Blizzard 2009 Annual Report Download - page 29

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17
• HigherroyaltiesexpensesforreleasedtitlesduringtheyearendedDecember31,2008,such
asTheBourneConspiracyandJamesBond:QuantumofSolace;and
• Prereleaseimpairmentsoncertaintitlesof$18millionfortheyearendedDecember31,
2008.
ProductDevelopment(amountsinmillions)
Year
ended
December31,
2009
%of
consolidated
net
revenues
Year
ended
December31,
2008
%of
consolidated
net
revenues
Year
ended
December31,
2007
%of
consolidated
net
revenues
Increase/
(decrease)
2009v
2008
Increase/
(decrease)
2008v
2007
Product
development...............
$627
15%
$592
20%
$397
29%
$35
$195
FortheyearendedDecember31,2009,productdevelopmentcostsincreasedascomparedto2008
primarilyduetopostBusinessCombinationproductdevelopmentcostsof$143millionfrombusinesses
previouslyoperatedbyActivision,Inc.,forthesixmonthperiodendedJune30,2009wereincludedin
2009,butnotin2008.Theincreaseinproductdevelopmentexpensewaspartiallyoffsetbythecomplete
winddownofNonCoreoperationsresultinginlowerproductdevelopmentexpensefromNonCore
operationsfortheyearendedDecember31,2009ascomparedto2008,suchasthewriteoffcapitalized
softwaredevelopmentcostsofcanceledtitlesintheamountof$71millionin2008fromourrationalization
ofourtitleportfolio.
FortheyearendedDecember31,2008,productdevelopmentcostsincreasedascomparedto2007
primarilyduetothefollowing:
• TheconsummationoftheBusinessCombination,whichresultedinproductdevelopment
expensesfromActivision,Inc.ofapproximately$187millionbeingincludedfromthedateof
theBusinessCombination,butnotin2007;
• IncludedintheNonCoreexitoperations,awriteoffofcapitalizedsoftwaredevelopment
costsofcanceledtitlesintheamountof$71millionin2008,asaresultoftherationalization
ofourtitleportfolio;and
• Increasedproductdevelopmentinvestmentcostsforourslateoffuturetitles.
SalesandMarketing(amountsinmillions)
Year
ended
December31,
2009
%of
total
consolidated
netrevs.
Year
ended
December31,
2008
%of
total
consolidated
netrevs.
Year
ended
December31,
2007
%of
total
consolidated
netrevs.
Increase/
(decrease)
2009v
2008
Increase/
(decrease)
2008v
2007
Salesand
marketing...............
$544
13%
$464
15%
$172
13%
$80
$292
ForyearendedDecember31,2009,salesandmarketingexpenseincreasedascomparedto2008
primarilyduetopostBusinessCombinationsalesandmarketingexpensesof$147millionfrombusinesses
previouslyoperatedbyActivision,Inc.,forthesixmonthperiodendedJune30,2009wereincludedin
2009,butnotin2008.Thisincreasewaspartiallyoffsetbyadecreaseprimarilyduetotheamortizationof
intangibleassetsof$40millionrelatedtoretailcustomerrelationshipsfortheyearendedDecember31,
2008andthecompletewinddownofNonCoreoperations.
FortheyearendedDecember31,2008,salesandmarketingexpensesincreasedascomparedto
2007primarilydueto:
• TheconsummationoftheBusinessCombination,whichresultedinsalesandmarketing
expensesfromActivision,Inc.ofapproximately$282millionbeingincludedfromthedateof
theBusinessCombination,butnotin2007;and