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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Activision Blizzard Inc | NASDAQ:ATVI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 94.42 | 104.01 | 94.42 | 0 | 01:00:00 |
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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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3100 Ocean Park Boulevard, Santa Monica, CA
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90405
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(Address of principal executive offices)
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(Zip Code)
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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
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Large Accelerated Filer
x
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Non-accelerated Filer
o
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Accelerated Filer
o
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Smaller reporting company
o
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Emerging growth company
o
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At March 31, 2019
|
|
At December 31, 2018
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
4,696
|
|
|
$
|
4,225
|
|
Accounts receivable, net of allowances of $106 and $190, at March 31, 2019 and December 31, 2018, respectively
|
594
|
|
|
1,035
|
|
||
Inventories, net
|
45
|
|
|
43
|
|
||
Software development
|
184
|
|
|
264
|
|
||
Other current assets
|
518
|
|
|
539
|
|
||
Total current assets
|
6,037
|
|
|
6,106
|
|
||
Software development
|
80
|
|
|
65
|
|
||
Property and equipment, net
|
264
|
|
|
282
|
|
||
Deferred income taxes, net
|
373
|
|
|
458
|
|
||
Other assets
|
751
|
|
|
482
|
|
||
Intangible assets, net
|
680
|
|
|
735
|
|
||
Goodwill
|
9,763
|
|
|
9,762
|
|
||
Total assets
|
$
|
17,948
|
|
|
$
|
17,890
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
166
|
|
|
$
|
253
|
|
Deferred revenues
|
931
|
|
|
1,493
|
|
||
Accrued expenses and other liabilities
|
1,198
|
|
|
896
|
|
||
Total current liabilities
|
2,295
|
|
|
2,642
|
|
||
Long-term debt, net
|
2,672
|
|
|
2,671
|
|
||
Deferred income taxes, net
|
22
|
|
|
18
|
|
||
Other liabilities
|
1,363
|
|
|
1,167
|
|
||
Total liabilities
|
6,352
|
|
|
6,498
|
|
||
Commitments and contingencies (Note 19)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Common stock, $0.000001 par value, 2,400,000,000 shares authorized, 1,194,600,733 and 1,192,093,991 shares issued at March 31, 2019 and December 31, 2018, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
11,004
|
|
|
10,963
|
|
||
Less: Treasury stock, at cost, 428,676,471 shares at March 31, 2019 and December 31, 2018
|
(5,563
|
)
|
|
(5,563
|
)
|
||
Retained earnings
|
6,757
|
|
|
6,593
|
|
||
Accumulated other comprehensive loss
|
(602
|
)
|
|
(601
|
)
|
||
Total shareholders’ equity
|
11,596
|
|
|
11,392
|
|
||
Total liabilities and shareholders’ equity
|
$
|
17,948
|
|
|
$
|
17,890
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net revenues
|
|
|
|
|
|
||
Product sales
|
$
|
656
|
|
|
$
|
720
|
|
Subscription, licensing, and other revenues
|
1,169
|
|
|
1,245
|
|
||
Total net revenues
|
1,825
|
|
|
1,965
|
|
||
|
|
|
|
||||
Costs and expenses
|
|
|
|
|
|
||
Cost of revenues—product sales:
|
|
|
|
||||
Product costs
|
152
|
|
|
162
|
|
||
Software royalties, amortization, and intellectual property licenses
|
111
|
|
|
146
|
|
||
Cost of revenues—subscription, licensing, and other revenues:
|
|
|
|
||||
Game operations and distribution costs
|
239
|
|
|
270
|
|
||
Software royalties, amortization, and intellectual property licenses
|
61
|
|
|
84
|
|
||
Product development
|
249
|
|
|
259
|
|
||
Sales and marketing
|
207
|
|
|
251
|
|
||
General and administrative
|
179
|
|
|
198
|
|
||
Restructuring and related costs
|
57
|
|
|
—
|
|
||
Total costs and expenses
|
1,255
|
|
|
1,370
|
|
||
|
|
|
|
||||
Operating income
|
570
|
|
|
595
|
|
||
Interest and other expense (income), net
|
3
|
|
|
28
|
|
||
Income before income tax expense
|
567
|
|
|
567
|
|
||
Income tax expense
|
120
|
|
|
67
|
|
||
Net income
|
$
|
447
|
|
|
$
|
500
|
|
|
|
|
|
||||
Earnings per common share
|
|
|
|
|
|
||
Basic
|
$
|
0.58
|
|
|
$
|
0.66
|
|
Diluted
|
$
|
0.58
|
|
|
$
|
0.65
|
|
|
|
|
|
||||
Weighted-average number of shares outstanding
|
|
|
|
|
|
||
Basic
|
764
|
|
|
759
|
|
||
Diluted
|
770
|
|
|
770
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
447
|
|
|
$
|
500
|
|
|
|
|
|
||||
Other comprehensive income (loss):
|
|
|
|
||||
Foreign currency translation adjustment, net of tax
|
2
|
|
|
1
|
|
||
Unrealized gains (losses) on forward contracts designated as hedges, net of tax
|
2
|
|
|
(12
|
)
|
||
Unrealized gains (losses) on investments, net of tax
|
(5
|
)
|
|
(3
|
)
|
||
Total other comprehensive income (loss)
|
$
|
(1
|
)
|
|
$
|
(14
|
)
|
Comprehensive income
|
$
|
446
|
|
|
$
|
486
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
447
|
|
|
$
|
500
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Deferred income taxes
|
86
|
|
|
29
|
|
||
Depreciation and amortization
|
87
|
|
|
155
|
|
||
Amortization of capitalized software development costs and intellectual property licenses
(1)
|
104
|
|
|
150
|
|
||
Share-based compensation expense (2)
|
63
|
|
|
54
|
|
||
Other
|
30
|
|
|
10
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|||
Accounts receivable, net
|
438
|
|
|
503
|
|
||
Inventories
|
(2
|
)
|
|
4
|
|
||
Software development and intellectual property licenses
|
(46
|
)
|
|
(100
|
)
|
||
Other assets
|
(19
|
)
|
|
22
|
|
||
Deferred revenues
|
(582
|
)
|
|
(551
|
)
|
||
Accounts payable
|
(91
|
)
|
|
(160
|
)
|
||
Accrued expenses and other liabilities
|
(65
|
)
|
|
(87
|
)
|
||
Net cash provided by operating activities
|
450
|
|
|
529
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|||
Proceeds from maturities of available-for-sale investments
|
13
|
|
|
—
|
|
||
Purchases of available-for-sale investments
|
—
|
|
|
(20
|
)
|
||
Capital expenditures
|
(18
|
)
|
|
(31
|
)
|
||
Net cash used in investing activities
|
(5
|
)
|
|
(51
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|||
Proceeds from issuance of common stock to employees
|
30
|
|
|
47
|
|
||
Tax payment related to net share settlements on restricted stock units
|
(6
|
)
|
|
(39
|
)
|
||
Net cash provided by financing activities
|
24
|
|
|
8
|
|
||
Effect of foreign exchange rate changes on cash and cash equivalents
|
2
|
|
|
18
|
|
||
Net increase in cash and cash equivalents and restricted cash
|
471
|
|
|
504
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
4,229
|
|
|
4,720
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
4,700
|
|
|
$
|
5,224
|
|
(1)
|
Excludes deferral and amortization of share-based compensation expense.
|
(2)
|
Includes the net effects of capitalization, deferral, and amortization of share-based compensation expense.
|
|
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, 2018
|
1,192
|
|
|
$
|
—
|
|
|
(429
|
)
|
|
$
|
(5,563
|
)
|
|
$
|
10,963
|
|
|
$
|
6,593
|
|
|
$
|
(601
|
)
|
|
$
|
11,392
|
|
Components of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
447
|
|
|
—
|
|
|
447
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Issuance of common stock pursuant to employee stock options
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||||
Issuance of common stock pursuant to restricted stock units
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock surrendered for employees’ tax liability
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
||||||
Share-based compensation expense related to employee stock options and restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||||
Dividends ($0.37 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(283
|
)
|
|
—
|
|
|
(283
|
)
|
||||||
Balance at March 31, 2019
|
1,195
|
|
|
$
|
—
|
|
|
(429
|
)
|
|
$
|
(5,563
|
)
|
|
$
|
11,004
|
|
|
$
|
6,757
|
|
|
$
|
(602
|
)
|
|
$
|
11,596
|
|
|
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, 2017
|
1,186
|
|
|
$
|
—
|
|
|
(429
|
)
|
|
$
|
(5,563
|
)
|
|
$
|
10,747
|
|
|
$
|
4,916
|
|
|
$
|
(638
|
)
|
|
$
|
9,462
|
|
Cumulative impact from adoption of new revenue accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88
|
|
|
3
|
|
|
91
|
|
||||||
Components of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
—
|
|
|
500
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
||||||
Issuance of common stock pursuant to employee stock options
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
47
|
|
||||||
Issuance of common stock pursuant to restricted stock units
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock surrendered for employees’ tax liability
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
||||||
Share-based compensation expense related to employee stock options and restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||||
Dividends ($0.34 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(259
|
)
|
|
—
|
|
|
(259
|
)
|
||||||
Balance at March 31, 2018
|
1,190
|
|
|
$
|
—
|
|
|
(429
|
)
|
|
$
|
(5,563
|
)
|
|
$
|
10,786
|
|
|
$
|
5,245
|
|
|
$
|
(649
|
)
|
|
$
|
9,819
|
|
•
|
the Activision Blizzard Studios (“Studios”) business, which is devoted to creating original film and television content based on our library of globally recognized intellectual properties, and which, in September 2018, released the third season of the animated TV series
Skylanders
™
Academy
on Netflix; and
|
•
|
the 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.
|
•
|
dividends payable of
$283 million
and
$259 million
, respectively; and
|
•
|
accrued withholding tax payments related to net share settlements on restricted stock units of
$40 million
and
$26 million
, respectively.
|
|
At March 31,
|
||||||
|
2019
|
|
2018
|
||||
Beginning restricted cash
|
$
|
4
|
|
|
$
|
7
|
|
Ending restricted cash
|
4
|
|
|
6
|
|
Condensed Consolidated Balance Sheet:
|
Balance at December 31, 2018
|
|
Adjustments due to adoption of new lease accounting standard
|
|
Balance at January 1, 2019
|
||||||
Assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
539
|
|
|
$
|
(8
|
)
|
|
$
|
531
|
|
Other assets
|
482
|
|
|
252
|
|
|
734
|
|
|||
Liabilities
|
|
|
|
|
|
||||||
Accrued expenses and other liabilities
|
$
|
896
|
|
|
$
|
54
|
|
|
$
|
950
|
|
Other liabilities
|
1,167
|
|
|
190
|
|
|
1,357
|
|
|
At March 31, 2019
|
|
At December 31, 2018
|
||||
Finished goods
|
$
|
44
|
|
|
$
|
40
|
|
Purchased parts and components
|
1
|
|
|
3
|
|
||
Inventories, net
|
$
|
45
|
|
|
$
|
43
|
|
|
At March 31, 2019
|
|
At December 31, 2018
|
||||
Internally-developed software costs
|
$
|
244
|
|
|
$
|
291
|
|
Payments made to third-party software developers
|
20
|
|
|
38
|
|
||
Total software development costs
|
$
|
264
|
|
|
$
|
329
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Amortization of capitalized software development costs and intellectual property licenses
|
$
|
110
|
|
|
$
|
152
|
|
|
At March 31, 2019
|
||||||||||||||
|
Estimated useful lives
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||
Acquired definite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Internally-developed franchises
|
3
|
-
|
11 years
|
|
$
|
1,154
|
|
|
$
|
(1,052
|
)
|
|
$
|
102
|
|
Developed software
|
2
|
-
|
5 years
|
|
601
|
|
|
(490
|
)
|
|
111
|
|
|||
Trade names
|
7
|
-
|
10 years
|
|
54
|
|
|
(24
|
)
|
|
30
|
|
|||
Other
|
1
|
-
|
15 years
|
|
19
|
|
|
(15
|
)
|
|
4
|
|
|||
Total definite-lived intangible assets (1)
|
|
|
|
|
$
|
1,828
|
|
|
$
|
(1,581
|
)
|
|
$
|
247
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acquired indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Activision trademark
|
Indefinite
|
|
|
|
|
|
|
|
386
|
|
|||||
Acquired trade names
|
Indefinite
|
|
|
|
|
|
|
|
47
|
|
|||||
Total indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
$
|
433
|
|
||
Total intangible assets, net
|
|
|
|
|
|
|
|
|
$
|
680
|
|
(1)
|
At March 31, 2019, the balances of the customer base intangible assets have been removed as such amounts were fully amortized in the prior year.
|
|
At December 31, 2018
|
||||||||||||||
|
Estimated useful lives
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||
Acquired definite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Internally-developed franchises
|
3
|
-
|
11 years
|
|
$
|
1,154
|
|
|
$
|
(1,032
|
)
|
|
$
|
122
|
|
Developed software
|
2
|
-
|
5 years
|
|
601
|
|
|
(456
|
)
|
|
145
|
|
|||
Customer base
|
2 years
|
|
617
|
|
|
(617
|
)
|
|
—
|
|
|||||
Trade names
|
7
|
-
|
10 years
|
|
54
|
|
|
(23
|
)
|
|
31
|
|
|||
Other
|
1
|
-
|
15 years
|
|
19
|
|
|
(15
|
)
|
|
4
|
|
|||
Total definite-lived intangible assets
|
|
|
|
|
$
|
2,445
|
|
|
$
|
(2,143
|
)
|
|
$
|
302
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acquired indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Activision trademark
|
Indefinite
|
|
|
|
|
|
|
|
386
|
|
|||||
Acquired trade names
|
Indefinite
|
|
|
|
|
|
|
|
47
|
|
|||||
Total indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
$
|
433
|
|
||
Total intangible assets, net
|
|
|
|
|
|
|
|
|
$
|
735
|
|
For the year ending December 31,
|
|
||
2019 (remaining nine months)
|
$
|
149
|
|
2020
|
74
|
|
|
2021
|
12
|
|
|
2022
|
7
|
|
|
2023
|
2
|
|
|
Thereafter
|
3
|
|
|
Total
|
$
|
247
|
|
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
6,897
|
|
|
$
|
190
|
|
|
$
|
2,675
|
|
|
$
|
9,762
|
|
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Balance at March 31, 2019
|
$
|
6,898
|
|
|
$
|
190
|
|
|
$
|
2,675
|
|
|
$
|
9,763
|
|
•
|
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 at March 31, 2019 Using
|
|
|
||||||||||||
|
As of March 31, 2019
|
|
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
|
$
|
3,991
|
|
|
$
|
3,991
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash and cash equivalents
|
Foreign government treasury bills
|
34
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
||||
U.S. treasuries and government agency securities
|
139
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
Other current assets
|
||||
Foreign currency forward contracts designated as hedges
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
Other current assets
|
||||
Foreign currency forward contracts not designated as hedges
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
Other current assets
|
||||
Total recurring fair value measurements
|
$
|
4,186
|
|
|
$
|
4,164
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts not designated as hedges
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
Accrued expenses and other liabilities
|
|
|
|
Fair Value Measurements at December 31, 2018 Using
|
|
|
||||||||||||
|
As of December 31, 2018
|
|
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
|
$
|
3,925
|
|
|
$
|
3,925
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash and cash equivalents
|
Foreign government treasury bills
|
32
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
||||
U.S. treasuries and government agency securities
|
150
|
|
|
150
|
|
|
—
|
|
|
—
|
|
|
Other current assets
|
||||
Foreign currency forward contracts designated as hedges
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
Other current assets
|
||||
Foreign currency forward contracts not designated as hedges
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
Other current assets
|
||||
Total recurring fair value measurements
|
$
|
4,121
|
|
|
$
|
4,107
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts designated as hedges
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
Accrued expenses and other liabilities
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||
|
Notional amount
|
Fair value gain (loss)
|
|
Notional amount
|
Fair value gain (loss)
|
||||||||
Foreign Currency:
|
|
|
|
|
|
||||||||
Buy USD, Sell Euro
|
$
|
530
|
|
$
|
21
|
|
|
$
|
723
|
|
$
|
12
|
|
|
For the Three Months Ended March 31,
|
|
|
|||||
|
2019
|
2018
|
|
Statement of Operations Classification
|
||||
Cash Flow Hedges
|
$
|
11
|
|
$
|
(10
|
)
|
|
Net revenues
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||
|
Notional amount
|
Fair value gain (loss)
|
|
Notional amount
|
Fair value gain (loss)
|
||||||||
Foreign Currency:
|
|
|
|
|
|
||||||||
Buy USD, Sell SEK
|
$
|
396
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
$
|
—
|
|
Buy USD, Sell EUR
|
64
|
|
1
|
|
|
—
|
|
—
|
|
||||
Buy EUR, Sell USD
|
64
|
|
(1
|
)
|
|
—
|
|
—
|
|
||||
Buy USD, Sell GBP
|
43
|
|
(1
|
)
|
|
55
|
|
1
|
|
|
Three Months Ended March 31, 2019
|
||
Lease costs
|
|
||
Operating lease costs
|
$
|
20
|
|
Variable lease costs
|
$
|
4
|
|
Supplemental Operating Cash Flows Information
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
22
|
|
ROU assets obtained in exchange for new lease obligations
|
$
|
19
|
|
Weighted Average Lease terms and discount rates
|
|
||
Remaining lease term
|
5.23 years
|
|
|
Discount rate
|
4.15
|
%
|
|
At March 31, 2019
|
|
Balance Sheet Classification
|
||
ROU assets
|
$
|
248
|
|
|
Other assets
|
|
|
|
|
||
Current lease liabilities
|
$
|
62
|
|
|
Accrued expenses and other current liabilities
|
Non-current lease liabilities
|
221
|
|
|
Other liabilities
|
|
|
$
|
283
|
|
|
Total lease liabilities
|
For the years ending December 31,
|
|
|
|
2019
|
$
|
80
|
|
2020
|
70
|
|
|
2021
|
53
|
|
|
2022
|
45
|
|
|
2023
|
38
|
|
|
Thereafter
|
60
|
|
|
Total
|
$
|
346
|
|
•
|
$650 million
of
2.3%
unsecured senior notes due September 2021 (the “2021 Notes”) and
$850 million
of
3.4%
unsecured senior notes due September 2026 (the “2026 Notes”); and
|
•
|
$400 million
of
2.6%
unsecured senior notes due June 2022 (the “2022 Notes”),
$400 million
of
3.4%
unsecured senior notes due June 2027 (the “2027 Notes”), and
$400 million
of
4.5%
unsecured senior notes due June 2047 (the “2047 Notes”, and together with the 2021 Notes, the 2022 Notes, the 2026 Notes, and the 2027 Notes, the “Notes”).
|
|
At March 31, 2019
|
||||||||||
|
Gross Carrying
Amount
|
|
Unamortized
Discount and Deferred Financing Costs |
|
Net Carrying
Amount |
||||||
2021 Notes
|
$
|
650
|
|
|
$
|
(3
|
)
|
|
$
|
647
|
|
2022 Notes
|
400
|
|
|
(3
|
)
|
|
397
|
|
|||
2026 Notes
|
850
|
|
|
(8
|
)
|
|
842
|
|
|||
2027 Notes
|
400
|
|
|
(4
|
)
|
|
396
|
|
|||
2047 Notes
|
400
|
|
|
(10
|
)
|
|
390
|
|
|||
Total long-term debt
|
$
|
2,700
|
|
|
$
|
(28
|
)
|
|
$
|
2,672
|
|
|
At December 31, 2018
|
||||||||||
|
Gross Carrying
Amount |
|
Unamortized
Discount and Deferred Financing Costs |
|
Net Carrying
Amount |
||||||
2021 Notes
|
$
|
650
|
|
|
$
|
(3
|
)
|
|
$
|
647
|
|
2022 Notes
|
400
|
|
|
(3
|
)
|
|
397
|
|
|||
2026 Notes
|
850
|
|
|
(8
|
)
|
|
842
|
|
|||
2027 Notes
|
400
|
|
|
(5
|
)
|
|
395
|
|
|||
2047 Notes
|
400
|
|
|
(10
|
)
|
|
390
|
|
|||
Total long-term debt
|
$
|
2,700
|
|
|
$
|
(29
|
)
|
|
$
|
2,671
|
|
For the year ending December 31,
|
|
|
|
2019 (remaining nine months)
|
$
|
—
|
|
2020
|
—
|
|
|
2021
|
650
|
|
|
2022
|
400
|
|
|
2023
|
—
|
|
|
Thereafter
|
1,650
|
|
|
Total
|
$
|
2,700
|
|
|
For the Three Months Ended March 31, 2019
|
||||||||||||||
|
Foreign currency translation adjustments
|
|
Unrealized gain (loss) on forward contracts
|
|
Unrealized gain (loss) on available-for-sale securities
|
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
(629
|
)
|
|
$
|
23
|
|
|
$
|
5
|
|
|
$
|
(601
|
)
|
Other comprehensive income (loss) before reclassifications
|
2
|
|
|
13
|
|
|
(6
|
)
|
|
9
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss) into earnings
|
—
|
|
|
(11
|
)
|
|
1
|
|
|
(10
|
)
|
||||
Balance at March 31, 2019
|
$
|
(627
|
)
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
(602
|
)
|
|
For the Three Months Ended March 31, 2018
|
||||||||||||||
|
Foreign currency translation adjustments
|
|
Unrealized gain (loss) on forward contracts
|
|
Unrealized gain (loss) on available-for-sale securities
|
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
(623
|
)
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
(638
|
)
|
Cumulative impact from adoption of new revenue accounting standard
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Other comprehensive income (loss) before reclassifications
|
1
|
|
|
(22
|
)
|
|
(3
|
)
|
|
(24
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss) into earnings
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Balance at March 31, 2018
|
$
|
(619
|
)
|
|
$
|
(27
|
)
|
|
$
|
(3
|
)
|
|
$
|
(649
|
)
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
||||||||
Segment Net Revenues
|
|
|
|
|
|
|
|
||||||||
Net revenues from external customers
|
$
|
317
|
|
|
$
|
339
|
|
|
$
|
529
|
|
|
$
|
1,185
|
|
Intersegment net revenues (1)
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Segment net revenues
|
$
|
317
|
|
|
$
|
344
|
|
|
$
|
529
|
|
|
$
|
1,190
|
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
73
|
|
|
$
|
55
|
|
|
$
|
178
|
|
|
$
|
306
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended March 31, 2018
|
||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
||||||||
Segment Net Revenues
|
|
|
|
|
|
|
|
||||||||
Net revenues from external customers
|
$
|
312
|
|
|
$
|
479
|
|
|
$
|
534
|
|
|
$
|
1,325
|
|
Intersegment net revenues (1)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Segment net revenues
|
$
|
312
|
|
|
$
|
480
|
|
|
$
|
534
|
|
|
$
|
1,326
|
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
92
|
|
|
$
|
122
|
|
|
$
|
191
|
|
|
$
|
405
|
|
(1)
|
Intersegment revenues reflect licensing and service fees charged between segments.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Reconciliation to consolidated net revenues:
|
|
|
|
||||
Segment net revenues
|
$
|
1,190
|
|
|
$
|
1,326
|
|
Revenues from non-reportable segments (1)
|
73
|
|
|
59
|
|
||
Net effect from recognition (deferral) of deferred net revenues (2)
|
567
|
|
|
581
|
|
||
Elimination of intersegment revenues (3)
|
(5
|
)
|
|
(1
|
)
|
||
Consolidated net revenues
|
$
|
1,825
|
|
|
$
|
1,965
|
|
|
|
|
|
||||
Reconciliation to consolidated income before income tax expense:
|
|
|
|
||||
Segment operating income
|
$
|
306
|
|
|
$
|
405
|
|
Operating income (loss) from non-reportable segments (1)
|
(3
|
)
|
|
(11
|
)
|
||
Net effect from recognition (deferral) of deferred net revenues and related cost of revenues (2)
|
441
|
|
|
373
|
|
||
Share-based compensation expense
|
(63
|
)
|
|
(53
|
)
|
||
Amortization of intangible assets
|
(54
|
)
|
|
(119
|
)
|
||
Restructuring and related costs (4)
|
(57
|
)
|
|
—
|
|
||
Consolidated operating income
|
570
|
|
|
595
|
|
||
Interest and other expense (income), net
|
3
|
|
|
28
|
|
||
Consolidated income before income tax expense
|
$
|
567
|
|
|
$
|
567
|
|
(1)
|
Includes other income and expenses from operating segments managed outside the reportable segments, including our Studios and Distribution businesses. Also includes 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 restructuring initiatives, primarily severance and other restructuring-related costs.
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Non-reportable segments
|
|
Elimination of intersegment revenues (3)
|
|
Total
|
||||||||||||
Net revenues by distribution channel:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Digital online channels (1)
|
$
|
466
|
|
|
$
|
406
|
|
|
$
|
526
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
1,393
|
|
Retail channels
|
297
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
313
|
|
||||||
Other (2)
|
—
|
|
|
39
|
|
|
—
|
|
|
80
|
|
|
—
|
|
|
119
|
|
||||||
Total consolidated net revenues
|
$
|
763
|
|
|
$
|
461
|
|
|
$
|
526
|
|
|
$
|
80
|
|
|
$
|
(5
|
)
|
|
$
|
1,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in deferred revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Digital online channels (1)
|
$
|
(217
|
)
|
|
$
|
(114
|
)
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(328
|
)
|
Retail channels
|
(229
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(233
|
)
|
||||||
Other (2)
|
—
|
|
|
1
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(6
|
)
|
||||||
Total change in deferred revenues
|
$
|
(446
|
)
|
|
$
|
(117
|
)
|
|
$
|
3
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
(567
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Digital online channels (1)
|
$
|
249
|
|
|
$
|
292
|
|
|
$
|
529
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
1,065
|
|
Retail channels
|
68
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||||
Other (2)
|
—
|
|
|
40
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
113
|
|
||||||
Total segment net revenues
|
$
|
317
|
|
|
$
|
344
|
|
|
$
|
529
|
|
|
$
|
73
|
|
|
$
|
(5
|
)
|
|
$
|
1,258
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Non-reportable segments
|
|
Elimination of intersegment revenues (3)
|
|
Total
|
||||||||||||
Net revenues by distribution channel:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Digital online channels (1)
|
$
|
476
|
|
|
$
|
455
|
|
|
$
|
533
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
1,463
|
|
Retail channels
|
396
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409
|
|
||||||
Other (2)
|
—
|
|
|
40
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
93
|
|
||||||
Total consolidated net revenues
|
$
|
872
|
|
|
$
|
508
|
|
|
$
|
533
|
|
|
$
|
53
|
|
|
$
|
(1
|
)
|
|
$
|
1,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in deferred revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Digital online channels (1)
|
$
|
(232
|
)
|
|
$
|
(27
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(258
|
)
|
Retail channels
|
(328
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(330
|
)
|
||||||
Other (2)
|
—
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
7
|
|
||||||
Total change in deferred revenues
|
$
|
(560
|
)
|
|
$
|
(28
|
)
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
(581
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Digital online channels (1)
|
$
|
244
|
|
|
$
|
428
|
|
|
$
|
534
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
1,205
|
|
Retail channels
|
68
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
||||||
Other (2)
|
—
|
|
|
41
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
100
|
|
||||||
Total segment net revenues
|
$
|
312
|
|
|
$
|
480
|
|
|
$
|
534
|
|
|
$
|
59
|
|
|
$
|
(1
|
)
|
|
$
|
1,384
|
|
(1)
|
Net revenues from “Digital online channels” include revenues from digitally-distributed subscriptions, downloadable content, microtransactions, and products, as well as licensing royalties.
|
(2)
|
Net revenues from “Other” include revenues from our Studios and Distribution businesses, as well as revenues from MLG and the Overwatch League.
|
(3)
|
Intersegment revenues reflect licensing and service fees charged between segments.
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Non-reportable segments
|
|
Elimination of intersegment revenues (2)
|
|
Total
|
||||||||||||
Net revenues by geographic region:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
458
|
|
|
$
|
207
|
|
|
$
|
326
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
988
|
|
EMEA (1)
|
243
|
|
|
148
|
|
|
144
|
|
|
80
|
|
|
(1
|
)
|
|
614
|
|
||||||
Asia Pacific
|
62
|
|
|
106
|
|
|
56
|
|
|
—
|
|
|
(1
|
)
|
|
223
|
|
||||||
Total consolidated net revenues
|
$
|
763
|
|
|
$
|
461
|
|
|
$
|
526
|
|
|
$
|
80
|
|
|
$
|
(5
|
)
|
|
$
|
1,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in deferred revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
(267
|
)
|
|
$
|
(54
|
)
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(318
|
)
|
EMEA (1)
|
(146
|
)
|
|
(47
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(200
|
)
|
||||||
Asia Pacific
|
(33
|
)
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
||||||
Total change in deferred revenues
|
$
|
(446
|
)
|
|
$
|
(117
|
)
|
|
$
|
3
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
(567
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
191
|
|
|
$
|
153
|
|
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
670
|
|
EMEA (1)
|
97
|
|
|
101
|
|
|
144
|
|
|
73
|
|
|
(1
|
)
|
|
414
|
|
||||||
Asia Pacific
|
29
|
|
|
90
|
|
|
56
|
|
|
—
|
|
|
(1
|
)
|
|
174
|
|
||||||
Total segment net revenues
|
$
|
317
|
|
|
$
|
344
|
|
|
$
|
529
|
|
|
$
|
73
|
|
|
$
|
(5
|
)
|
|
$
|
1,258
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Non-reportable segments
|
|
Elimination of intersegment revenues (2)
|
|
Total
|
||||||||||||
Net revenues by geographic region:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
510
|
|
|
$
|
234
|
|
|
$
|
322
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
1,065
|
|
EMEA (1)
|
305
|
|
|
169
|
|
|
160
|
|
|
53
|
|
|
—
|
|
|
687
|
|
||||||
Asia Pacific
|
57
|
|
|
105
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
213
|
|
||||||
Total consolidated net revenues
|
$
|
872
|
|
|
$
|
508
|
|
|
$
|
533
|
|
|
$
|
53
|
|
|
$
|
(1
|
)
|
|
$
|
1,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in deferred revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
(328
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(333
|
)
|
EMEA (1)
|
(198
|
)
|
|
(8
|
)
|
|
—
|
|
|
6
|
|
|
—
|
|
|
(200
|
)
|
||||||
Asia Pacific
|
(34
|
)
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
||||||
Total change in deferred revenues
|
$
|
(560
|
)
|
|
$
|
(28
|
)
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
(581
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
182
|
|
|
$
|
228
|
|
|
$
|
323
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
732
|
|
EMEA (1)
|
107
|
|
|
161
|
|
|
160
|
|
|
59
|
|
|
—
|
|
|
487
|
|
||||||
Asia Pacific
|
23
|
|
|
91
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
165
|
|
||||||
Total segment net revenues
|
$
|
312
|
|
|
$
|
480
|
|
|
$
|
534
|
|
|
$
|
59
|
|
|
$
|
(1
|
)
|
|
$
|
1,384
|
|
(1)
|
“EMEA” consists of the Europe, Middle East, and Africa geographic regions.
|
(2)
|
Intersegment revenues reflect licensing and service fees charged between segments.
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Non-reportable segments
|
|
Elimination of intersegment revenues (3)
|
|
Total
|
||||||||||||
Net revenues by platform:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Console
|
$
|
635
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
677
|
|
PC
|
124
|
|
|
342
|
|
|
33
|
|
|
—
|
|
|
(5
|
)
|
|
494
|
|
||||||
Mobile and ancillary (1)
|
4
|
|
|
38
|
|
|
493
|
|
|
—
|
|
|
—
|
|
|
535
|
|
||||||
Other (2)
|
—
|
|
|
39
|
|
|
—
|
|
|
80
|
|
|
—
|
|
|
119
|
|
||||||
Total consolidated net revenues
|
$
|
763
|
|
|
$
|
461
|
|
|
$
|
526
|
|
|
$
|
80
|
|
|
$
|
(5
|
)
|
|
$
|
1,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in deferred revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Console
|
$
|
(386
|
)
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(398
|
)
|
PC
|
(59
|
)
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
||||||
Mobile and ancillary (1)
|
(1
|
)
|
|
(16
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||||
Other (2)
|
—
|
|
|
1
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(6
|
)
|
||||||
Total change in deferred revenues
|
$
|
(446
|
)
|
|
$
|
(117
|
)
|
|
$
|
3
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
(567
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Console
|
$
|
249
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
279
|
|
PC
|
65
|
|
|
252
|
|
|
33
|
|
|
—
|
|
|
(5
|
)
|
|
345
|
|
||||||
Mobile and ancillary (1)
|
3
|
|
|
22
|
|
|
496
|
|
|
—
|
|
|
—
|
|
|
521
|
|
||||||
Other (2)
|
—
|
|
|
40
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
113
|
|
||||||
Total segment net revenues
|
$
|
317
|
|
|
$
|
344
|
|
|
$
|
529
|
|
|
$
|
73
|
|
|
$
|
(5
|
)
|
|
$
|
1,258
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Non-reportable segments
|
|
Elimination of intersegment revenues (3)
|
|
Total
|
||||||||||||
Net revenues by platform:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Console
|
$
|
769
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
817
|
|
PC
|
99
|
|
|
378
|
|
|
43
|
|
|
—
|
|
|
(1
|
)
|
|
519
|
|
||||||
Mobile and ancillary (1)
|
4
|
|
|
42
|
|
|
490
|
|
|
—
|
|
|
—
|
|
|
536
|
|
||||||
Other (2)
|
—
|
|
|
40
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
93
|
|
||||||
Total consolidated net revenues
|
$
|
872
|
|
|
$
|
508
|
|
|
$
|
533
|
|
|
$
|
53
|
|
|
$
|
(1
|
)
|
|
$
|
1,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in deferred revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Console
|
$
|
(491
|
)
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(510
|
)
|
PC
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
||||||
Mobile and ancillary (1)
|
—
|
|
|
(10
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||||
Other (2)
|
—
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
7
|
|
||||||
Total change in deferred revenues
|
$
|
(560
|
)
|
|
$
|
(28
|
)
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
(581
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Console
|
$
|
278
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
307
|
|
PC
|
30
|
|
|
378
|
|
|
43
|
|
|
—
|
|
|
(1
|
)
|
|
450
|
|
||||||
Mobile and ancillary (1)
|
4
|
|
|
32
|
|
|
491
|
|
|
—
|
|
|
—
|
|
|
527
|
|
||||||
Other (2)
|
—
|
|
|
41
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
100
|
|
||||||
Total segment net revenues
|
$
|
312
|
|
|
$
|
480
|
|
|
$
|
534
|
|
|
$
|
59
|
|
|
$
|
(1
|
)
|
|
$
|
1,384
|
|
(1)
|
Net revenues from “Mobile and ancillary” include revenues from mobile devices, as well as non-platform specific game-related revenues, such as standalone sales of toys and accessories from our Skylanders
®
franchise and other physical merchandise and accessories.
|
(2)
|
Net revenues from “Other” include revenues from our Studios and Distribution businesses, as well as revenues from MLG and the Overwatch League.
|
(3)
|
Intersegment revenues reflect licensing and service fees charged between segments.
|
|
At March 31, 2019
|
|
At December 31, 2018
|
||||
Long-lived assets (1) by geographic region:
|
|
|
|
|
|
||
Americas
|
$
|
192
|
|
|
$
|
203
|
|
EMEA
|
58
|
|
|
62
|
|
||
Asia Pacific
|
14
|
|
|
17
|
|
||
Total long-lived assets by geographic region
|
$
|
264
|
|
|
$
|
282
|
|
(1)
|
The only long-lived assets that we classify by region are our long-term tangible fixed assets, which consist of property, plant, and equipment assets; all other long-term assets are not allocated by location.
|
•
|
increasing our investment in development for our largest, internally-owned franchises—across upfront releases, in-game content, mobile, and geographic expansion;
|
•
|
reducing certain non-development and administrative-related costs across our business; and
|
•
|
integrating our global and regional sales and “go-to-market,” partnerships, and sponsorships capabilities across the business, which we believe will enable us to provide better opportunities for talent, and greater expertise and scale on behalf of our business units.
|
|
Severance & employee related costs
|
|
Other costs
|
|
Total
|
||||||
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Costs charged to expense
|
43
|
|
|
14
|
|
|
57
|
|
|||
Cash payments
|
(11
|
)
|
|
(1
|
)
|
|
(12
|
)
|
|||
Non-cash charge adjustment (1)
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||
Balance at March 31, 2019
|
$
|
32
|
|
|
$
|
2
|
|
|
$
|
34
|
|
(1)
|
Adjustment relates to non-cash charges included in “Costs charged to expense” related to the write-downs of assets from canceled projects.
|
(1)
|
Includes charges related to operating segments managed outside the reportable segments, including our studios and distribution businesses. Also includes restructuring charges for our corporate and administrative functions.
|
(1)
|
Includes charges related to operating segments managed outside the reportable segments, including our studios and distribution businesses. Also includes restructuring charges for our corporate and administrative functions.
|
15.
|
Interest and Other Expense (Income), Net
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Interest income
|
|
$
|
(21
|
)
|
|
$
|
(14
|
)
|
Interest expense from debt and amortization of debt discount and deferred financing costs
|
|
23
|
|
|
41
|
|
||
Other expense (income), net
|
|
1
|
|
|
1
|
|
||
Interest and other expense (income), net
|
|
$
|
3
|
|
|
$
|
28
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
|
|
||
Consolidated net income
|
$
|
447
|
|
|
$
|
500
|
|
Denominator:
|
|
|
|
|
|
||
Denominator for basic earnings per common share—weighted-average common shares outstanding
|
764
|
|
|
759
|
|
||
Effect of potential dilutive common shares under the treasury stock method—employee stock options and awards
|
6
|
|
|
11
|
|
||
Denominator for basic earnings per common share—weighted-average dilutive common shares outstanding
|
770
|
|
|
770
|
|
||
|
|
|
|
||||
Basic earnings per common share
|
$
|
0.58
|
|
|
$
|
0.66
|
|
Diluted earnings per common share
|
$
|
0.58
|
|
|
$
|
0.65
|
|
•
|
the Activision Blizzard Studios (“Studios”) business, which is devoted to creating original film and television content based on our library of globally recognized intellectual properties, and which, in September 2018, released the third season of the animated TV series
Skylanders™ Academy
on Netflix; and
|
•
|
the 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.
|
•
|
consolidated net revenues decreased
7%
to
$1.83 billion
, and consolidated operating income decreased
4%
to
$570 million
, as compared to consolidated net revenues of
$1.97 billion
and consolidated operating income of
$595 million
for the
three
months ended
March 31, 2018
;
|
•
|
revenues from digital online channels were
$1.39 billion
, or
76%
of consolidated net revenues, as compared to
$1.46 billion
, or
74%
of consolidated net revenues, for the
three
months ended
March 31, 2018
;
|
•
|
operating margin was
31.2%
, which includes $57 million in restructuring and related costs, as compared to
30.3%
for the
three
months ended
March 31, 2018
;
|
•
|
cash flows from operating activities were
$450 million
, a decrease of
15%
, as compared to
$529 million
for the
three
months ended
March 31, 2018
;
|
•
|
consolidated net income decreased
11%
to
$447 million
, as compared to
$500 million
for the
three
months ended
March 31, 2018
; and
|
•
|
diluted earnings per common share decreased
11%
to
$0.58
, as compared to
$0.65
for the
three
months ended
March 31, 2018
.
|
|
March 31, 2019
|
|
March 31, 2018
|
|
Increase (Decrease)
|
||||||
Net bookings
|
|
|
|
|
|
||||||
Three Months Ended
|
$
|
1,258
|
|
|
$
|
1,384
|
|
|
$
|
(126
|
)
|
•
|
lower net bookings from
World of Warcraft
, primarily due to the prior year including net bookings associated with in-game content delivered to customers upon pre-purchase of
World of Warcraft: Battle for Azeroth
TM
, with no comparable net bookings in the current period; and
|
•
|
lower net bookings from
Call of Duty: Black Ops 4
, which was released in October 2018, as compared to
Call of Duty: WWII
, which was released in November 2017.
|
|
March 31, 2019
|
|
December 31, 2018
|
|
September 30, 2018
|
|
June 30, 2018
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||
Activision
|
41
|
|
|
53
|
|
|
46
|
|
|
45
|
|
|
51
|
|
|
55
|
|
Blizzard
|
32
|
|
|
35
|
|
|
37
|
|
|
37
|
|
|
38
|
|
|
40
|
|
King
|
272
|
|
|
268
|
|
|
262
|
|
|
270
|
|
|
285
|
|
|
290
|
|
Total
|
345
|
|
|
356
|
|
|
345
|
|
|
352
|
|
|
374
|
|
|
385
|
|
•
|
decreases across King’s various franchises, primarily from less engaged users leaving the network, partially offset by an increase in average MAUs for the Candy Crush franchise;
|
•
|
lower average MAUs for Activision, primarily due to lower average MAUs from the Call of Duty franchise and the absence of Destiny MAUs in our operating metric; and
|
•
|
lower average MAUs for Blizzard, primarily due to lower average MAUs for
Hearthstone
and
Overwatch
.
|
|
For the Three Months Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
||||||||
Net revenues
|
|
|
|
|
|
|
|
|
|
||
Product sales
|
$
|
656
|
|
36
|
%
|
|
$
|
720
|
|
37
|
%
|
Subscription, licensing, and other revenues
|
1,169
|
|
64
|
|
|
1,245
|
|
63
|
|
||
Total net revenues
|
1,825
|
|
100
|
|
|
1,965
|
|
100
|
|
||
|
|
|
|
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||
Cost of revenues—product sales:
|
|
|
|
|
|
||||||
Product costs
|
152
|
|
23
|
|
|
162
|
|
23
|
|
||
Software royalties, amortization, and intellectual property licenses
|
111
|
|
17
|
|
|
146
|
|
20
|
|
||
Cost of revenues—subscription, licensing, and other revenues:
|
|
|
|
|
|
||||||
Game operations and distribution costs
|
239
|
|
20
|
|
|
270
|
|
22
|
|
||
Software royalties, amortization, and intellectual property licenses
|
61
|
|
5
|
|
|
84
|
|
7
|
|
||
Product development
|
249
|
|
14
|
|
|
259
|
|
13
|
|
||
Sales and marketing
|
207
|
|
11
|
|
|
251
|
|
13
|
|
||
General and administrative
|
179
|
|
10
|
|
|
198
|
|
10
|
|
||
Restructuring and related costs
|
57
|
|
3
|
|
|
—
|
|
—
|
|
||
Total costs and expenses
|
1,255
|
|
69
|
|
|
1,370
|
|
70
|
|
||
|
|
|
|
|
|
||||||
Operating income
|
570
|
|
31
|
|
|
595
|
|
30
|
|
||
Interest and other expense (income), net
|
3
|
|
—
|
|
|
28
|
|
1
|
|
||
Income before income tax expense
|
567
|
|
31
|
|
|
567
|
|
29
|
|
||
Income tax expense
|
120
|
|
7
|
|
|
67
|
|
3
|
|
||
Net income
|
$
|
447
|
|
24
|
%
|
|
$
|
500
|
|
25
|
%
|
|
For the Three Months Ended March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Consolidated net revenues
|
$
|
1,825
|
|
|
$
|
1,965
|
|
|
$
|
(140
|
)
|
|
(7
|
)%
|
Net effect from recognition (deferral) of deferred net revenues
|
567
|
|
|
581
|
|
|
(14
|
)
|
|
|
|
Three Months Ended March 31, 2019
|
|
$ Increase / (Decrease)
|
||||||||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
||||||||||||||||
Segment Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net revenues from external customers
|
$
|
317
|
|
|
$
|
339
|
|
|
$
|
529
|
|
|
$
|
1,185
|
|
|
$
|
5
|
|
|
$
|
(140
|
)
|
|
$
|
(5
|
)
|
|
$
|
(140
|
)
|
Intersegment net revenues
(1)
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||||
Segment net revenues
|
$
|
317
|
|
|
$
|
344
|
|
|
$
|
529
|
|
|
$
|
1,190
|
|
|
$
|
5
|
|
|
$
|
(136
|
)
|
|
$
|
(5
|
)
|
|
$
|
(136
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Segment operating income
|
$
|
73
|
|
|
$
|
55
|
|
|
$
|
178
|
|
|
$
|
306
|
|
|
$
|
(19
|
)
|
|
$
|
(67
|
)
|
|
$
|
(13
|
)
|
|
$
|
(99
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
|
|
|
|
|
|
|
|
||||||||||||||||
Segment Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net revenues from external customers
|
$
|
312
|
|
|
$
|
479
|
|
|
$
|
534
|
|
|
$
|
1,325
|
|
|
|
|
|
|
|
|
|
||||||||
Intersegment net revenues (1)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues
|
$
|
312
|
|
|
$
|
480
|
|
|
$
|
534
|
|
|
$
|
1,326
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Segment operating income
|
$
|
92
|
|
|
$
|
122
|
|
|
$
|
191
|
|
|
$
|
405
|
|
|
|
|
|
|
|
|
|
(1)
|
Intersegment revenues reflect licensing and service fees charged between segments.
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Reconciliation to consolidated net revenues:
|
|
|
|
||||
Segment net revenues
|
$
|
1,190
|
|
|
$
|
1,326
|
|
Revenues from non-reportable segments (1)
|
73
|
|
|
59
|
|
||
Net effect from recognition (deferral) of deferred net revenues
|
567
|
|
|
581
|
|
||
Elimination of intersegment revenues (2)
|
(5
|
)
|
|
(1
|
)
|
||
Consolidated net revenues
|
$
|
1,825
|
|
|
$
|
1,965
|
|
|
|
|
|
||||
Reconciliation to consolidated income before income tax expense:
|
|
|
|
||||
Segment operating income
|
$
|
306
|
|
|
$
|
405
|
|
Operating income (loss) from non-reportable segments (1)
|
(3
|
)
|
|
(11
|
)
|
||
Net effect from recognition (deferral) of deferred net revenues and related cost of revenues
|
441
|
|
|
373
|
|
||
Share-based compensation expense
|
(63
|
)
|
|
(53
|
)
|
||
Amortization of intangible assets
|
(54
|
)
|
|
(119
|
)
|
||
Restructuring and related costs (3)
|
(57
|
)
|
|
—
|
|
||
Consolidated operating income
|
570
|
|
|
595
|
|
||
Interest and other expense (income), net
|
3
|
|
|
28
|
|
||
Consolidated income before income tax expense
|
$
|
567
|
|
|
$
|
567
|
|
(1)
|
Includes other income and expenses from operating segments managed outside the reportable segments, including our Studios and Distribution businesses. Also includes unallocated corporate income and expenses.
|
(2)
|
Intersegment revenues reflect licensing and service fees charged between segments.
|
(3)
|
Reflects restructuring initiatives, primarily severance and other restructuring-related costs.
|
•
|
lower revenues from
Call of Duty: Black Ops 4
, which was released in October 2018, as compared to
Call of Duty: WWII
, which was released in November 2017; and
|
•
|
lower revenues from Call of Duty franchise catalog titles.
|
•
|
lower revenues from
World of Warcraft
,
primarily due to the prior year including revenues associated with in-game content delivered to customers upon pre-purchase of
World of Warcraft: Battle for Azeroth
, with no comparable revenues in the current period;
|
•
|
lower revenues from
Overwatch,
primarily driven by lower in-game purchases; and
|
•
|
lower revenues from
Hearthstone
.
|
•
|
higher cost of revenues, primarily driven by the March 2019 release of
Sekiro: Shadows Die Twice
,
with no comparable release in 2018; and
|
•
|
an increase in bad debt provisions.
|
•
|
lower sales and marketing spend, primarily driven by the Overwatch League; and
|
•
|
lower personnel costs.
|
|
For the Three Months Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
Net revenues by distribution channel:
|
|
|
|
|
|
|
|
|
|||
Digital online channels (1)
|
$
|
1,393
|
|
|
$
|
1,463
|
|
|
$
|
(70
|
)
|
Retail channels
|
313
|
|
|
409
|
|
|
(96
|
)
|
|||
Other (2)
|
119
|
|
|
93
|
|
|
26
|
|
|||
Total consolidated net revenues
|
$
|
1,825
|
|
|
$
|
1,965
|
|
|
$
|
(140
|
)
|
(1)
|
Net revenues from “Digital online channels” include revenues from digitally-distributed subscriptions, downloadable content, microtransactions, and products, as well as licensing royalties.
|
(2)
|
Net revenues from “Other” include revenues from our Studios and Distribution businesses, as well as revenues from MLG and the Overwatch League.
|
•
|
lower revenues recognized from the Destiny franchise, the publishing rights to which we sold to Bungie in December 2018, as previously disclosed; and
|
•
|
lower revenues recognized from
Overwatch,
primarily driven by lower in-game purchases.
|
•
|
higher revenues recognized from
Call of Duty: Black Ops 4
, which was released in October 2018, as compared to
Call of Duty: WWII
, which was released in November 2017; and
|
•
|
revenues from
Sekiro: Shadows Die Twice
,
which was released in March 2019, with no comparable release in 2018.
|
•
|
lower revenues recognized from the Destiny franchise; and
|
•
|
lower revenues recognized from
Call of Duty: Black Ops 4
, which was released in October 2018, as compared to
Call of Duty: WWII
, which was released in November 2017.
|
|
For the Three Months Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
Net revenues by geographic region:
|
|
|
|
|
|
|
|
|
|||
Americas
|
$
|
988
|
|
|
$
|
1,065
|
|
|
$
|
(77
|
)
|
EMEA (1)
|
614
|
|
|
687
|
|
|
(73
|
)
|
|||
Asia Pacific
|
223
|
|
|
213
|
|
|
10
|
|
|||
Consolidated net revenues
|
$
|
1,825
|
|
|
$
|
1,965
|
|
|
$
|
(140
|
)
|
(1)
|
“EMEA” consists of the Europe, Middle East, and Africa geographic regions.
|
•
|
revenues from
Sekiro: Shadows Die Twice
,
which was released in March 2019, with no comparable release in 2018; and
|
•
|
higher revenues recognized from
Call of Duty: Black Ops 4
, which was released in October 2018, as compared to
Call of Duty: WWII
, which was released in November 2017.
|
|
For the Three Months Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
Net revenues by platform:
|
|
|
|
|
|
|
|
|
|||
Console
|
$
|
677
|
|
|
$
|
817
|
|
|
$
|
(140
|
)
|
PC
|
494
|
|
|
519
|
|
|
(25
|
)
|
|||
Mobile and ancillary (1)
|
535
|
|
|
536
|
|
|
(1
|
)
|
|||
Other (2)
|
119
|
|
|
93
|
|
|
26
|
|
|||
Total consolidated net revenues
|
$
|
1,825
|
|
|
$
|
1,965
|
|
|
$
|
(140
|
)
|
(1)
|
Net revenues from “Mobile and ancillary” include revenues from mobile devices, as well as non-platform-specific game-related revenues, such as standalone sales of toys and accessories from our Skylanders
®
franchise and other physical merchandise and accessories.
|
(2)
|
Net revenues from “Other” include revenues from our Studios and Distribution businesses, as well as revenues from MLG and the Overwatch League.
|
•
|
lower revenues recognized from the Destiny franchise, the publishing rights to which we sold to Bungie in December 2018, as previously disclosed; and
|
•
|
lower revenues recognized from Call of Duty franchise catalog titles.
|
•
|
lower revenues recognized from the Destiny franchise; and
|
•
|
lower revenues recognized from
Overwatch.
|
•
|
higher revenues recognized from
Call of Duty: Black Ops 4
, which was released in October 2018, as compared to
Call of Duty: WWII
, which was released in November 2017; and
|
•
|
revenues from
Sekiro: Shadows Die Twice
,
which was released in March 2019, with no comparable release in 2018.
|
|
Three Months Ended March 31, 2019
|
|
% of associated net revenues
|
|
Three Months Ended March 31, 2018
|
|
% of associated net revenues
|
|
Increase (Decrease)
|
||||||||
Cost of revenues—product sales:
|
|
|
|
|
|
|
|
|
|
||||||||
Product costs
|
$
|
152
|
|
|
23
|
%
|
|
$
|
162
|
|
|
23
|
%
|
|
$
|
(10
|
)
|
Software royalties, amortization, and intellectual property licenses
|
111
|
|
|
17
|
|
|
146
|
|
|
20
|
|
|
(35
|
)
|
|||
Cost of revenues—subscription, licensing, and other revenues:
|
|
|
|
|
|
|
|
|
|
||||||||
Game operations and distribution costs
|
239
|
|
|
20
|
|
|
270
|
|
|
22
|
|
|
(31
|
)
|
|||
Software royalties, amortization, and intellectual property licenses
|
61
|
|
|
5
|
|
|
84
|
|
|
7
|
|
|
(23
|
)
|
|||
Total cost of revenues
|
$
|
563
|
|
|
31
|
%
|
|
$
|
662
|
|
|
34
|
%
|
|
$
|
(99
|
)
|
•
|
higher software amortization and royalties for
Call of Duty: Black Ops 4
, which was released in October 2018, as compared to
Call of Duty: WWII
, which was released in November 2017; and
|
•
|
software amortization and royalties from
Sekiro: Shadows Die Twice
,
which was released in March 2019, with no comparable release in 2018.
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
March 31, 2018
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
249
|
|
|
14
|
%
|
|
$
|
259
|
|
|
13
|
%
|
|
$
|
(10
|
)
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
March 31, 2018
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
207
|
|
|
11
|
%
|
|
$
|
251
|
|
|
13
|
%
|
|
$
|
(44
|
)
|
•
|
a decrease of
$44 million
in amortization of the customer base intangible asset acquired as part of our acquisition of King, as the asset was fully amortized during the first quarter of 2018; and
|
•
|
a decrease of
$12 million
in marketing spending and personnel costs, primarily associated with lower marketing costs for the Overwatch League, partially offset by higher marketing costs for the Candy Crush franchise and for S
ekiro: Shadows Die Twice
,
which was released in March 2019, with no comparable release in 2018.
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
March 31, 2018
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
179
|
|
|
10
|
%
|
|
$
|
198
|
|
|
10
|
%
|
|
$
|
(19
|
)
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
March 31, 2018
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
57
|
|
|
3
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
57
|
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
March 31, 2018
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
3
|
|
|
—
|
%
|
|
$
|
28
|
|
|
1
|
%
|
|
$
|
(25
|
)
|
|
March 31, 2019
|
|
% of pretax income
|
|
March 31, 2018
|
|
% of pretax income
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
120
|
|
|
21
|
%
|
|
$
|
67
|
|
|
12
|
%
|
|
$
|
53
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Increase (Decrease)
|
||||||
Cash and cash equivalents
|
$
|
4,696
|
|
|
$
|
4,225
|
|
|
$
|
471
|
|
Short-term investments
|
143
|
|
|
155
|
|
|
(12
|
)
|
|||
|
$
|
4,839
|
|
|
$
|
4,380
|
|
|
$
|
459
|
|
Percentage of total assets
|
27
|
%
|
|
24
|
%
|
|
|
|
|
For the Three Months Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
Net cash provided by operating activities
|
$
|
450
|
|
|
$
|
529
|
|
|
$
|
(79
|
)
|
Net cash used in investing activities
|
(5
|
)
|
|
(51
|
)
|
|
46
|
|
|||
Net cash provided by financing activities
|
24
|
|
|
8
|
|
|
16
|
|
|||
Effect of foreign exchange rate changes
|
2
|
|
|
18
|
|
|
(16
|
)
|
|||
Net increase in cash and cash equivalents and restricted cash
|
$
|
471
|
|
|
$
|
504
|
|
|
$
|
(33
|
)
|
|
At March 31, 2019
|
||||||||||
|
Gross Carrying Amount
|
|
Unamortized Discount and Deferred Financing Costs
|
|
Net Carrying Amount
|
||||||
2021 Notes
|
$
|
650
|
|
|
$
|
(3
|
)
|
|
$
|
647
|
|
2022 Notes
|
400
|
|
|
(3
|
)
|
|
397
|
|
|||
2026 Notes
|
850
|
|
|
(8
|
)
|
|
842
|
|
|||
2027 Notes
|
400
|
|
|
(4
|
)
|
|
396
|
|
|||
2047 Notes
|
400
|
|
|
(10
|
)
|
|
390
|
|
|||
Total long-term debt
|
$
|
2,700
|
|
|
$
|
(28
|
)
|
|
$
|
2,672
|
|
|
At December 31, 2018
|
||||||||||
|
Gross Carrying Amount
|
|
Unamortized Discount and Deferred Financing Costs
|
|
Net Carrying Amount
|
||||||
2021 Notes
|
$
|
650
|
|
|
$
|
(3
|
)
|
|
$
|
647
|
|
2022 Notes
|
400
|
|
|
(3
|
)
|
|
397
|
|
|||
2026 Notes
|
850
|
|
|
(8
|
)
|
|
842
|
|
|||
2027 Notes
|
400
|
|
|
(5
|
)
|
|
395
|
|
|||
2047 Notes
|
400
|
|
|
(10
|
)
|
|
390
|
|
|||
Total long-term debt
|
$
|
2,700
|
|
|
$
|
(29
|
)
|
|
$
|
2,671
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||
|
Notional amount
|
Fair value gain (loss)
|
|
Notional amount
|
Fair value gain (loss)
|
||||||||
Foreign Currency:
|
|
|
|
|
|
||||||||
Buy USD, Sell Euro
|
$
|
530
|
|
$
|
21
|
|
|
$
|
723
|
|
$
|
12
|
|
|
For the Three Months Ended March 31,
|
|
|
|||||
|
2019
|
2018
|
|
Statement of Operations Classification
|
||||
Cash Flow Hedges
|
$
|
11
|
|
$
|
(10
|
)
|
|
Net revenues
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||
|
Notional amount
|
Fair value gain (loss)
|
|
Notional amount
|
Fair value gain (loss)
|
||||||||
Foreign Currency:
|
|
|
|
|
|
||||||||
Buy USD, Sell SEK
|
$
|
396
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
$
|
—
|
|
Buy USD, Sell EUR
|
64
|
|
1
|
|
|
—
|
|
—
|
|
||||
Buy EUR, Sell USD
|
64
|
|
(1
|
)
|
|
—
|
|
—
|
|
||||
Buy USD, Sell GBP
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43
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(1
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)
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55
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1
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Exhibit Number
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Exhibit
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3.1
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3.2
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10.1*
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10.2*
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10.3*†
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31.1
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31.2
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32.1
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32.2
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101.INS
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XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase Document.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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*
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Indicates a management contract or compensatory plan, contract or arrangement in which a director or executive officer of the Company participates.
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†
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Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.
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/s/ DENNIS DURKIN
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/s/ STEPHEN WEREB
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Dennis Durkin
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Stephen Wereb
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Chief Financial Officer and
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|
Deputy Chief Financial Officer, Chief Accounting Officer,
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Principal Financial Officer of
|
|
and Principal Accounting Officer of
|
Activision Blizzard, Inc.
|
|
Activision Blizzard, Inc.
|
1 Year Activision Blizzard Chart |
1 Month Activision Blizzard Chart |
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