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Results of Operations—Fiscal Years Ended March 31, 2004 and 2003
Net income for the year ended March 31, 2004 was $77.7 million or $0.54 per diluted share, as compared to
$66.2 million or $0.43 per diluted share for the year ended March 31, 2003.
Net Revenues
We primarily derive revenue from sales of packaged interactive software games designed for play on video game
consoles (such as the PS2, Xbox and GameCube), PCs and hand-held game devices (such as the GBA). We
also derive revenue from our distribution business in Europe that provides logistical and sales services to third-party
publishers of interactive entertainment software, our own publishing operations and third-party manufacturers of inter-
active entertainment hardware.
The following table details our consolidated net revenues by business segment and our publishing net revenues by territory
for the years ended March 31, 2004 and 2003 (in thousands):
Increase/ Percent
Year ended March 31, 2004 2003 (Decrease) Change
Publishing Net Revenues
North America $446,812 $432,261 $14,551 3%
Europe 197,300 164,984 32,316 20%
Other 21,620 18,730 2,890 15%
Total International 218,920 183,714 35,206 19%
Total Publishing Net Revenues 665,732 615,975 49,757 8%
Distribution Net Revenues 281,924 248,141 33,783 14%
Consolidated Net Revenues $947,656 $864,116 $83,540 10%
Consolidated net revenues increased 10% from $864.1 million for the year ended March 31, 2003 to $947.7
million for the year ended March 31, 2004. This increase was generated by both our publishing and distribution
businesses. The increase in consolidated net revenue was driven by the following:
• Strong performance of our fiscal 2004 third quarter releases of True Crime: Streets of L.A. and Tony Hawk’s
Underground for the PS2, Xbox and GameCube and Call of Duty for the PC. We continued to see strong sales
of these titles through March 2004. In addition, we had strong results from several other titles released during fis-
cal 2004 including Return to Castle Wolfenstein, X2: Wolverine’s Revenge, Cabela’s Dangerous Hunts, Cabela’s Deer
Hunt 2004 Season, and in select European markets, Jedi Knight: Jedi Academy. We also had strong catalog sales
from a number of our franchises, including Spider-Man. Catalog sales are sales of titles released prior to the
current fiscal year.
• Publishing console net revenues increased by 9% from $466.1 million for the year ended March 31, 2003 to
$508.4 million for the year ended March 31, 2004. As expected, within the mix of specific consoles, net
revenues from the sale of software for the prior generation console hardware systems, such as PS1, continued to
decline while the net revenues from the sale of software for the current generation of console hardware systems
continued to grow.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Activision, Inc. — 2004 Annual Report
page 20