How did we come to exist?
- Started in 1970s with Computer Space
- First Video Game company - Atari
- $99.6 billion in revenue by 2016
- Product Sales
- Revenue recognition
- Decreased by $339M from 2014 to 2015
- Subscription, licensing and other revenues
- Revenue recognition
- Increased by $595M from 2014 to 2015
- Product development: Increased by $75M
- Sales and marketing: Increased by $22M
- General and administrative: Decreased by $37M
- Mergers & Acquisitions for Growth:
- King acquisition
- Mobile gaming champion
- Candy Crush saga
- Major League Gaming (MLG)
- Competitive gaming
Who is Activision Blizzard?
- Merger between Activision and Vivendi (Blizzard Entertainment) in 2008
- Activision
- First independent developer
- Blizzard Entertainment
- MMORPGs - massively multiplayer online role playing game
- Managment:
- Robert A. Kotick, CEO, joined 2008
- Dennis Durkin - CFO, joined in 2012
- Thomas Tippl - Former cfo, 2008 - 2012
- Major Competitors
- Riot Games
- NCsoft
- Square Enix
- Electronic Arts DICE
- Total cost of sales: Increased by $60M from 2014 to 2015
- Software royalties and amortization
- Video game development on major platforms
- Call of Duty
- World of Warcraft
- Original film
Software Development &
Intellectual Property Licenses
- Transaction Agreement terms
- $3.6 Billion to be held
- Time-line
- Nov. 2, 2015 - Entered into transaction Agreement
- Feb. 23, 2016 - completed acquisition
- Highly-complimentary mobile business
- Candy Crush
- Bubble witch
- farm heroes
- pet rescue
- all money market funds and highly liquid investments
- Cash held by foreign subsidiaries
- 2014: $3.6B
- 2015: $0.5B
- gaming development costs
- Software development costs
- Intellectual property licenses
- Ex. call of duty Theme song
- Accounting for software costs under
- FAS No. 86
- Current assets:
- Software development: Decrease of $116M
- I p licenses: increase of $25M
- Long-term assets:
- Software development: Increase of $ 60M
- I p licenses: decrease of $18M
- Increase in these assets = working on new game releases
- Decrease in these assets = Games are released
- assets amortization
- 2014: Product development year
- 2015: major release year
Forecast
- Mobile Gaming
- King Acquisition
- Pokemon Go
- Interactive MMo industry
- Existing games
- Online/mobile subscription sales
Intangible Assets
- Intangible Assets, net - definite assets subject to amortization
- Trademark/trade names - indefinite assets
- Goodwill - indefinite asset
- multiple mergers/acquisitions
- Increase of $9M due to Major League Gaming
- King acquisition in 2016
Accounts Payable
recap: Fiscal year 2015
Retained Earnings
- Incurring costs leading up to major releases.
- Continual Net Income growth
- Growth strategy:
- King Acquisition
- Operational Strategy:
- Mobile gaming
Deferred Revenues
?
Accumulated other comprehensive loss
- Revenue not earned yet:
- Destiny
- World of Warcraft
- Diablo
- Value Added Services
- Consumable Virtual Goods
- Durable Virtual Goods
- Foreign Exchange discrepancies
- Average Exchange Rate (2015)
vs.
- Exchange Rate on Dec. 31, 2015