Activision 2012 Annual Report Download - page 18

Through Battle.net and other sales of digital content, we
continued to achieve significant success in deriving revenue
from digital channels, reporting record digital revenues for
the calendar year. We were the #1 third-party interactive
entertainment Western digital publisher. GAAP net revenues
from digital channels exceeded $1.5 billion and represented
32% of the company’s total net revenues. Non-GAAP net
revenues from digital channels were a record $1.6 billion and
represented 32% of the company’s total net revenues. (This
non-GAAP percentage was down very slightly from 2012
due to the growth of non-digital sales.)
LOOKING AHEAD
Much has changed in our industry over the last two decades,
but we still operate the company with the same four basic
principles that we brought with us to a nearly insolvent
company named Mediagenic in 1991.
» Deliver innovative and compelling interactive entertainment
experiences
» Focus on the largest and most promising opportunities
» Recruit, reward, and retain great talent and build teams
that share common values
» Remain disciplined in the application of our commitment
to deliver shareholder value
These principles are simple to state, but they are challenging
to execute.
Our business depends entirely upon our ability to make games
that people want to play. We strive to make the most fun,
thrilling, social, and delightful entertainment experiences, and
to make sure that these experiences deliver significant value
to our players versus the many other entertainment choices
they have in today’s world. By creating products that deeply
engage and satisfy our audiences, we build a loyal fan base
and establish recurring profit streams.
We aim to allocate our capital efficiently to enable us to focus
on our most promising opportunities globally. We develop
new intellectual properties selectively, identifying those with
mass market appeal and building them into franchises that
we can consistently execute with unparalleled depth and
scale. We extend into new business models and high-margin
emerging markets only when highly promising or proven,
sometimes by others, to avoid failure or distraction.
We recognize that the only formula for success in a creative
industry is to attract and retain the best talent. We recognize
that the success of our franchises is built upon the shared
dedication from great teams of people whose sense of mutual
respect and teamwork drives our performance to new levels.
Lastly, we are committed to managing our finances to grow
our business and deliver and return long-term value to our
shareholders. We have an unwavering culture of financial
discipline, and we institutionalize our business processes to
ensure that we learn from and replicate past success. Most
importantly, we are a rigorously performance-based company—
in terms of how we compensate, promote, and measure our
own success.
We believe that our dedication and determination to live by
our four key strategic principles have built a framework that
will continue to guide our success. As we head into this
transitional period, we have never been more excited or
confident about our ability to deliver the great games our
audiences expect and wonderful new experiences our
audiences cannot yet imagine.
With appreciation,
Bobby Kotick
President and Chief Executive Officer,
Activision Blizzard
Brian Kelly
Co-Chairman of the Board,
Activision Blizzard
ACTIVISION BLIZZARD, INC.
/ 2012 ANNUAL REPORT / 16