|
Delaware
|
|
95-4803544
|
||
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
||
|
|
|
|
|
3100 Ocean Park Boulevard
|
Santa Monica,
|
CA
|
|
90405
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.000001 per share
|
|
ATVI
|
|
The Nasdaq Global Select Market
|
Large Accelerated Filer
|
☒
|
|
Non-accelerated Filer
|
☐
|
|
Accelerated Filer
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2020
|
|
At December 31, 2019
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
5,906
|
|
|
$
|
5,794
|
|
Accounts receivable, net of allowances of $87 and $132, at March 31, 2020 and December 31, 2019, respectively
|
590
|
|
|
848
|
|
||
Software development
|
293
|
|
|
322
|
|
||
Other current assets
|
330
|
|
|
328
|
|
||
Total current assets
|
7,119
|
|
|
7,292
|
|
||
Software development
|
90
|
|
|
54
|
|
||
Property and equipment, net
|
236
|
|
|
253
|
|
||
Deferred income taxes, net
|
1,234
|
|
|
1,293
|
|
||
Other assets
|
664
|
|
|
658
|
|
||
Intangible assets, net
|
498
|
|
|
531
|
|
||
Goodwill
|
9,763
|
|
|
9,764
|
|
||
Total assets
|
$
|
19,604
|
|
|
$
|
19,845
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
158
|
|
|
$
|
292
|
|
Deferred revenues
|
1,064
|
|
|
1,375
|
|
||
Accrued expenses and other liabilities
|
1,338
|
|
|
1,248
|
|
||
Total current liabilities
|
2,560
|
|
|
2,915
|
|
||
Long-term debt, net
|
2,675
|
|
|
2,675
|
|
||
Deferred income taxes, net
|
458
|
|
|
505
|
|
||
Other liabilities
|
890
|
|
|
945
|
|
||
Total liabilities
|
6,583
|
|
|
7,040
|
|
||
|
|
|
|
|
|||
Shareholders’ equity:
|
|
|
|
||||
Common stock, $0.000001 par value, 2,400,000,000 shares authorized, 1,199,021,144 and 1,197,436,644 shares issued at March 31, 2020 and December 31, 2019, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
11,213
|
|
|
11,174
|
|
||
Less: Treasury stock, at cost, 428,676,471 shares at March 31, 2020 and December 31, 2019
|
(5,563
|
)
|
|
(5,563
|
)
|
||
Retained earnings
|
7,999
|
|
|
7,813
|
|
||
Accumulated other comprehensive loss
|
(628
|
)
|
|
(619
|
)
|
||
Total shareholders’ equity
|
13,021
|
|
|
12,805
|
|
||
Total liabilities and shareholders’ equity
|
$
|
19,604
|
|
|
$
|
19,845
|
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net revenues
|
|
|
|
|
||||
Product sales
|
|
$
|
543
|
|
|
$
|
656
|
|
Subscription, licensing, and other revenues
|
|
1,245
|
|
|
1,169
|
|
||
Total net revenues
|
|
1,788
|
|
|
1,825
|
|
||
|
|
|
|
|
||||
Costs and expenses
|
|
|
|
|
|
|||
Cost of revenues—product sales:
|
|
|
|
|
||||
Product costs
|
|
119
|
|
|
152
|
|
||
Software royalties, amortization, and intellectual property licenses
|
|
82
|
|
|
111
|
|
||
Cost of revenues—subscription, licensing, and other revenues:
|
|
|
|
|
||||
Game operations and distribution costs
|
|
258
|
|
|
239
|
|
||
Software royalties, amortization, and intellectual property licenses
|
|
46
|
|
|
61
|
|
||
Product development
|
|
238
|
|
|
249
|
|
||
Sales and marketing
|
|
243
|
|
|
207
|
|
||
General and administrative
|
|
167
|
|
|
179
|
|
||
Restructuring and related costs
|
|
23
|
|
|
57
|
|
||
Total costs and expenses
|
|
1,176
|
|
|
1,255
|
|
||
|
|
|
|
|
||||
Operating income
|
|
612
|
|
|
570
|
|
||
|
8
|
|
|
3
|
|
|||
Income before income tax expense
|
|
604
|
|
|
567
|
|
||
Income tax expense
|
|
99
|
|
|
120
|
|
||
Net income
|
|
$
|
505
|
|
|
$
|
447
|
|
|
|
|
|
|
||||
Earnings per common share
|
|
|
|
|
|
|||
Basic
|
|
$
|
0.66
|
|
|
$
|
0.58
|
|
Diluted
|
|
$
|
0.65
|
|
|
$
|
0.58
|
|
|
|
|
|
|
||||
Weighted-average number of shares outstanding
|
|
|
|
|
|
|||
Basic
|
|
769
|
|
|
764
|
|
||
Diluted
|
|
774
|
|
|
770
|
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net income
|
|
$
|
505
|
|
|
$
|
447
|
|
|
|
|
|
|
||||
Other comprehensive income (loss):
|
|
|
|
|
||||
Foreign currency translation adjustment, net of tax
|
|
(14
|
)
|
|
2
|
|
||
Unrealized gains (losses) on forward contracts designated as hedges, net of tax
|
|
1
|
|
|
2
|
|
||
Unrealized gains (losses) on investments, net of tax
|
|
4
|
|
|
(5
|
)
|
||
Total other comprehensive loss
|
|
$
|
(9
|
)
|
|
$
|
(1
|
)
|
Comprehensive income
|
|
$
|
496
|
|
|
$
|
446
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
505
|
|
|
$
|
447
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Deferred income taxes
|
11
|
|
|
86
|
|
||
Depreciation and amortization
|
62
|
|
|
87
|
|
||
Non-cash operating lease cost
|
16
|
|
|
17
|
|
||
Amortization of capitalized software development costs and intellectual property licenses (1)
|
77
|
|
|
104
|
|
||
Share-based compensation expense (2)
|
43
|
|
|
63
|
|
||
Other
|
—
|
|
|
30
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|||
Accounts receivable, net
|
249
|
|
|
438
|
|
||
Software development and intellectual property licenses
|
(85
|
)
|
|
(46
|
)
|
||
Other assets
|
(11
|
)
|
|
(38
|
)
|
||
Deferred revenues
|
(334
|
)
|
|
(582
|
)
|
||
Accounts payable
|
(132
|
)
|
|
(91
|
)
|
||
Accrued expenses and other liabilities
|
(253
|
)
|
|
(65
|
)
|
||
Net cash provided by operating activities
|
148
|
|
|
450
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|||
Proceeds from maturities of available-for-sale investments
|
—
|
|
|
13
|
|
||
Purchases of available-for-sale investments
|
(9
|
)
|
|
—
|
|
||
Capital expenditures
|
(19
|
)
|
|
(18
|
)
|
||
Net cash used in investing activities
|
(28
|
)
|
|
(5
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|||
Proceeds from issuance of common stock to employees
|
26
|
|
|
30
|
|
||
Tax payment related to net share settlements on restricted stock units
|
(19
|
)
|
|
(6
|
)
|
||
Net cash provided by financing activities
|
7
|
|
|
24
|
|
||
Effect of foreign exchange rate changes on cash and cash equivalents
|
(15
|
)
|
|
2
|
|
||
Net increase in cash and cash equivalents and restricted cash
|
112
|
|
|
471
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
5,798
|
|
|
4,229
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
5,910
|
|
|
$
|
4,700
|
|
(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, 2019
|
1,197
|
|
|
$
|
—
|
|
|
(429
|
)
|
|
$
|
(5,563
|
)
|
|
$
|
11,174
|
|
|
$
|
7,813
|
|
|
$
|
(619
|
)
|
|
$
|
12,805
|
|
Cumulative impact from adoption of new credit loss standard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Components of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
505
|
|
|
—
|
|
|
505
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||||
Issuance of common stock pursuant to employee stock options
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||||
Issuance of common stock pursuant to restricted stock units
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock surrendered for employees’ tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
||||||
Share-based compensation expense related to employee stock options and restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
43
|
|
||||||
Dividends ($0.41 per common share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(316
|
)
|
|
—
|
|
|
(316
|
)
|
||||||
Balance at March 31, 2020
|
1,199
|
|
|
$
|
—
|
|
|
(429
|
)
|
|
$
|
(5,563
|
)
|
|
$
|
11,213
|
|
|
$
|
7,999
|
|
|
$
|
(628
|
)
|
|
$
|
13,021
|
|
|
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
|
|
•
|
dividends payable of $316 million and $283 million, respectively; and
|
•
|
accrued withholding tax payments related to net share settlements on restricted stock units of $12 million and $40 million, respectively.
|
|
At March 31,
|
||||||
|
2020
|
|
2019
|
||||
Beginning restricted cash
|
$
|
4
|
|
|
$
|
4
|
|
Ending restricted cash
|
4
|
|
|
4
|
|
|
At March 31, 2020
|
|
At December 31, 2019
|
||||
Internally-developed software costs
|
$
|
354
|
|
|
$
|
345
|
|
Payments made to third-party software developers
|
29
|
|
|
31
|
|
||
Total software development costs
|
$
|
383
|
|
|
$
|
376
|
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Amortization of capitalized software development costs and intellectual property licenses
|
|
$
|
83
|
|
|
$
|
110
|
|
|
At March 31, 2020
|
||||||||||||||
|
Estimated useful lives
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||||
Acquired definite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Internally-developed franchises
|
3
|
-
|
11 years
|
|
$
|
1,154
|
|
|
$
|
(1,116
|
)
|
|
$
|
38
|
|
Developed software
|
2
|
-
|
5 years
|
|
601
|
|
|
(599
|
)
|
|
2
|
|
|||
Trade names
|
7
|
-
|
10 years
|
|
54
|
|
|
(31
|
)
|
|
23
|
|
|||
Other
|
1
|
-
|
15 years
|
|
19
|
|
|
(17
|
)
|
|
2
|
|
|||
Total definite-lived intangible assets
|
|
|
|
|
$
|
1,828
|
|
|
$
|
(1,763
|
)
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acquired indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Activision trademark
|
Indefinite
|
|
|
|
|
|
|
|
386
|
|
|||||
Acquired trade names
|
Indefinite
|
|
|
|
|
|
|
|
47
|
|
|||||
Total indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
$
|
433
|
|
||
Total intangible assets, net
|
|
|
|
|
|
|
|
|
$
|
498
|
|
|
At December 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
|
|
|
$
|
(1,105
|
)
|
|
$
|
49
|
|
Developed software
|
2
|
-
|
5 years
|
|
601
|
|
|
(579
|
)
|
|
22
|
|
|||
Trade names
|
7
|
-
|
10 years
|
|
54
|
|
|
(30
|
)
|
|
24
|
|
|||
Other
|
1
|
-
|
15 years
|
|
19
|
|
|
(16
|
)
|
|
3
|
|
|||
Total definite-lived intangible assets
|
|
|
|
|
$
|
1,828
|
|
|
$
|
(1,730
|
)
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acquired indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Activision trademark
|
Indefinite
|
|
|
|
|
|
|
|
386
|
|
|||||
Acquired trade names
|
Indefinite
|
|
|
|
|
|
|
|
47
|
|
|||||
Total indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
$
|
433
|
|
||
Total intangible assets, net
|
|
|
|
|
|
|
|
|
$
|
531
|
|
For the years ending December 31,
|
|
||
2020 (remaining nine months)
|
$
|
42
|
|
2021
|
11
|
|
|
2022
|
7
|
|
|
2023
|
2
|
|
|
2024
|
1
|
|
|
Thereafter
|
2
|
|
|
Total
|
$
|
65
|
|
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
||||||||
Balance at December 31, 2019
|
$
|
6,898
|
|
|
$
|
190
|
|
|
$
|
2,676
|
|
|
$
|
9,764
|
|
Other
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Balance at March 31, 2020
|
$
|
6,897
|
|
|
$
|
190
|
|
|
$
|
2,676
|
|
|
$
|
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, 2020 Using
|
|
|
||||||||||||
|
As of March 31, 2020
|
|
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
|
$
|
5,576
|
|
|
$
|
5,576
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash and cash equivalents
|
Foreign government treasury bills
|
32
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
||||
U.S. treasuries and government agency securities
|
74
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
Other current assets
|
||||
Foreign currency forward contracts designated as hedges
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
Other current assets and Other assets
|
||||
Total recurring fair value measurements
|
$
|
5,689
|
|
|
$
|
5,682
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts designated as hedges
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
Accrued expenses and other liabilities
|
|
|
|
Fair Value Measurements at December 31, 2019 Using
|
|
|
||||||||||||
|
As of December 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
|
$
|
5,320
|
|
|
$
|
5,320
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash and cash equivalents
|
Foreign government treasury bills
|
37
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
||||
U.S. treasuries and government agency securities
|
65
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
Other current assets
|
||||
Total recurring fair value measurements
|
$
|
5,422
|
|
|
$
|
5,422
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts not designated as hedges
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
Accrued expenses and other liabilities
|
Foreign currency forward contracts designated as hedges
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
Accrued expenses and other liabilities
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||||||||
|
Notional amount
|
Fair value gain (loss)
|
|
Notional amount
|
Fair value gain (loss)
|
||||||||
Foreign Currency:
|
|
|
|
|
|
||||||||
Buy USD, Sell Euro
|
$
|
646
|
|
$
|
6
|
|
|
$
|
350
|
|
$
|
(2
|
)
|
|
|
For the Three Months Ended March 31,
|
|
Statement of Operations Classification
|
|||||
|
|
2020
|
2019
|
|
|||||
Cash Flow Hedges
|
|
$
|
9
|
|
$
|
11
|
|
|
Net revenues
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||||
|
Notional amount
|
Fair value gain (loss)
|
|
Notional amount
|
Fair value gain (loss)
|
||||
Foreign Currency:
|
|
|
|
|
|
||||
Buy USD, Sell GBP
|
25
|
|
—
|
|
|
25
|
|
(2
|
)
|
•
|
$650 million of 2.3% unsecured senior notes due September 2021 (the “2021 Notes”);
|
•
|
$400 million of 2.6% unsecured senior notes due June 2022 (the “2022 Notes”);
|
•
|
$850 million of 3.4% unsecured senior notes due September 2026 (the “2026 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, 2020
|
||||||||||
|
Gross Carrying
Amount
|
|
Unamortized
Discount and Deferred Financing Costs |
|
Net Carrying
Amount |
||||||
2021 Notes
|
$
|
650
|
|
|
$
|
(2
|
)
|
|
$
|
648
|
|
2022 Notes
|
400
|
|
|
(2
|
)
|
|
398
|
|
|||
2026 Notes
|
850
|
|
|
(7
|
)
|
|
843
|
|
|||
2027 Notes
|
400
|
|
|
(5
|
)
|
|
395
|
|
|||
2047 Notes
|
400
|
|
|
(9
|
)
|
|
391
|
|
|||
Total long-term debt
|
$
|
2,700
|
|
|
$
|
(25
|
)
|
|
$
|
2,675
|
|
|
At December 31, 2019
|
||||||||||
|
Gross Carrying
Amount |
|
Unamortized
Discount and Deferred Financing Costs |
|
Net Carrying
Amount |
||||||
2021 Notes
|
$
|
650
|
|
|
$
|
(2
|
)
|
|
$
|
648
|
|
2022 Notes
|
400
|
|
|
(2
|
)
|
|
398
|
|
|||
2026 Notes
|
850
|
|
|
(7
|
)
|
|
843
|
|
|||
2027 Notes
|
400
|
|
|
(5
|
)
|
|
395
|
|
|||
2047 Notes
|
400
|
|
|
(9
|
)
|
|
391
|
|
|||
Total long-term debt
|
$
|
2,700
|
|
|
$
|
(25
|
)
|
|
$
|
2,675
|
|
For the years ending December 31,
|
|
|
|
2020 (remaining nine months)
|
$
|
—
|
|
2021
|
650
|
|
|
2022
|
400
|
|
|
2023
|
—
|
|
|
2024
|
—
|
|
|
Thereafter
|
1,650
|
|
|
Total
|
$
|
2,700
|
|
|
For the Three Months Ended March 31, 2020
|
||||||||||||||
|
Foreign currency translation adjustments
|
|
Unrealized gain (loss) on forward contracts
|
|
Unrealized gain (loss) on available-for-sale securities
|
|
Total
|
||||||||
Balance at December 31, 2019
|
$
|
(624
|
)
|
|
$
|
8
|
|
|
$
|
(3
|
)
|
|
$
|
(619
|
)
|
Other comprehensive income (loss) before reclassifications
|
(12
|
)
|
|
10
|
|
|
4
|
|
|
2
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss) into earnings
|
(2
|
)
|
|
(9
|
)
|
|
—
|
|
|
(11
|
)
|
||||
Balance at March 31, 2020
|
$
|
(638
|
)
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
(628
|
)
|
|
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
|
)
|
|
Three Months Ended March 31, 2020
|
||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
||||||||
Segment Net Revenues
|
|
|
|
|
|
|
|
||||||||
Net revenues from external customers
|
$
|
519
|
|
|
$
|
437
|
|
|
$
|
498
|
|
|
$
|
1,454
|
|
Intersegment net revenues (1)
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||
Segment net revenues
|
$
|
519
|
|
|
$
|
452
|
|
|
$
|
498
|
|
|
$
|
1,469
|
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
184
|
|
|
$
|
197
|
|
|
$
|
156
|
|
|
$
|
537
|
|
|
|
|
|
|
|
|
|
||||||||
|
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
|
|
|
|
|
|
|
|
|
|
(1)
|
Intersegment revenues reflect licensing and service fees charged between segments.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Reconciliation to consolidated net revenues:
|
|
|
|
|
||||
Segment net revenues
|
|
$
|
1,469
|
|
|
$
|
1,190
|
|
Revenues from non-reportable segments (1)
|
|
68
|
|
|
73
|
|
||
Net effect from recognition (deferral) of deferred net revenues (2)
|
|
266
|
|
|
567
|
|
||
Elimination of intersegment revenues (3)
|
|
(15
|
)
|
|
(5
|
)
|
||
Consolidated net revenues
|
|
$
|
1,788
|
|
|
$
|
1,825
|
|
|
|
|
|
|
||||
Reconciliation to consolidated income before income tax expense:
|
|
|
|
|
||||
Segment operating income
|
|
$
|
537
|
|
|
$
|
306
|
|
Operating income (loss) from non-reportable segments (1)
|
|
3
|
|
|
(3
|
)
|
||
Net effect from recognition (deferral) of deferred net revenues and related cost of revenues (2)
|
|
171
|
|
|
441
|
|
||
Share-based compensation expense
|
|
(43
|
)
|
|
(63
|
)
|
||
Amortization of intangible assets
|
|
(33
|
)
|
|
(54
|
)
|
||
Restructuring and related costs (4)
|
|
(23
|
)
|
|
(57
|
)
|
||
Consolidated operating income
|
|
612
|
|
|
570
|
|
||
Interest and other expense (income), net
|
|
8
|
|
|
3
|
|
||
Consolidated income before income tax expense
|
|
$
|
604
|
|
|
$
|
567
|
|
(1)
|
Includes other income and expenses from operating segments managed outside the reportable segments, including our Distribution business. 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, which include severance and other restructuring-related costs.
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Non-reportable segments
|
|
Elimination of intersegment revenues (3)
|
|
Total
|
||||||||||||
Net revenues by distribution channel:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Digital online channels (1)
|
$
|
548
|
|
|
$
|
409
|
|
|
$
|
499
|
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
1,441
|
|
Retail channels
|
212
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
221
|
|
||||||
Other (2)
|
20
|
|
|
31
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
126
|
|
||||||
Total consolidated net revenues
|
$
|
780
|
|
|
$
|
449
|
|
|
$
|
499
|
|
|
$
|
75
|
|
|
$
|
(15
|
)
|
|
$
|
1,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in deferred revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Digital online channels (1)
|
$
|
(93
|
)
|
|
$
|
8
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(86
|
)
|
Retail channels
|
(168
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
||||||
Other (2)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(8
|
)
|
||||||
Total change in deferred revenues
|
$
|
(261
|
)
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
(266
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Digital online channels (1)
|
$
|
455
|
|
|
$
|
417
|
|
|
$
|
498
|
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
1,355
|
|
Retail channels
|
44
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
||||||
Other (2)
|
20
|
|
|
30
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
118
|
|
||||||
Total segment net revenues
|
$
|
519
|
|
|
$
|
452
|
|
|
$
|
498
|
|
|
$
|
68
|
|
|
$
|
(15
|
)
|
|
$
|
1,522
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Distribution business, the Overwatch League, and the Call of Duty League.
|
(3)
|
Intersegment revenues reflect licensing and service fees charged between segments.
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Non-reportable segments
|
|
Elimination of intersegment revenues (2)
|
|
Total
|
||||||||||||
Net revenues by geographic region:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
472
|
|
|
$
|
172
|
|
|
$
|
311
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
948
|
|
EMEA (1)
|
239
|
|
|
121
|
|
|
136
|
|
|
75
|
|
|
(5
|
)
|
|
566
|
|
||||||
Asia Pacific
|
69
|
|
|
156
|
|
|
52
|
|
|
—
|
|
|
(3
|
)
|
|
274
|
|
||||||
Total consolidated net revenues
|
$
|
780
|
|
|
$
|
449
|
|
|
$
|
499
|
|
|
$
|
75
|
|
|
$
|
(15
|
)
|
|
$
|
1,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in deferred revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
(146
|
)
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(143
|
)
|
EMEA (1)
|
(96
|
)
|
|
3
|
|
|
(1
|
)
|
|
(7
|
)
|
|
—
|
|
|
(101
|
)
|
||||||
Asia Pacific
|
(19
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||||
Total change in deferred revenues
|
$
|
(261
|
)
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
(266
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
326
|
|
|
$
|
174
|
|
|
$
|
312
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
805
|
|
EMEA (1)
|
143
|
|
|
124
|
|
|
135
|
|
|
68
|
|
|
(5
|
)
|
|
465
|
|
||||||
Asia Pacific
|
50
|
|
|
154
|
|
|
51
|
|
|
—
|
|
|
(3
|
)
|
|
252
|
|
||||||
Total segment net revenues
|
$
|
519
|
|
|
$
|
452
|
|
|
$
|
498
|
|
|
$
|
68
|
|
|
$
|
(15
|
)
|
|
$
|
1,522
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2020
|
||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Non-reportable segments
|
|
Elimination of intersegment revenues (3)
|
|
Total
|
||||||||||||
Net revenues by platform:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Console
|
$
|
567
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
594
|
|
PC
|
126
|
|
|
362
|
|
|
25
|
|
|
—
|
|
|
(15
|
)
|
|
498
|
|
||||||
Mobile and ancillary (1)
|
67
|
|
|
29
|
|
|
474
|
|
|
—
|
|
|
—
|
|
|
570
|
|
||||||
Other (2)
|
20
|
|
|
31
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
126
|
|
||||||
Total consolidated net revenues
|
$
|
780
|
|
|
$
|
449
|
|
|
$
|
499
|
|
|
$
|
75
|
|
|
$
|
(15
|
)
|
|
$
|
1,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in deferred revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Console
|
$
|
(223
|
)
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(231
|
)
|
PC
|
(37
|
)
|
|
19
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
||||||
Mobile and ancillary (1)
|
(1
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||||
Other (2)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(8
|
)
|
||||||
Total change in deferred revenues
|
$
|
(261
|
)
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
(266
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Console
|
$
|
344
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
363
|
|
PC
|
89
|
|
|
381
|
|
|
24
|
|
|
—
|
|
|
(15
|
)
|
|
479
|
|
||||||
Mobile and ancillary (1)
|
66
|
|
|
22
|
|
|
474
|
|
|
—
|
|
|
—
|
|
|
562
|
|
||||||
Other (2)
|
20
|
|
|
30
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
118
|
|
||||||
Total segment net revenues
|
$
|
519
|
|
|
$
|
452
|
|
|
$
|
498
|
|
|
$
|
68
|
|
|
$
|
(15
|
)
|
|
$
|
1,522
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 physical merchandise and accessories.
|
(2)
|
Net revenues from “Other” 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.
|
|
At March 31, 2020
|
|
At December 31, 2019
|
||||
Long-lived assets (1) by geographic region:
|
|
|
|
|
|
||
Americas
|
$
|
312
|
|
|
$
|
322
|
|
EMEA
|
133
|
|
|
142
|
|
||
Asia Pacific
|
18
|
|
|
21
|
|
||
Total long-lived assets by geographic region
|
$
|
463
|
|
|
$
|
485
|
|
(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, and our lease ROU 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 and employee-related costs
|
|
Facilities and related costs
|
|
Other costs
|
|
Total
|
||||||||
Balance at December 31, 2019
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
35
|
|
Costs charged to expense
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Cash payments
|
(6
|
)
|
|
—
|
|
|
(2
|
)
|
|
(8
|
)
|
||||
Balance at March 31, 2020
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
50
|
|
|
|
|
|
|
|
|
|
||||||||
Cumulative charges incurred through March 31, 2020
|
$
|
99
|
|
|
$
|
29
|
|
|
$
|
32
|
|
|
$
|
160
|
|
(1)
|
Includes charges related to operating segments managed outside the reportable segments, including our Distribution business. Also includes restructuring charges for our corporate and administrative functions.
|
|
Total Charges Incurred Through March 31, 2020
|
Total Expected Charges
|
||||
Activision
|
$
|
21
|
|
$
|
25
|
|
Blizzard
|
94
|
|
105
|
|
||
King
|
19
|
|
20
|
|
||
Other segments (1)
|
26
|
|
40
|
|
||
Total
|
$
|
160
|
|
$
|
190
|
|
(1)
|
Includes charges related to operating segments managed outside the reportable segments, including our Distribution business. Also includes restructuring charges for our corporate and administrative functions.
|
12.
|
Interest and Other Expense (Income), Net
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Interest income
|
|
$
|
(16
|
)
|
|
$
|
(21
|
)
|
Interest expense from debt and amortization of debt discount and deferred financing costs
|
|
23
|
|
|
23
|
|
||
Other expense (income), net
|
|
1
|
|
|
1
|
|
||
Interest and other expense (income), net
|
|
$
|
8
|
|
|
$
|
3
|
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
|
||||
Consolidated net income
|
|
$
|
505
|
|
|
$
|
447
|
|
Denominator:
|
|
|
|
|
|
|
||
Denominator for basic earnings per common share—weighted-average common shares outstanding
|
|
769
|
|
|
764
|
|
||
Effect of potential dilutive common shares under the treasury stock method—employee stock options and awards
|
|
5
|
|
|
6
|
|
||
Denominator for basic earnings per common share—weighted-average dilutive common shares outstanding
|
|
774
|
|
|
770
|
|
||
|
|
|
|
|
||||
Basic earnings per common share
|
|
$
|
0.66
|
|
|
$
|
0.58
|
|
Diluted earnings per common share
|
|
$
|
0.65
|
|
|
$
|
0.58
|
|
|
|
For the Three Months Ended March 31,
|
||||
|
|
2020
|
|
2019
|
||
Restricted stock units and options with performance measures not yet met
|
|
3
|
|
|
3
|
|
Anti-dilutive employee stock options
|
|
6
|
|
|
6
|
|
•
|
consolidated net revenues decreased 2% to $1.79 billion, while consolidated operating income increased 7% to $612 million, as compared to consolidated net revenues of $1.83 billion and consolidated operating income of $570 million for the three months ended March 31, 2019;
|
•
|
revenues from digital online channels were $1.44 billion, or 81% of consolidated net revenues, as compared to $1.39 billion, or 76% of consolidated net revenues, for the three months ended March 31, 2019;
|
•
|
operating margin was 34.2%, which includes $23 million in restructuring and related costs, as compared to 31.2%, which included $57 million in restructuring and related costs, for the three months ended March 31, 2019;
|
•
|
consolidated net income increased 13% to $505 million, as compared to $447 million for the three months ended March 31, 2019;
|
•
|
diluted earnings per common share increased 12% to $0.65, as compared to $0.58 for the three months ended March 31, 2019; and
|
•
|
cash flows from operating activities were $148 million, a decrease of 67%, as compared to $450 million for the three months ended March 31, 2019.
|
|
March 31, 2020
|
|
March 31, 2019
|
|
Increase (Decrease)
|
||||||
Net bookings
|
$
|
1,522
|
|
|
$
|
1,258
|
|
|
$
|
264
|
|
In-game net bookings
|
$
|
956
|
|
|
$
|
794
|
|
|
$
|
162
|
|
•
|
a $202 million increase in Activision net bookings primarily driven by (1) higher net bookings from Call of Duty: Modern Warfare (which was released in October 2019, and when referred to herein, is inclusive of Call of Duty: Warzone, which was released in March 2020) as compared to Call of Duty: Black Ops 4, which was released in October 2018 and (2) net bookings from Call of Duty: Mobile, which was released in October 2019, partially offset by lower net bookings from Sekiro: Shadows Die TwiceTM, which was released in March 2019, with no comparable release in 2020; and
|
•
|
a $108 million increase in Blizzard net bookings driven by higher net bookings from World of Warcraft, primarily from higher subscription net bookings due to the release of World of Warcraft Classic in August 2019, and revenues associated with in-game content delivered to customers upon pre-purchase of World of Warcraft: Shadowlands, with no comparable net bookings in the prior period.
|
|
March 31, 2020
|
|
December 31, 2019
|
|
September 30, 2019
|
|
June 30, 2019
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||
Activision
|
102
|
|
|
128
|
|
|
36
|
|
|
37
|
|
|
41
|
|
|
53
|
|
Blizzard
|
32
|
|
|
32
|
|
|
33
|
|
|
32
|
|
|
32
|
|
|
35
|
|
King
|
273
|
|
|
249
|
|
|
247
|
|
|
258
|
|
|
272
|
|
|
268
|
|
Total
|
407
|
|
|
409
|
|
|
316
|
|
|
327
|
|
|
345
|
|
|
356
|
|
|
|
For the Three Months Ended March 31,
|
||||||||||
|
|
2020
|
|
2019
|
||||||||
Net revenues
|
|
|
|
|
|
|
|
|
|
|
||
Product sales
|
|
$
|
543
|
|
30
|
%
|
|
$
|
656
|
|
36
|
%
|
Subscription, licensing, and other revenues
|
|
1,245
|
|
70
|
|
|
1,169
|
|
64
|
|
||
Total net revenues
|
|
1,788
|
|
100
|
|
|
1,825
|
|
100
|
|
||
|
|
|
|
|
|
|
||||||
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|||
Cost of revenues—product sales:
|
|
|
|
|
|
|
||||||
Product costs
|
|
119
|
|
22
|
|
|
152
|
|
23
|
|
||
Software royalties, amortization, and intellectual property licenses
|
|
82
|
|
15
|
|
|
111
|
|
17
|
|
||
Cost of revenues—subscription, licensing, and other revenues:
|
|
|
|
|
|
|
||||||
Game operations and distribution costs
|
|
258
|
|
21
|
|
|
239
|
|
20
|
|
||
Software royalties, amortization, and intellectual property licenses
|
|
46
|
|
4
|
|
|
61
|
|
5
|
|
||
Product development
|
|
238
|
|
13
|
|
|
249
|
|
14
|
|
||
Sales and marketing
|
|
243
|
|
14
|
|
|
207
|
|
11
|
|
||
General and administrative
|
|
167
|
|
9
|
|
|
179
|
|
10
|
|
||
Restructuring and related costs
|
|
23
|
|
1
|
|
|
57
|
|
3
|
|
||
Total costs and expenses
|
|
1,176
|
|
66
|
|
|
1,255
|
|
69
|
|
||
|
|
|
|
|
|
|
||||||
Operating income
|
|
612
|
|
34
|
|
|
570
|
|
31
|
|
||
Interest and other expense (income), net
|
|
8
|
|
—
|
|
|
3
|
|
—
|
|
||
Income before income tax expense
|
|
604
|
|
34
|
|
|
567
|
|
31
|
|
||
Income tax expense
|
|
99
|
|
6
|
|
|
120
|
|
7
|
|
||
Net income
|
|
$
|
505
|
|
28
|
%
|
|
$
|
447
|
|
24
|
%
|
|
|
For the Three Months Ended March 31,
|
|||||||||||||
|
|
2020
|
|
2019
|
|
Increase (Decrease)
|
|
% Change
|
|||||||
Consolidated net revenues
|
|
$
|
1,788
|
|
|
$
|
1,825
|
|
|
$
|
(37
|
)
|
|
(2
|
)%
|
Net effect from recognition (deferral) of deferred net revenues
|
|
266
|
|
|
567
|
|
|
(301
|
)
|
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
In-game net revenues (1)
|
|
935
|
|
|
943
|
|
|
(8
|
)
|
|
(1
|
)%
|
(1)
|
In-game net revenues primarily includes the net amount of revenue recognized for downloadable content and microtransactions during the period.
|
•
|
lower revenues from Sekiro: Shadows Die Twice, which was released in March 2019, with no comparable release in 2020; and
|
•
|
the absence of revenues recognized from the Destiny franchise in 2019 (reflecting our sale of the publishing rights for Destiny to Bungie in December 2018).
|
•
|
lower in-game revenues from King, primarily due to lower revenues from player purchases, driven by the Candy Crush franchise;
|
•
|
lower in-game revenues recognized from World of Warcraft; and
|
•
|
lower in-game revenues recognized from Overwatch.
|
•
|
in-game revenues recognized from Call of Duty: Mobile; and
|
•
|
higher in-game revenues recognized from Call of Duty: Modern Warfare, which was released in October 2019, as compared to Call of Duty: Black Ops 4, which was released in October 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020
|
|
Increase / (Decrease)
|
||||||||||||||||||||||||||||
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
|
Activision
|
|
Blizzard
|
|
King
|
|
Total
|
||||||||||||||||
Segment Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net revenues from external customers
|
$
|
519
|
|
|
$
|
437
|
|
|
$
|
498
|
|
|
$
|
1,454
|
|
|
$
|
202
|
|
|
$
|
98
|
|
|
$
|
(31
|
)
|
|
$
|
269
|
|
Intersegment net revenues (1)
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||||||
Segment net revenues
|
$
|
519
|
|
|
$
|
452
|
|
|
$
|
498
|
|
|
$
|
1,469
|
|
|
$
|
202
|
|
|
$
|
108
|
|
|
$
|
(31
|
)
|
|
$
|
279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Segment operating income
|
$
|
184
|
|
|
$
|
197
|
|
|
$
|
156
|
|
|
$
|
537
|
|
|
$
|
111
|
|
|
$
|
142
|
|
|
$
|
(22
|
)
|
|
$
|
231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
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
|
|
|
|
|
|
|
|
|
|
(1)
|
Intersegment revenues reflect licensing and service fees charged between segments.
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Reconciliation to consolidated net revenues:
|
|
|
|
|
||||
Segment net revenues
|
|
$
|
1,469
|
|
|
$
|
1,190
|
|
Revenues from non-reportable segments (1)
|
|
68
|
|
|
73
|
|
||
Net effect from recognition (deferral) of deferred net revenues (2)
|
|
266
|
|
|
567
|
|
||
Elimination of intersegment revenues (3)
|
|
(15
|
)
|
|
(5
|
)
|
||
Consolidated net revenues
|
|
$
|
1,788
|
|
|
$
|
1,825
|
|
|
|
|
|
|
||||
Reconciliation to consolidated income before income tax expense:
|
|
|
|
|
||||
Segment operating income
|
|
$
|
537
|
|
|
$
|
306
|
|
Operating income (loss) from non-reportable segments (1)
|
|
3
|
|
|
(3
|
)
|
||
Net effect from recognition (deferral) of deferred net revenues and related cost of revenues
|
|
171
|
|
|
441
|
|
||
Share-based compensation expense
|
|
(43
|
)
|
|
(63
|
)
|
||
Amortization of intangible assets
|
|
(33
|
)
|
|
(54
|
)
|
||
Restructuring and related costs (4)
|
|
(23
|
)
|
|
(57
|
)
|
||
Consolidated operating income
|
|
612
|
|
|
570
|
|
||
Interest and other expense (income), net
|
|
8
|
|
|
3
|
|
||
Consolidated income before income tax expense
|
|
$
|
604
|
|
|
$
|
567
|
|
(1)
|
Includes other income and expenses from operating segments managed outside the reportable segments, including our Distribution business. 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, which include severance and other restructuring-related costs.
|
•
|
higher revenues from Call of Duty: Modern Warfare, which was released in October 2019, as compared to Call of Duty: Black Ops 4, which was released in October 2018;
|
•
|
revenues from Call of Duty: Mobile, which was released in October 2019; and
|
•
|
revenues from the Call of Duty League, which began its first season in January 2020.
|
•
|
lower revenues from Sekiro: Shadows Die Twice, which was released in March 2019, with no comparable release in 2020; and
|
•
|
the absence of revenues from the Destiny franchise in 2019 (reflecting our sale of the publishing rights for Destiny to Bungie in December 2018).
|
•
|
higher revenues from World of Warcraft, primarily driven by higher subscription revenues due to the release of World of Warcraft Classic in August 2019, and revenues associated with in-game content delivered to customers upon pre-purchase of World of Warcraft: Shadowlands, with no comparable revenues in the prior period; and
|
•
|
revenues from Warcraft III: Reforged, which was released in January 2020.
|
•
|
higher revenues, as discussed above;
|
•
|
lower cost of revenues and marketing costs for Sekiro: Shadows Die Twice given the launch of the title in the prior year; and
|
•
|
lower bad debt provisions.
|
•
|
marketing costs, service provider fees such as digital storefront fees (e.g. fees retained by Apple and Google for our sales on their platforms) and server bandwidth fees, and software royalties for Call of Duty: Mobile in the current quarter with no such costs in the prior-year quarter; and
|
•
|
higher product development costs driven by higher personnel bonuses as a result of strong business performance.
|
•
|
higher revenues, as discussed above; and
|
•
|
lower product development costs, driven by higher capitalization of software development costs from the timing of game development cycles and higher personnel costs.
|
•
|
lower revenues, as discussed above; and
|
•
|
higher sales and marketing costs for the Candy Crush franchise.
|
|
|
For the Three Months Ended March 31,
|
||||||||||
|
|
2020
|
|
2019
|
|
Increase (Decrease)
|
||||||
Net revenues by distribution channel:
|
|
|
|
|
|
|
|
|
|
|||
Digital online channels (1)
|
|
$
|
1,441
|
|
|
$
|
1,393
|
|
|
$
|
48
|
|
Retail channels
|
|
221
|
|
|
313
|
|
|
(92
|
)
|
|||
Other (2)
|
|
126
|
|
|
119
|
|
|
7
|
|
|||
Total consolidated net revenues
|
|
$
|
1,788
|
|
|
$
|
1,825
|
|
|
$
|
(37
|
)
|
(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 Distribution business, the Overwatch League, and the Call of Duty League.
|
•
|
higher revenues recognized from Call of Duty: Modern Warfare, which was released in October 2019, as compared to Call of Duty: Black Ops 4, which was released in October 2018; and
|
•
|
revenues recognized from Call of Duty: Mobile, which was released in October 2019.
|
•
|
lower revenues from Sekiro: Shadows Die Twice; and
|
•
|
lower revenues recognized from Call of Duty: Modern Warfare as compared to Call of Duty: Black Ops 4.
|
|
|
For the Three Months Ended March 31,
|
||||||||||
|
|
2020
|
|
2019
|
|
Increase (Decrease)
|
||||||
Net revenues by geographic region:
|
|
|
|
|
|
|
|
|
|
|||
Americas
|
|
$
|
948
|
|
|
$
|
988
|
|
|
$
|
(40
|
)
|
EMEA (1)
|
|
566
|
|
|
614
|
|
|
(48
|
)
|
|||
Asia Pacific
|
|
274
|
|
|
223
|
|
|
51
|
|
|||
Consolidated net revenues
|
|
$
|
1,788
|
|
|
$
|
1,825
|
|
|
$
|
(37
|
)
|
(1)
|
“EMEA” consists of the Europe, Middle East, and Africa geographic regions.
|
•
|
higher subscription revenues from World of Warcraft, primarily driven by the release of World of Warcraft Classic in August 2019;
|
•
|
revenues from Warcraft III: Reforged, which was released in January 2020; and
|
•
|
revenues recognized from Call of Duty: Mobile, which was released in October 2019.
|
|
|
For the Three Months Ended March 31,
|
||||||||||
|
|
2020
|
|
2019
|
|
Increase (Decrease)
|
||||||
Net revenues by platform:
|
|
|
|
|
|
|
||||||
Console
|
|
$
|
594
|
|
|
$
|
677
|
|
|
$
|
(83
|
)
|
PC
|
|
498
|
|
|
494
|
|
|
4
|
|
|||
Mobile and ancillary (1)
|
|
570
|
|
|
535
|
|
|
35
|
|
|||
Other (2)
|
|
126
|
|
|
119
|
|
|
7
|
|
|||
Total consolidated net revenues
|
|
$
|
1,788
|
|
|
$
|
1,825
|
|
|
$
|
(37
|
)
|
(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 physical merchandise and accessories.
|
(2)
|
Net revenues from “Other” include revenues from our Distribution business, the Overwatch League, and the Call of Duty League.
|
|
Three Months Ended March 31, 2020
|
|
% of associated net revenues
|
|
Three Months Ended March 31, 2019
|
|
% of associated net revenues
|
|
Increase (Decrease)
|
||||||||
Cost of revenues—product sales:
|
|
|
|
|
|
|
|
|
|
||||||||
Product costs
|
$
|
119
|
|
|
22
|
%
|
|
$
|
152
|
|
|
23
|
%
|
|
$
|
(33
|
)
|
Software royalties, amortization, and intellectual property licenses
|
82
|
|
|
15
|
|
|
111
|
|
|
17
|
|
|
(29
|
)
|
|||
Cost of revenues—subscription, licensing, and other revenues:
|
|
|
|
|
|
|
|
|
|
||||||||
Game operations and distribution costs
|
258
|
|
|
21
|
|
|
239
|
|
|
20
|
|
|
19
|
|
|||
Software royalties, amortization, and intellectual property licenses
|
46
|
|
|
4
|
|
|
61
|
|
|
5
|
|
|
(15
|
)
|
|||
Total cost of revenues
|
$
|
505
|
|
|
28
|
%
|
|
$
|
563
|
|
|
31
|
%
|
|
$
|
(58
|
)
|
•
|
a $20 million decrease in software amortization and royalties from Activision, driven by lower software amortization and royalties from Sekiro: Shadows Die Twice, which was released in March 2019, with no comparable release in 2020; and
|
•
|
an $8 million decrease in software amortization and royalties from Blizzard, driven by lower software amortization and royalties from World of Warcraft, as the prior year included software amortization from the August 2018 release of World of Warcraft: Battle for Azeroth with no comparable amortization in the current year.
|
|
March 31, 2020
|
|
% of consolidated net revenues
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
238
|
|
|
13
|
%
|
|
$
|
249
|
|
|
14
|
%
|
|
$
|
(11
|
)
|
|
March 31, 2020
|
|
% of consolidated net revenues
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
243
|
|
|
14
|
%
|
|
$
|
207
|
|
|
11
|
%
|
|
$
|
36
|
|
|
March 31, 2020
|
|
% of consolidated net revenues
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
167
|
|
|
9
|
%
|
|
$
|
179
|
|
|
10
|
%
|
|
$
|
(12
|
)
|
|
March 31, 2020
|
|
% of consolidated net revenues
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
23
|
|
|
1
|
%
|
|
$
|
57
|
|
|
3
|
%
|
|
$
|
(34
|
)
|
|
March 31, 2020
|
|
% of consolidated net revenues
|
|
March 31, 2019
|
|
% of consolidated net revenues
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
8
|
|
|
—
|
%
|
|
$
|
3
|
|
|
—
|
%
|
|
$
|
5
|
|
|
March 31, 2020
|
|
% of pretax income
|
|
March 31, 2019
|
|
% of pretax income
|
|
Increase (Decrease)
|
||||||||
Three Months Ended
|
$
|
99
|
|
|
16
|
%
|
|
$
|
120
|
|
|
21
|
%
|
|
$
|
(21
|
)
|
|
March 31, 2020
|
|
December 31, 2019
|
|
Increase (Decrease)
|
||||||
Cash and cash equivalents
|
$
|
5,906
|
|
|
$
|
5,794
|
|
|
$
|
112
|
|
Short-term investments
|
78
|
|
|
69
|
|
|
9
|
|
|||
|
$
|
5,984
|
|
|
$
|
5,863
|
|
|
$
|
121
|
|
Percentage of total assets
|
31
|
%
|
|
30
|
%
|
|
|
|
|
For the Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Increase (Decrease)
|
||||||
Net cash provided by operating activities
|
$
|
148
|
|
|
$
|
450
|
|
|
$
|
(302
|
)
|
Net cash used in investing activities
|
(28
|
)
|
|
(5
|
)
|
|
(23
|
)
|
|||
Net cash provided by financing activities
|
7
|
|
|
24
|
|
|
(17
|
)
|
|||
Effect of foreign exchange rate changes
|
(15
|
)
|
|
2
|
|
|
(17
|
)
|
|||
Net increase in cash and cash equivalents and restricted cash
|
$
|
112
|
|
|
$
|
471
|
|
|
$
|
(359
|
)
|
|
At March 31, 2020
|
||||||||||
|
Gross Carrying Amount
|
|
Unamortized Discount and Deferred Financing Costs
|
|
Net Carrying Amount
|
||||||
2021 Notes
|
$
|
650
|
|
|
$
|
(2
|
)
|
|
$
|
648
|
|
2022 Notes
|
400
|
|
|
(2
|
)
|
|
398
|
|
|||
2026 Notes
|
850
|
|
|
(7
|
)
|
|
843
|
|
|||
2027 Notes
|
400
|
|
|
(5
|
)
|
|
395
|
|
|||
2047 Notes
|
400
|
|
|
(9
|
)
|
|
391
|
|
|||
Total long-term debt
|
$
|
2,700
|
|
|
$
|
(25
|
)
|
|
$
|
2,675
|
|
|
At December 31, 2019
|
||||||||||
|
Gross Carrying Amount
|
|
Unamortized Discount and Deferred Financing Costs
|
|
Net Carrying Amount
|
||||||
2021 Notes
|
$
|
650
|
|
|
$
|
(2
|
)
|
|
$
|
648
|
|
2022 Notes
|
400
|
|
|
(2
|
)
|
|
398
|
|
|||
2026 Notes
|
850
|
|
|
(7
|
)
|
|
843
|
|
|||
2027 Notes
|
400
|
|
|
(5
|
)
|
|
395
|
|
|||
2047 Notes
|
400
|
|
|
(9
|
)
|
|
391
|
|
|||
Total long-term debt
|
$
|
2,700
|
|
|
$
|
(25
|
)
|
|
$
|
2,675
|
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||||||||
|
Notional amount
|
Fair value gain (loss)
|
|
Notional amount
|
Fair value gain (loss)
|
||||||||
Foreign Currency:
|
|
|
|
|
|
||||||||
Buy USD, Sell Euro
|
$
|
646
|
|
$
|
6
|
|
|
$
|
350
|
|
$
|
(2
|
)
|
|
|
For the Three Months Ended March 31,
|
|
Statement of Operations Classification
|
|||||
|
|
2020
|
2019
|
|
|||||
Cash Flow Hedges
|
|
$
|
9
|
|
$
|
11
|
|
|
Net revenues
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||||
|
Notional amount
|
Fair value gain (loss)
|
|
Notional amount
|
Fair value gain (loss)
|
||||
Foreign Currency:
|
|
|
|
|
|
||||
Buy USD, Sell GBP
|
25
|
|
—
|
|
|
25
|
|
(2
|
)
|
Exhibit Number
|
|
Exhibit
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
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.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
*
|
Indicates a management contract or compensatory plan, contract or arrangement in which a director or executive officer of the Company participates.
|
/s/ DENNIS DURKIN
|
Dennis Durkin
|
Chief Financial Officer, Principal Financial Officer, and
|
Principal Accounting Officer of Activision Blizzard, Inc.
|
|
/s/ ROBERT A. KOTICK
|
|
Robert A. Kotick
|
|
Chief Executive Officer and
|
|
Principal Executive Officer of
|
|
Activision Blizzard, Inc.
|
|
/s/ DENNIS DURKIN
|
|
Dennis Durkin
|
|
Chief Financial Officer, Principal Financial Officer, and
|
|
Principal Accounting Officer of Activision Blizzard, Inc.
|
|
/s/ ROBERT A. KOTICK
|
|
Robert A. Kotick
|
|
Chief Executive Officer and
|
|
Principal Executive Officer of
|
|
Activision Blizzard, Inc.
|
|
/s/ DENNIS DURKIN
|
|
Dennis Durkin
|
|
Chief Financial Officer, Principal Financial Officer, and
|
|
Principal Accounting Officer of Activision Blizzard, Inc.
|