
Held-to-maturity investments |
3,280 |
|
|
4,932 |
|
|
Accounts receivable, net |
764 |
|
|
1,204 |
|
|
|
|
|
|
Software development |
715 |
|
|
640 |
|
|
Other current assets |
524 |
|
|
633 |
|
|
Total current assets |
14,519 |
|
|
14,469 |
|
|
|
|
|
|
Software development |
622 |
|
|
641 |
|
|
Property and equipment, net |
199 |
|
|
193 |
|
|
Deferred income taxes, net |
1,180 |
|
|
1,201 |
|
|
Other assets |
507 |
|
|
508 |
|
|
Intangible assets, net |
437 |
|
|
442 |
|
|
Goodwill |
9,929 |
|
|
9,929 |
|
|
Total assets |
$ |
27,393 |
|
|
$ |
27,383 |
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
177 |
|
|
$ |
324 |
|
|
Deferred revenues |
1,653 |
|
|
2,088 |
|
|
Accrued expenses and other liabilities |
987 |
|
|
1,143 |
|
|
|
|
|
|
Total current liabilities |
2,817 |
|
|
3,555 |
|
|
Long-term debt, net |
3,611 |
|
|
3,611 |
|
|
Deferred income taxes, net |
32 |
|
|
158 |
|
|
Other liabilities |
818 |
|
|
816 |
|
|
Total liabilities |
7,278 |
|
|
8,140 |
|
Commitments and contingencies (Note 13)
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
Common stock, $0.000001 par value, 2,400,000,000 shares authorized,
1,214,763,143 and 1,212,894,055 shares issued at March 31,
2023 and December 31, 2022, respectively
|
— |
|
|
— |
|
|
Additional paid-in capital |
12,396 |
|
|
12,260 |
|
|
Less: Treasury stock, at cost, 428,676,471 shares at March 31,
2023 and December 31, 2022
|
(5,563) |
|
|
(5,563) |
|
|
Retained earnings |
13,911 |
|
|
13,171 |
|
|
Accumulated other comprehensive loss |
(629) |
|
|
(625) |
|
|
Total shareholders’ equity |
20,115 |
|
|
19,243 |
|
|
Total liabilities and shareholders’ equity |
$ |
27,393 |
|
|
$ |
27,383 |
|
The accompanying notes are an integral part of these Condensed
Consolidated Financial Statements.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
Net revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
|
|
|
|
$ |
695 |
|
|
$ |
386 |
|
|
|
|
|
|
|
In-game, subscription, and other revenues |
|
|
|
|
|
1,688 |
|
|
1,382 |
|
|
|
|
|
|
|
Total net revenues |
|
|
|
|
|
2,383 |
|
|
1,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues—product sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product costs |
|
|
|
|
|
136 |
|
|
91 |
|
|
|
|
|
|
|
Software royalties and amortization |
|
|
|
|
|
101 |
|
|
81 |
|
|
|
|
|
|
|
Cost of revenues—in-game, subscription, and other: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Game operations and distribution costs |
|
|
|
|
|
363 |
|
|
288 |
|
|
|
|
|
|
|
Software royalties and amortization |
|
|
|
|
|
65 |
|
|
19 |
|
|
|
|
|
|
|
Product development |
|
|
|
|
|
402 |
|
|
346 |
|
|
|
|
|
|
|
Sales and marketing |
|
|
|
|
|
278 |
|
|
252 |
|
|
|
|
|
|
|
General and administrative |
|
|
|
|
|
238 |
|
|
212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
|
|
|
|
1,583 |
|
|
1,289 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
|
|
800 |
|
|
479 |
|
|
|
|
|
|
|
Interest expense from debt |
|
|
|
|
|
27 |
|
|
27 |
|
|
|
|
|
|
Other (income) expense, net (Note
10)
|
|
|
|
|
|
(122) |
|
|
(13) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax expense |
|
|
|
|
|
895 |
|
|
465 |
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
155 |
|
|
70 |
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
$ |
740 |
|
|
$ |
395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
$ |
0.94 |
|
|
$ |
0.51 |
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
$ |
0.93 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
785 |
|
|
780 |
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
792 |
|
|
786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these Condensed
Consolidated Financial Statements.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
(Unaudited)
(Amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
Net income |
|
|
|
|
|
$ |
740 |
|
|
$ |
395 |
|
|
|
|
|
|
|
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments, net of tax |
|
|
|
|
|
7 |
|
|
(4) |
|
|
|
|
|
|
|
Unrealized gains (losses) on forward contracts designated as
hedges, net of tax
|
|
|
|
|
|
(11) |
|
|
(5) |
|
|
|
|
|
|
|
Unrealized gains (losses) on available-for-sale securities, net of
tax |
|
|
|
|
|
— |
|
|
1 |
|
|
|
|
|
|
|
Total other comprehensive (loss) income |
|
|
|
|
|
$ |
(4) |
|
|
$ |
(8) |
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
$ |
736 |
|
|
$ |
387 |
|
|
|
|
|
|
The accompanying notes are an integral part of these Condensed
Consolidated Financial Statements.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
740 |
|
|
$ |
395 |
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
Deferred income taxes |
|
(100) |
|
|
(64) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash operating lease cost |
|
21 |
|
|
18 |
|
|
|
|
|
|
|
Depreciation and amortization |
|
21 |
|
|
24 |
|
|
|
|
|
|
|
Amortization of capitalized software development costs
(1) |
|
102 |
|
|
75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense (2) |
|
124 |
|
|
98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
(35) |
|
|
(22) |
|
|
|
|
|
|
|
Changes in operating assets and liabilities, net of effect of
business acquisitions: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
443 |
|
|
440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software development |
|
(161) |
|
|
(104) |
|
|
|
|
|
|
|
Other assets |
|
86 |
|
|
125 |
|
|
|
|
|
|
|
Deferred revenues |
|
(447) |
|
|
(278) |
|
|
|
|
|
|
|
Accounts payable |
|
(150) |
|
|
(76) |
|
|
|
|
|
|
|
Accrued expenses and other liabilities |
|
(67) |
|
|
11 |
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
577 |
|
|
642 |
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
Proceeds from maturities of available-for-sale
investments |
|
— |
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from maturities of held-to-maturity
investments |
|
1,700 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
(37) |
|
|
(15) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by investing activities |
|
1,663 |
|
|
7 |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock to employees |
|
13 |
|
|
16 |
|
|
|
|
|
|
|
Tax payment related to net share settlements on restricted stock
units |
|
(84) |
|
|
(113) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
(71) |
|
|
(97) |
|
|
|
|
|
|
|
Effect of foreign exchange rate changes on cash and cash
equivalents |
|
8 |
|
|
(10) |
|
|
|
|
|
|
|
Net increase in cash and cash equivalents and restricted
cash |
|
2,177 |
|
|
542 |
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash at beginning of
period |
|
7,086 |
|
|
10,438 |
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash at end of
period |
|
$ |
9,263 |
|
|
$ |
10,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information - Non-cash financing
activities: |
|
|
|
|
|
|
|
|
|
|
Dividends payable |
|
$ |
— |
|
|
$ |
367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Excludes
deferral and amortization of share-based compensation expense,
including liability awards accounted for under Accounting Standards
Codification (“ASC”) 718.
(2)Includes
the net effects of capitalization, deferral, and amortization of
share-based compensation expense, including liability awards
accounted for under ASC 718.
The accompanying notes are an integral part of these Condensed
Consolidated Financial Statements.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’
EQUITY
For the Three Months Ended March 31, 2023 and March 31,
2022
(Unaudited)
(Amounts and shares in millions, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
Treasury Stock |
|
Additional
Paid-In
Capital |
|
Retained
Earnings |
|
Accumulated
Other
Comprehensive
Income (Loss) |
|
Total
Shareholders’
Equity |
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
|
|
|
|
Balance at December 31, 2022 |
1,213 |
|
|
$ |
— |
|
|
(429) |
|
|
$ |
(5,563) |
|
|
$ |
12,260 |
|
|
$ |
13,171 |
|
|
$ |
(625) |
|
|
$ |
19,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
740 |
|
|
— |
|
|
740 |
|
|
Other comprehensive income (loss) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4) |
|
|
(4) |
|
|
Issuance of common stock pursuant to employee stock
options |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
14 |
|
|
— |
|
|
— |
|
|
14 |
|
|
Issuance of common stock pursuant to restricted stock
units |
3 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Restricted stock surrendered for employees’ tax
liability |
(1) |
|
|
— |
|
|
— |
|
|
— |
|
|
(92) |
|
|
— |
|
|
— |
|
|
(92) |
|
Settlement of liability-classified awards in restricted stock units
(Note
9)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
93 |
|
|
— |
|
|
— |
|
|
93 |
|
|
Share-based compensation expense related to employee stock options
and restricted stock units |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
121 |
|
|
— |
|
|
— |
|
|
121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2023 |
1,215 |
|
|
$ |
— |
|
|
(429) |
|
|
$ |
(5,563) |
|
|
$ |
12,396 |
|
|
$ |
13,911 |
|
|
$ |
(629) |
|
|
$ |
20,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
Treasury Stock |
|
Additional
Paid-In
Capital |
|
Retained
Earnings |
|
Accumulated
Other
Comprehensive
Income (Loss) |
|
Total
Shareholders’
Equity |
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
|
|
|
|
Balance at December 31, 2021 |
1,208 |
|
|
$ |
— |
|
|
(429) |
|
|
$ |
(5,563) |
|
|
$ |
11,715 |
|
|
$ |
12,025 |
|
|
$ |
(578) |
|
|
$ |
17,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
395 |
|
|
— |
|
|
395 |
|
|
Other comprehensive income (loss) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(8) |
|
|
(8) |
|
|
Issuance of common stock pursuant to employee stock
options |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
15 |
|
|
— |
|
|
— |
|
|
15 |
|
|
Issuance of common stock pursuant to restricted stock
units |
4 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Restricted stock surrendered for employees’ tax
liability |
(2) |
|
|
— |
|
|
— |
|
|
— |
|
|
(131) |
|
|
— |
|
|
— |
|
|
(131) |
|
Settlement of liability-classified awards in restricted stock units
(Note
9)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
204 |
|
|
— |
|
|
— |
|
|
204 |
|
|
Share-based compensation expense related to employee stock options
and restricted stock units |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
124 |
|
|
— |
|
|
— |
|
|
124 |
|
|
Dividends ($0.47 per common share)
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(367) |
|
|
— |
|
|
(367) |
|
|
Balance at March 31, 2022 |
1,210 |
|
|
$ |
— |
|
|
(429) |
|
|
$ |
(5,563) |
|
|
$ |
11,927 |
|
|
$ |
12,053 |
|
|
$ |
(586) |
|
|
$ |
17,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these Condensed
Consolidated Financial Statements.
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Description of Business and Basis of Consolidation and
Presentation
Activision Blizzard, Inc. is a leading global developer and
publisher of interactive entertainment content and services. We
develop and distribute content and services on video game consoles,
personal computers (“PCs”), and mobile devices. We also operate
esports leagues and offer digital advertising within some of our
content. The terms “Activision Blizzard,” the “Company,” “we,”
“us,” and “our” are used to refer collectively to Activision
Blizzard, Inc. and its subsidiaries.
Merger Agreement
On January 18, 2022, we entered into an Agreement and Plan of
Merger (the “Merger Agreement”) with Microsoft Corporation
(“Microsoft”) and Anchorage Merger Sub Inc. (“Merger Sub”), a
wholly owned subsidiary of Microsoft. Subject to the terms and
conditions of the Merger Agreement, Microsoft agreed to acquire the
Company for $95.00 per issued and outstanding share of our common
stock, par value $0.000001 per share, in an all-cash transaction.
Pursuant to the terms of the Merger Agreement, our acquisition will
be accomplished through the merger of Merger Sub with and into the
Company (the “Merger”), with the Company surviving the Merger as a
wholly owned subsidiary of Microsoft. As a result of the Merger, we
will cease to be a publicly traded company. We have agreed to
various customary covenants and agreements, including, among
others, agreements to conduct our business in the ordinary course
during the period between the execution of the Merger Agreement and
the effective time of the Merger. We do not believe these
restrictions will prevent us from meeting our debt service
obligations, ongoing costs of operations, working capital needs or
capital expenditure requirements.
If the Merger Agreement is terminated under certain specified
circumstances, we or Microsoft will be required to pay a
termination fee. We will be required to pay Microsoft a termination
fee of approximately $2.27 billion under specified
circumstances, including termination of the Merger Agreement due to
our material breach of representations, warranties, covenants or
agreements in the Merger Agreement. Microsoft will be required to
pay us a reverse termination fee under specified circumstances,
including termination of the Merger Agreement due to a permanent
injunction arising from Antitrust Laws (as defined in the Merger
Agreement) when we are not then in material breach of any provision
of the Merger Agreement and if certain other conditions are met, in
an amount equal to $3.0 billion if the termination notice is
provided at any time after April 18, 2023.
On December 8, 2022, the United States Federal Trade Commission
(the “FTC”) issued an administrative complaint against the Company
and Microsoft alleging that the Company and Microsoft executed the
Merger Agreement in violation of Section 5 of the FTC Act, as
amended, 15 U.S.C. § 45, which, if consummated, would violate
Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18 and
Section 5 of the FTC Act, as amended, 15 U.S.C. § 45. For more
information regarding the FTC complaint regarding the pending
Merger, see
Note
13
of the condensed consolidated consolidated financial
statements.
On April 26, 2023, the United Kingdom Competition and Markets
Authority ("CMA") announced a decision to block the Merger, stating
that competition concerns arose in relation to cloud gaming and
that Microsoft’s remedies addressing any concerns in cloud gaming
were not sufficient. Microsoft has announced its decision to appeal
the CMA’s ruling, and Activision Blizzard intends to fully support
Microsoft’s efforts on this appeal. The parties continue to fully
engage with other regulators reviewing the transaction to obtain
required regulatory approvals.
Our Segments
Based upon our organizational structure, we conduct our business
through three reportable segments, each of which is a leading
global developer and publisher of interactive entertainment content
and services based primarily on our internally-developed
intellectual properties.
(i) Activision Publishing, Inc.
Activision Publishing, Inc. (“Activision”) delivers content through
both premium and free-to-play offerings and primarily generates
revenue from full-game and in-game sales, as well as by licensing
software to third-party or related-party companies that distribute
Activision products. Activision’s key product offerings include
titles and content for Call of Duty®,
a first-person action franchise. Activision also includes the
activities of the Call of Duty League™, a global professional
esports league.
(ii) Blizzard Entertainment, Inc.
Blizzard Entertainment, Inc. (“Blizzard”) delivers content through
both premium and free-to-play offerings and primarily generates
revenue from full-game and in-game sales, subscriptions, and by
licensing software to third-party or related-party companies that
distribute Blizzard products. Blizzard also maintains a proprietary
online gaming platform, Battle.net®,
which facilitates digital distribution of Blizzard content and
selected Activision content, online social connectivity, and the
creation of user-generated content. Blizzard’s key product
offerings include titles and content for: the
Warcraft®
franchise, which includes World of Warcraft®,
a subscription-based massive multi-player online role-playing game,
and Hearthstone®,
an online collectible card game based in the Warcraft
universe; Diablo®
in the action role-playing genre; and Overwatch®
in the team-based first-person action genre. Blizzard also includes
the activities of the Overwatch League™, a global professional
esports league.
(iii) King Digital Entertainment
King Digital Entertainment (“King”) delivers content through
free-to-play offerings and primarily generates revenue from in-game
sales and in-game advertising on mobile platforms. King’s key
product offerings include titles and content for Candy Crush™, a
“match three” franchise.
Other
We also engage in other businesses that do not represent reportable
segments, including our Activision Blizzard Distribution
(“Distribution”) business, which consists of operations in Europe
that provide warehousing, logistics, and sales distribution
services to third-party publishers of interactive entertainment
software, our own publishing operations, and manufacturers of
interactive entertainment hardware.
Basis of Consolidation and Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the rules and
regulations of the SEC and accounting principles generally accepted
in the United States of America (“U.S. GAAP”) for interim
reporting. Accordingly, certain notes or other information that are
normally required by U.S. GAAP have been condensed or omitted if
they substantially duplicate the disclosures contained in our
annual audited consolidated financial statements. Additionally, the
year-end condensed consolidated balance sheet data was derived from
audited financial statements but does not include all disclosures
required by U.S. GAAP. Accordingly, the unaudited condensed
consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and notes
thereto included in our Annual Report on Form 10-K for the
year ended December 31, 2022.
The preparation of the condensed consolidated financial statements
in conformity with U.S. GAAP requires management to make estimates
and assumptions that affect the amounts reported in the condensed
consolidated financial statements and accompanying notes. In the
opinion of management, all adjustments considered necessary for the
fair statement of our financial position and results of operations
in accordance with U.S. GAAP (consisting of normal recurring
adjustments) have been included in the accompanying unaudited
condensed consolidated financial statements. Actual results could
differ from these estimates and assumptions.
The accompanying condensed consolidated financial statements
include the accounts and operations of the Company. All
intercompany accounts and transactions have been eliminated.
Certain amounts in the prior year condensed consolidated financial
statements have been reclassified to conform to the current year
presentation.
2. Held-to-Maturity Investments
The following tables summarizes the Company's held-to-maturity
investments (amount in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2023 |
|
|
Amortized Cost |
|
Gross Unrealized Gains |
|
Gross Unrealized losses |
|
Estimated Fair Value
(Level 1) |
|
U.S. treasuries and government agency securities |
$ |
3,280 |
|
|
$ |
— |
|
|
$ |
(1) |
|
|
$ |
3,279 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2022 |
|
|
Amortized Cost |
|
Gross Unrealized Gains |
|
Gross Unrealized losses |
|
Estimated Fair Value
(Level 1) |
|
U.S. treasuries and government agency securities |
$ |
4,932 |
|
|
$ |
1 |
|
|
$ |
(3) |
|
|
$ |
4,930 |
|
|
|
|
|
|
|
|
|
At March 31, 2023 and December 31, 2022, all contractual
maturities of held-to-maturity investments were less than 12
months.
3. Software Development
Our total capitalized software development costs were $1.3 billion
as of March 31, 2023 and December 31, 2022, respectively,
and primarily relate to internal development costs.
Amortization of capitalized software development costs was as
follows (amounts in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, |
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
Amortization of capitalized software development costs |
|
|
|
|
|
$ |
125 |
|
|
$ |
79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Fair Value Measurements
The Financial Accounting Standards Board literature regarding fair
value measurements for certain assets and liabilities establishes a
three-level fair value hierarchy that prioritizes the inputs used
to measure fair value. This hierarchy requires entities to maximize
the use of “observable inputs” and minimize the use of
“unobservable inputs.” The three levels of inputs used to measure
fair value are as follows:
•Level 1—Quoted
prices in active markets for identical assets or
liabilities;
•Level 2—Observable
inputs other than quoted prices included in Level 1, such as
quoted prices for similar assets or liabilities in active markets
or other inputs that are observable or can be corroborated by
observable market data; and
•Level 3—Unobservable
inputs that are supported by little or no market activity and that
are significant to the fair value of the assets or liabilities,
including certain pricing models, discounted cash flow
methodologies, and similar techniques that use significant
unobservable inputs.
Fair Value Measurements on a Recurring Basis
The table below segregates all of our financial assets and
liabilities that are measured at fair value on a recurring basis
into the most appropriate level within the fair value hierarchy
based on the inputs used to determine the fair value at the
measurement date (amounts in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at March 31, 2023 Using |
|
|
|
|
As of March 31, 2023 |
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Balance Sheet
Classification |
|
Financial Assets: |
|
|
|
|
|
|
|
|
|
|
Recurring fair value measurements: |
|
|
|
|
|
|
|
|
|
|
Money market funds |
$ |
8,888 |
|
|
$ |
8,888 |
|
|
$ |
— |
|
|
$ |
— |
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities |
47 |
|
|
47 |
|
|
— |
|
|
— |
|
|
Other current assets |
|
Foreign currency forward contracts designated as hedges |
3 |
|
|
— |
|
|
3 |
|
|
— |
|
|
Other current assets |
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
8,938 |
|
|
$ |
8,935 |
|
|
$ |
3 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency forward contracts designated as
hedges |
$ |
(8) |
|
|
$ |
— |
|
|
$ |
(8) |
|
|
$ |
— |
|
|
Accrued expenses and other liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2022 Using |
|
|
|
|
As of December 31, 2022 |
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Balance Sheet
Classification |
|
Financial Assets: |
|
|
|
|
|
|
|
|
|
|
Recurring fair value measurements: |
|
|
|
|
|
|
|
|
|
|
Money market funds |
$ |
6,639 |
|
|
$ |
6,639 |
|
|
$ |
— |
|
|
$ |
— |
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities |
49 |
|
|
49 |
|
|
— |
|
|
— |
|
|
Other current assets |
|
Foreign currency forward contracts designated as hedges |
6 |
|
|
— |
|
|
6 |
|
|
— |
|
|
Other current assets |
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
6,694 |
|
|
$ |
6,688 |
|
|
$ |
6 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
Foreign currency forward contracts designated as
hedges |
$ |
(6) |
|
|
$ |
— |
|
|
$ |
(6) |
|
|
$ |
— |
|
|
Accrued expenses and other liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Forward Contracts
Foreign Currency Forward Contracts Designated as Hedges (“Cash Flow
Hedges”)
The total gross notional amounts and fair values of our Cash Flow
Hedges, which generally had remaining maturities of nine months or
less as of March 31, 2023, are as follows (amounts in
millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2023 |
|
As of December 31, 2022 |
|
Notional amount |
Fair value gain (loss) |
|
Notional amount |
Fair value gain (loss) |
|
Foreign Currency: |
|
|
|
|
|
|
Buy USD, Sell EUR |
$ |
475 |
|
$ |
(5) |
|
|
$ |
509 |
|
$ |
— |
|
For the three months ended March 31, 2023 and 2022, pre-tax
net realized gains (losses) associated with our Cash Flow Hedges
that were reclassified out of “Accumulated other comprehensive
income (loss)” and into earnings were not material.
5. Deferred Revenues
We record deferred revenues when cash payments are received or due
in advance of the fulfillment of our associated performance
obligations. The aggregate of the current and non-current balances
of deferred revenues as of March 31, 2023 and
December 31, 2022, were $1.7 billion and $2.1 billion,
respectively. For the three months ended March 31, 2023, the
additions to our deferred revenues balance were primarily due to
cash payments received or due in advance of satisfying our
performance obligations, while the reductions to our deferred
revenues balance were primarily due to the recognition of revenues
upon fulfillment of our performance obligations, which were in the
ordinary course of business. During the three months ended
March 31, 2023 and March 31, 2022, $1.3 billion and
$0.7 billion, respectively, of revenues were recognized that
were included in the deferred revenues balance at the beginning of
the period.
As of March 31, 2023, the aggregate amount of contracted
revenues allocated to our unsatisfied performance obligations was
$1.8 billion, which included our deferred revenues balances and
amounts to be invoiced and recognized as revenue in future periods.
We expect to recognize approximately $1.8 billion over the next 12
months. This balance did not include an estimate for variable
consideration arising from sales-based royalty license revenue in
excess of the contractual minimum guarantee or any estimated
amounts of variable consideration that are subject to constraint in
accordance with the revenue accounting standard.
6. Debt
Credit Facilities
As of March 31, 2023 and December 31, 2022, we had $1.5
billion available under a revolving credit facility (the
“Revolver”) pursuant to a credit agreement entered into on October
11, 2013 (as amended thereafter and from time to time, the “Credit
Agreement”). To date, we have not drawn on the Revolver and we were
in compliance with the terms of the Credit Agreement as of
March 31, 2023. The Revolver is scheduled to mature on August
24, 2023.
Unsecured Senior Notes
As of March 31, 2023 and December 31, 2022, we had
$3.7 billion of gross unsecured senior notes outstanding. A
summary of our outstanding unsecured senior notes is as follows
(amounts in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2023 |
|
At December 31, 2022 |
|
Unsecured Senior Notes |
|
Interest Rate |
|
Semi-Annual Interest Payments Due On |
|
Maturity |
|
Principal |
|
Fair Value
(Level 2) |
|
Principal |
|
Fair Value
(Level 2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2026 Notes |
|
3.40% |
|
Mar. 15 & Sept. 15 |
|
Sept. 2026 |
|
$ |
850 |
|
|
$ |
823 |
|
|
$ |
850 |
|
|
$ |
810 |
|
|
2027 Notes |
|
3.40% |
|
Jun. 15 & Dec. 15 |
|
Jun. 2027 |
|
400 |
|
|
384 |
|
|
400 |
|
|
378 |
|
|
2030 Notes |
|
1.35% |
|
Mar. 15 & Sept. 15 |
|
Sept. 2030 |
|
500 |
|
|
406 |
|
|
500 |
|
|
391 |
|
|
2047 Notes |
|
4.50% |
|
Jun. 15 & Dec. 15 |
|
Jun. 2047 |
|
400 |
|
|
378 |
|
|
400 |
|
|
353 |
|
|
2050 Notes |
|
2.50% |
|
Mar. 15 & Sept. 15 |
|
Sept. 2050 |
|
1,500 |
|
|
1,009 |
|
|
1,500 |
|
|
936 |
|
|
Total gross long-term debt |
|
$ |
3,650 |
|
|
|
|
$ |
3,650 |
|
|
|
|
Unamortized discount and deferred financing costs |
|
(39) |
|
|
|
|
(39) |
|
|
|
|
Total net carrying amount |
|
$ |
3,611 |
|
|
|
|
$ |
3,611 |
|
|
|
7. Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss)
were as follows (amounts in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2023 |
|
Foreign currency
translation
adjustments |
|
|
|
Unrealized gain (loss)
on forward
contracts |
|
Total |
|
Balance at December 31, 2022 |
$ |
(636) |
|
|
|
|
$ |
11 |
|
|
$ |
(625) |
|
|
Other comprehensive income (loss) before
reclassifications |
7 |
|
|
|
|
— |
|
|
7 |
|
|
Amounts reclassified from accumulated other comprehensive income
(loss) into earnings |
— |
|
|
|
|
(11) |
|
|
(11) |
|
|
Balance at March 31, 2023 |
$ |
(629) |
|
|
|
|
$ |
— |
|
|
$ |
(629) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2022 |
|
|
Foreign currency
translation
adjustments |
|
Unrealized gain (loss)
on available-for-
sale securities |
|
Unrealized gain (loss)
on forward
contracts |
|
Total |
|
Balance at December 31, 2021 |
$ |
(606) |
|
|
$ |
3 |
|
|
$ |
25 |
|
|
$ |
(578) |
|
|
Other comprehensive income (loss) before
reclassifications
|
(4) |
|
|
2 |
|
|
6 |
|
|
4 |
|
|
Amounts reclassified from accumulated other comprehensive income
(loss) into earnings
|
— |
|
|
(1) |
|
|
(11) |
|
|
(12) |
|
|
Balance at March 31, 2022 |
$ |
(610) |
|
|
$ |
4 |
|
|
$ |
20 |
|
|
$ |
(586) |
|
8. Operating Segments and Geographic Regions
We have three reportable segments—Activision, Blizzard, and King.
Our operating segments are consistent with the manner in which our
operations are reviewed and managed by our Chief Executive Officer,
who is our chief operating decision maker (“CODM”). The CODM
reviews segment performance exclusive of: the impact of the change
in deferred revenues and related cost of revenues with respect to
certain of our online-enabled games; share-based compensation
expense (including liability awards accounted for under ASC 718);
amortization of intangible assets as a result of purchase price
accounting; fees and other expenses (including legal fees,
expenses, and accruals) related to acquisitions, associated
integration activities, and financings; certain restructuring and
related costs; certain partnership wind down and related costs; and
certain other non-cash charges. The CODM does not review any
information regarding total assets on an operating segment basis,
and accordingly, no disclosure is made with respect
thereto.
Our operating segments are also consistent with our internal
organizational structure, the way we assess operating performance
and allocate resources, and the availability of separate financial
information. We do not aggregate operating segments.
Information on reportable segment net revenues and operating income
are presented below (amounts in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2023 |
|
|
Activision |
|
Blizzard |
|
King |
|
Total |
|
Segment Revenues |
|
|
|
|
|
|
|
|
|
Net revenues from external customers |
|
$ |
580 |
|
|
$ |
435 |
|
|
$ |
739 |
|
|
$ |
1,754 |
|
|
Intersegment net revenues (1) |
|
— |
|
|
8 |
|
|
— |
|
|
8 |
|
|
Segment net revenues |
|
$ |
580 |
|
|
$ |
443 |
|
|
$ |
739 |
|
|
$ |
1,762 |
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income |
|
$ |
179 |
|
|
$ |
56 |
|
|
$ |
241 |
|
|
$ |
476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
Activision |
|
Blizzard |
|
King |
|
Total |
|
Segment Revenues |
|
|
|
|
|
|
|
|
|
Net revenues from external customers |
|
$ |
453 |
|
|
$ |
265 |
|
|
$ |
682 |
|
|
$ |
1,400 |
|
|
Intersegment net revenues (1) |
|
— |
|
|
9 |
|
|
— |
|
|
9 |
|
|
Segment net revenues |
|
$ |
453 |
|
|
$ |
274 |
|
|
$ |
682 |
|
|
$ |
1,409 |
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income |
|
$ |
59 |
|
|
$ |
53 |
|
|
$ |
243 |
|
|
$ |
355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Intersegment
revenues reflect licensing and service fees charged between
segments.
Reconciliations of total segment net revenues and total segment
operating income to consolidated net revenues and consolidated
income before income tax expense are presented in the table below
(amounts in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
Reconciliation to consolidated net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment net revenues |
|
|
|
|
|
$ |
1,762 |
|
|
$ |
1,409 |
|
|
|
|
|
|
|
Revenues from non-reportable segments (1)
|
|
|
|
|
|
101 |
|
|
81 |
|
|
|
|
|
|
|
Net effect from recognition (deferral) of deferred net revenues
(2) |
|
|
|
|
|
528 |
|
|
287 |
|
|
|
|
|
|
|
Elimination of intersegment revenues (3)
|
|
|
|
|
|
(8) |
|
|
(9) |
|
|
|
|
|
|
|
Consolidated net revenues
|
|
|
|
|
|
$ |
2,383 |
|
|
$ |
1,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to consolidated income before income tax
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income
|
|
|
|
|
|
$ |
476 |
|
|
$ |
355 |
|
|
|
|
|
|
|
Operating income (loss) from non-reportable segments
(1) |
|
|
|
|
|
6 |
|
|
19 |
|
|
|
|
|
|
|
Net effect from recognition (deferral) of deferred net revenues and
related cost of revenues (2) |
|
|
|
|
|
471 |
|
|
235 |
|
|
|
|
|
|
|
Share-based compensation expense (4) |
|
|
|
|
|
(124) |
|
|
(98) |
|
|
|
|
|
|
|
Amortization of intangible assets (5) |
|
|
|
|
|
(4) |
|
|
(2) |
|
|
|
|
|
|
|
Restructuring and related costs (6) |
|
|
|
|
|
— |
|
|
2 |
|
|
|
|
|
|
|
Partnership wind down and related costs (7) |
|
|
|
|
|
(4) |
|
|
— |
|
|
|
|
|
|
|
Merger and acquisition-related fees and other expenses
(8) |
|
|
|
|
|
(21) |
|
|
(32) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated operating income
|
|
|
|
|
|
800 |
|
|
479 |
|
|
|
|
|
|
|
Interest expense from debt |
|
|
|
|
|
27 |
|
|
27 |
|
|
|
|
|
|
|
Other (income) expense, net |
|
|
|
|
|
(122) |
|
|
(13) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated income before income tax expense |
|
|
|
|
|
$ |
895 |
|
|
$ |
465 |
|
|
|
|
|
|
(1)Includes
other income and expenses outside of our reportable segments,
including our Distribution business and unallocated corporate
income and expenses.
(2)Reflects
the net effect from recognition (deferral) of deferred net
revenues, along with related cost of revenues, on certain of our
online-enabled products.
(3)Intersegment
revenues reflect licensing and service fees charged between
segments.
(4)Reflects
expenses related to share-based compensation.
(5)Reflects
amortization of intangible assets from purchase price
accounting.
(6)Reflects
restructuring initiatives.
(7)Reflects
expenses related to the wind down of our partnership with NetEase,
Inc. in Mainland China in regards to licenses covering the
publication of several Blizzard titles which expired in January
2023.
(8)Reflects
fees and other expenses related to our proposed transaction with
Microsoft, which primarily consist of legal and advisory
fees.
Net revenues by distribution channel, including a reconciliation to
each of our reportable segment’s revenues, were as follows (amounts
in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2023 |
|
|
Activision |
|
Blizzard |
|
King |
|
Non-reportable segments |
|
Elimination of intersegment revenues (3) |
|
Total |
|
Net revenues by distribution channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital online channels (1) |
|
$ |
902 |
|
|
$ |
525 |
|
|
$ |
738 |
|
|
$ |
— |
|
|
$ |
(8) |
|
|
$ |
2,157 |
|
|
Retail channels |
|
102 |
|
|
2 |
|
|
— |
|
|
— |
|
|
— |
|
|
104 |
|
|
Other (2) |
|
6 |
|
|
4 |
|
|
— |
|
|
112 |
|
|
— |
|
|
122 |
|
|
Total consolidated net revenues |
|
$ |
1,010 |
|
|
$ |
531 |
|
|
$ |
738 |
|
|
$ |
112 |
|
|
$ |
(8) |
|
|
$ |
2,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in deferred revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital online channels (1) |
|
$ |
(362) |
|
|
$ |
(87) |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(448) |
|
|
Retail channels |
|
(68) |
|
|
(1) |
|
|
— |
|
|
— |
|
|
— |
|
|
(69) |
|
|
Other (2) |
|
— |
|
|
— |
|
|
— |
|
|
(11) |
|
|
— |
|
|
(11) |
|
|
Total change in deferred revenues |
|
$ |
(430) |
|
|
$ |
(88) |
|
|
$ |
1 |
|
|
$ |
(11) |
|
|
$ |
— |
|
|
$ |
(528) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital online channels (1) |
|
$ |
540 |
|
|
$ |
438 |
|
|
$ |
739 |
|
|
$ |
— |
|
|
$ |
(8) |
|
|
$ |
1,709 |
|
|
Retail channels |
|
34 |
|
|
1 |
|
|
— |
|
|
— |
|
|
— |
|
|
35 |
|
|
Other (2) |
|
6 |
|
|
4 |
|
|
— |
|
|
101 |
|
|
— |
|
|
111 |
|
|
Total segment net revenues |
|
$ |
580 |
|
|
$ |
443 |
|
|
$ |
739 |
|
|
$ |
101 |
|
|
$ |
(8) |
|
|
$ |
1,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
Activision |
|
Blizzard |
|
King |
|
Non-reportable segments |
|
Elimination of intersegment revenues (3) |
|
Total |
|
Net revenues by distribution channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital online channels (1) |
|
$ |
616 |
|
|
$ |
300 |
|
|
$ |
682 |
|
|
$ |
— |
|
|
$ |
(9) |
|
|
$ |
1,589 |
|
|
Retail channels |
|
83 |
|
|
2 |
|
|
— |
|
|
— |
|
|
— |
|
|
85 |
|
|
Other (2) |
|
11 |
|
|
2 |
|
|
— |
|
|
81 |
|
|
— |
|
|
94 |
|
|
Total consolidated net revenues |
|
$ |
710 |
|
|
$ |
304 |
|
|
$ |
682 |
|
|
$ |
81 |
|
|
$ |
(9) |
|
|
$ |
1,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in deferred revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital online channels (1) |
|
$ |
(192) |
|
|
$ |
(30) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(222) |
|
|
Retail channels |
|
(65) |
|
|
1 |
|
|
— |
|
|
— |
|
|
— |
|
|
(64) |
|
|
Other (2) |
|
— |
|
|
(1) |
|
|
— |
|
|
— |
|
|
— |
|
|
(1) |
|
|
Total change in deferred revenues |
|
$ |
(257) |
|
|
$ |
(30) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(287) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital online channels (1) |
|
$ |
424 |
|
|
$ |
270 |
|
|
$ |
682 |
|
|
$ |
— |
|
|
$ |
(9) |
|
|
$ |
1,367 |
|
|
Retail channels |
|
18 |
|
|
3 |
|
|
— |
|
|
— |
|
|
— |
|
|
21 |
|
|
Other (2) |
|
11 |
|
|
1 |
|
|
— |
|
|
81 |
|
|
— |
|
|
93 |
|
|
Total segment net revenues |
|
$ |
453 |
|
|
$ |
274 |
|
|
$ |
682 |
|
|
$ |
81 |
|
|
$ |
(9) |
|
|
$ |
1,481 |
|
(1)Net
revenues from “Digital online channels” include revenues from
digitally-distributed downloadable content, microtransactions,
subscriptions, and products, as well as licensing
royalties.
(2)Net
revenues from “Other” primarily include revenues from our
Distribution business, the Overwatch League, and the Call of Duty
League.
(3)Intersegment
revenues reflect licensing and service fees charged between
segments.
Geographic information presented below is based on the location of
the paying customer. Net revenues by geographic region, including a
reconciliation to each of our reportable segment’s net revenues,
were as follows (amounts in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2023 |
|
|
Activision |
|
Blizzard |
|
King |
|
Non-reportable segments |
|
Elimination of intersegment revenues (2) |
|
Total |
|
Net revenues by geographic region: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
$ |
652 |
|
|
$ |
257 |
|
|
$ |
473 |
|
|
$ |
1 |
|
|
$ |
(5) |
|
|
$ |
1,378 |
|
|
EMEA (1) |
|
256 |
|
|
153 |
|
|
181 |
|
|
111 |
|
|
(2) |
|
|
699 |
|
|
Asia Pacific |
|
102 |
|
|
121 |
|
|
84 |
|
|
— |
|
|
(1) |
|
|
306 |
|
|
Total consolidated net revenues |
|
$ |
1,010 |
|
|
$ |
531 |
|
|
$ |
738 |
|
|
$ |
112 |
|
|
$ |
(8) |
|
|
$ |
2,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in deferred revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
$ |
(280) |
|
|
$ |
(44) |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(323) |
|
|
EMEA (1) |
|
(125) |
|
|
(28) |
|
|
— |
|
|
(11) |
|
|
— |
|
|
(164) |
|
|
Asia Pacific |
|
(25) |
|
|
(16) |
|
|
— |
|
|
— |
|
|
— |
|
|
(41) |
|
|
Total change in deferred revenues |
|
$ |
(430) |
|
|
$ |
(88) |
|
|
$ |
1 |
|
|
$ |
(11) |
|
|
$ |
— |
|
|
$ |
(528) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
$ |
372 |
|
|
$ |
213 |
|
|
$ |
474 |
|
|
$ |
1 |
|
|
$ |
(5) |
|
|
$ |
1,055 |
|
|
EMEA (1) |
|
131 |
|
|
125 |
|
|
181 |
|
|
100 |
|
|
(2) |
|
|
535 |
|
|
Asia Pacific |
|
77 |
|
|
105 |
|
|
84 |
|
|
— |
|
|
(1) |
|
|
265 |
|
|
Total segment net revenues |
|
$ |
580 |
|
|
$ |
443 |
|
|
$ |
739 |
|
|
$ |
101 |
|
|
$ |
(8) |
|
|
$ |
1,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
Activision |
|
Blizzard |
|
King |
|
Non-reportable segments |
|
Elimination of intersegment revenues (2) |
|
Total |
|
Net revenues by geographic region: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
$ |
460 |
|
|
$ |
125 |
|
|
$ |
437 |
|
|
$ |
— |
|
|
$ |
(6) |
|
|
$ |
1,016 |
|
|
EMEA (1) |
|
184 |
|
|
94 |
|
|
170 |
|
|
81 |
|
|
(2) |
|
|
527 |
|
|
Asia Pacific |
|
66 |
|
|
85 |
|
|
75 |
|
|
— |
|
|
(1) |
|
|
225 |
|
|
Total consolidated net revenues |
|
$ |
710 |
|
|
$ |
304 |
|
|
$ |
682 |
|
|
$ |
81 |
|
|
$ |
(9) |
|
|
$ |
1,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in deferred revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
$ |
(164) |
|
|
$ |
(11) |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(174) |
|
|
EMEA (1) |
|
(80) |
|
|
(13) |
|
|
— |
|
|
— |
|
|
— |
|
|
(93) |
|
|
Asia Pacific |
|
(13) |
|
|
(6) |
|
|
(1) |
|
|
— |
|
|
— |
|
|
(20) |
|
|
Total change in deferred revenues |
|
$ |
(257) |
|
|
$ |
(30) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(287) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
$ |
296 |
|
|
$ |
114 |
|
|
$ |
438 |
|
|
$ |
— |
|
|
$ |
(6) |
|
|
$ |
842 |
|
|
EMEA (1) |
|
104 |
|
|
81 |
|
|
170 |
|
|
81 |
|
|
(2) |
|
|
434 |
|
|
Asia Pacific |
|
53 |
|
|
79 |
|
|
74 |
|
|
— |
|
|
(1) |
|
|
205 |
|
|
Total segment net revenues |
|
$ |
453 |
|
|
$ |
274 |
|
|
$ |
682 |
|
|
$ |
81 |
|
|
$ |
(9) |
|
|
$ |
1,481 |
|
(1) “EMEA” consists of the Europe, Middle
East, and Africa geographic regions.
(2) Intersegment revenues reflect licensing
and service fees charged between segments.
The Company’s net revenues in the U.S. was 51% of consolidated net
revenues for both the three months ended March 31, 2023 and
2022, respectively. The Company’s net revenues in the U.K. was 10%
of consolidated net revenues for both the three months ended
March 31, 2023 and 2022, respectively. No other country’s net
revenues exceeded 10% of consolidated net revenues for the three
months ended March 31, 2023 or 2022.
Net revenues by platform, including a reconciliation to each of our
reportable segment’s net revenues, were as follows (amounts in
millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2023 |
|
|
Activision |
|
Blizzard |
|
King |
|
Non-reportable segments |
|
Elimination of intersegment revenues (3) |
|
Total |
|
Net revenues by platform: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Console |
|
$ |
597 |
|
|
$ |
42 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
639 |
|
|
PC |
|
270 |
|
|
386 |
|
|
18 |
|
|
— |
|
|
(8) |
|
|
666 |
|
|
Mobile and ancillary (1) |
|
137 |
|
|
99 |
|
|
720 |
|
|
— |
|
|
— |
|
|
956 |
|
|
Other (2) |
|
6 |
|
|
4 |
|
|
— |
|
|
112 |
|
|
— |
|
|
122 |
|
|
Total consolidated net revenues |
|
$ |
1,010 |
|
|
$ |
531 |
|
|
$ |
738 |
|
|
$ |
112 |
|
|
$ |
(8) |
|
|
$ |
2,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in deferred revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Console |
|
$ |
(278) |
|
|
$ |
(4) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(282) |
|
|
PC |
|
(151) |
|
|
(52) |
|
|
— |
|
|
— |
|
|
— |
|
|
(203) |
|
|
Mobile and ancillary (1) |
|
(1) |
|
|
(32) |
|
|
1 |
|
|
— |
|
|
— |
|
|
(32) |
|
|
Other (2) |
|
— |
|
|
— |
|
|
— |
|
|
(11) |
|
|
— |
|
|
(11) |
|
|
Total change in deferred revenues |
|
$ |
(430) |
|
|
$ |
(88) |
|
|
$ |
1 |
|
|
$ |
(11) |
|
|
$ |
— |
|
|
$ |
(528) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Console |
|
$ |
319 |
|
|
$ |
38 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
357 |
|
|
PC |
|
119 |
|
|
334 |
|
|
18 |
|
|
— |
|
|
(8) |
|
|
463 |
|
|
Mobile and ancillary (1) |
|
136 |
|
|
67 |
|
|
721 |
|
|
— |
|
|
— |
|
|
924 |
|
|
Other (2) |
|
6 |
|
|
4 |
|
|
— |
|
|
101 |
|
|
— |
|
|
111 |
|
|
Total segment net revenues |
|
$ |
580 |
|
|
$ |
443 |
|
|
$ |
739 |
|
|
$ |
101 |
|
|
$ |
(8) |
|
|
$ |
1,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
Activision |
|
Blizzard |
|
King |
|
Non-reportable segments |
|
Elimination of intersegment revenues (3) |
|
Total |
|
Net revenues by platform: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Console |
|
$ |
460 |
|
|
$ |
24 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
484 |
|
|
PC |
|
124 |
|
|
251 |
|
|
17 |
|
|
— |
|
|
(9) |
|
|
383 |
|
|
Mobile and ancillary (1) |
|
115 |
|
|
27 |
|
|