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19
These factors were partially offset by benefits from the cost-containment strategy we implemented and synergies
resulting from our restructuring efforts from the Business Combination including the complete wind down of our Non-Core
operations.
Impairment of Intangible Assets (amounts in millions)
Year
Ended
December 31,
2010
% of
consolidated
net revs.
Year
Ended
December 31,
2009
% of
consolidated
net revs.
Year
Ended
December 31,
2008
% of
consolidated
net revs.
Increase
(Decrease)
2010 v
2009
Increase
(Decrease)
2009 v
2008
Impairment of intangible
assets ................................ $326 7% $409 10% $— —% $(83) $409
In the fourth quarter of 2010, as a result of the franchise and industry results of the holiday season, we significantly
revised our outlook for the retail sales of software. With the impact of the continued economic downturn on our industry in
2010 and the change in the buying habits of casual consumers, we reassessed our overall expectations. We considered these
economic changes during our 2011 planning process that was conducted during the months of November and December,
which resulted in a strategy change to, among other things, focus on fewer title releases in the casual and music genres. As a
result, we updated our future projected revenue streams for our franchises in the casual and music genres. We performed
recoverability and, where applicable, impairment tests on the related intangible assets in accordance with ASC Subtopic 360-
10. Based on the analysis performed, we recorded impairment charges of $67 million, $9 million and $250 million to license
agreements, game engines and internally developed franchises intangible assets, respectively, for 2010 within our Activision
segment. See Note 12 of the Notes to Consolidated Financial Statements included in this Annual Report for additional
information regarding the determination of the impairment charges recorded for the year ended December 31, 2010.
In the fourth quarter of 2009, we recorded impairment charges of $24 million, $12 million and $373 million to
license agreements, game engines and internally developed franchises intangible assets, respectively, for 2009 within our
Activision segment.
Restructuring (amounts in millions)
Year
Ended
December 31,
2010
% of
consolidated
net revs.
Year
Ended
December 31,
2009
% of
consolidated
net revs.
Year
Ended
December 31,
2008
% of
consolidated
net revs.
Increase
(Decrease)
2010 v
2009
Increase
(Decrease)
2009 v
2008
Restructuring .......................... $— —% $23 1% $93 3% $(23) $(70)
In the third quarter of 2008, we implemented an organizational restructuring as a result of the Business
Combination. This organizational restructuring was to integrate different operations and to streamline the combined
Activision Blizzard organization. The implementation of the organizational restructuring resulted in restructuring charges,
including severance costs; contract termination costs; fixed asset write-off on disposals; impairment charges on acquired
trade names, prepaid royalties, intellectual property licenses; impairment charges on goodwill; and loss on disposal of
assets/liabilities. At June 30, 2009, we had completed the majority of our organizational restructuring activities as a result of
the Business Combination. See Note 8 of the Notes to Consolidated Financial Statements included in this Annual Report for
more detail and a rollforward of the restructuring liability that includes the beginning and ending liability, costs incurred,
cash payments and non cash write downs.
Investment and Other Income, Net (amounts in millions)
Year
Ended
December 31,
2010
% of
consolidated
net revs.
Year
Ended
December 31,
2009
% of
consolidated
net revs.
Year
Ended
December 31,
2008
% of
consolidated
net revs.
Increase
(Decrease)
2010 v
2009
Increase
(Decrease)
2009 v
2008
Investment and other income,
net .......................................... $23 1% $18 1% $46 2% $5 $(28)
Investment and other income, net increased in 2010 as compared to the same period in 2009, primarily as a result of
a reduction in fair value of a financial liability relating to a contingent earn-out liability from a previous acquisition. This
increase was partially offset by lower investment income due to lower interest rates.