Blizzard 2008 Annual Report Download - page 28

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14
• The major releases in 2008 of Call of Duty: World at War, Guitar Hero World Tour,
and James Bond: Quantum of Solace in the quarter ended December 31, 2008, and
the launch of Guitar Hero World Tour band bundle products consisting of a package
of software, drum, guitars and/or microphone in the quarter ended December 31,
2008. For the quarter ended December 31, 2008, Activision Blizzard had the #1 and
#2 best-selling console titles, Guitar Hero World Tour and Call of Duty: World at
War, respectively, in dollars in North America and Europe, according to The NPD
Group, Gfk and Charttrack;
• The release of the second expansion pack of World of Warcraft: Wrath of the Lich
King in November 2008, which is the fastest selling PC game of all time, and the
release of the first expansion pack of World of Warcraft: The Burning Crusade in
January 2007. The release of the World of Warcraft: The Burning Crusade also led
to higher box sales of World of Warcraft in 2007 when compared to year ended
2006;
• Additional value added services by Blizzard in connection with the game-play of
World of Warcraft;
• The continued growth of World of Warcraft subscription revenues. As of December
2008, World of Warcraft was played by more than 11.5 million subscribers
worldwide. The worldwide number of World of Warcraft subscribers grew by nearly
2 million for the year 2008, which is more than 20% greater than in December 2007.
World of Warcraft also recorded an increase of approximately 2 million subscribers
in 2007 when compared to the same period in 2006;
• Activision’s release in 2008 of an affiliated LucasArts’ title, Star Wars: The Force
Unleashed in Europe and Asia Pacific; and
• Activision’s catalog sales of Guitar Hero III: Legends of Rock, Guitar Hero
Aerosmith, Guitar Hero On Tour, and Call of Duty Modern Warfare also contributed
to Activision’s net revenues for the year ended December 31, 2008.
The above increase in 2008 was partially offset by year over year strengthening of the
U.S. Dollar in relation to GBP, EUR, AUD, KRW, and SEK which impacted international net
revenues, particularly in the December quarter of 2008. We estimate that the change in foreign
exchange rates decreased reported consolidated net revenues by approximately $112 million for
the year ended December 31, 2008.
Our segments’ operating income for the year ended December 31, 2008 was driven by the
following:
• The increase in each of our segments’ net revenues as previously noted; and
• The consummation of the Business Combination, which resulted in operating income
from Activision, Inc. of approximately $371 million being included from the date of
the Business Combination but not for prior periods.