Blizzard 2011 Annual Report Download - page 15

January 2012, more than seven million gamers had registered for
the service, which includes more than 1.5 million users who
purchased premium annual memberships.
•Skylanders Spyro’s Adventure™, Activision Publishing’s new
intellectual property, became the best-selling children’s video
game of the year and the best-selling new intellectual property
launch in Activision’s history, including interactive toy and
accessory pack sales.
•Blizzard Entertainment’s World of Warcraft® maintained its
leadership position as the largest subscription-based massively
multiplayer online role playing game (MMORPG) in the world
ending the year with approximately 10.2 million subscribers.
Our continued success is the result of our extraordinarily talented
employees around the world. They have unyielding respect for our
players, believe in teamwork, excellence, growing brands into
broad businesses, and building a company with enduring value.
More than any other asset, it is their commitment, imagination,
and intellectual and entrepreneurial talents, that will continue to
drive our future accomplishments.
Active Vision
Over the past 20 years, technological advances have transformed
interactive entertainment from a niche to a mainstream activity.
The Internet continues to evolve both the delivery and capability
of games, allowing consumers to play with and against friends,
anytime, anywhere. And in recent years, we have seen consumers
embrace new business models and platforms.
Our ability to combine innovation and inspired creativity with
sound business strategies and operational excellence is a core
strength of our people and our company.
Although the entertainment landscape has changed dramatically
over the past two decades, four key principles continue to guide
our success.
First, make great games.
Second, attract and retain the industry’s best talent. Our
performance-based rewards system gives our talented development
teams creative autonomy and the resources they need to make the
world’s best interactive entertainment. Our culture is one of
innovation—a continual search for finding better ways to surprise
and delight our audiences. By anticipating and understanding our
audiences’ needs locally, as well as globally, we are able to create
games that are redefining entertainment.
Third, we focus on the biggest opportunities that we believe will
deliver immersive and exciting experiences for our players and the
highest financial returns for shareholders. The momentum of our
business is propelled by our ability to take our brands and services
and turn them into engines of growth by leveraging new platforms
and business models that enable gamers to enjoy games on their
own terms—how they want, when they want, and where they
want. We continue to grow our digital footprint globally, but are
selective about the risks we take. We assess many ideas, but invest
in few—preferring to enter categories, markets and genres where
we can continue to extend our leadership position.
And lastly, we manage our finances to grow our business and
deliver value directly to our shareholders. We maintain a lean
structure, optimizing our costs and driving operational efficiencies
throughout our organization. We make material investments, but
do not overpay for acquisitions in the interest of buying growth at
any cost and have developed a culture of prudent risk taking with
serious financial accountability.
Delivering Compelling Entertainment
As gaming continues to enjoy broader appeal, the Internet will
continue to transform interactive entertainment over the next few
years and provides tremendous opportunities for publishers and
service providers like Activision Blizzard. Today, we have some
of the largest online player communities in the world with
approximately 50 million monthly average users across all of our
franchises. Through high-margin online offerings like subscription
and membership-based services, digital downloads, virtual item
sales and value-added services, we expect to deliver more value and
choice to consumers than ever before, which in the future should
result in broader adoption of our games and services.
Over the past three years, our company has evolved from a
traditional video game publisher to become a leading digital
entertainment provider. In 2011, revenues from digital channels
were a record $1.6 billion and accounted for more than 34% of our
company’s total net revenues.
Today, Activision Publishing’s Call of Duty is one of the largest
entertainment franchises in the world and we have grown the
brand every year for the past eight years. For 2011, Call of Duty:
Modern Warfare 3 was the best-selling game in the U.S. and
Europe, and Call of Duty: Black Ops, which was released in 2010,
was still the #5 best-selling game.
According to Microsoft®, in 2011 Call of Duty: Modern Warfare 3
was the most played game on Xbox LIVE®, Call of Duty: Black
Ops was the second most played game on the service, and the two-
year-old Call of Duty: Modern Warfare 2 was the third most
played game.
Additionally, the franchise is estimated to have had over 40 million
monthly active users across five Call of Duty titles: Modern
Warfare 3 exceeded 20 million, Black Ops exceeded 10 million,
Modern Warfare 2 exceeded 5 million, and World at War® and
Modern Warfare, which launched three and four years ago
respectively, had more than 2.5 million active users combined.
In 2011, sales of downloadable content for the Call of Duty
franchise set a new industry record. On a cumulative basis, sales of
downloadable content for Call of Duty: Black Ops, Call of Duty:
Modern Warfare 2 and Call of Duty: World at War were
equivalent to a top-five console title.
Bolstering the Call of Duty franchise, in November, Activision
Publishing launched an innovative online service, Call of Duty
Elite, which has become the third-largest Western interactive
entertainment subscription service, behind World of Warcraft and
Xbox LIVE. Built to support Call of Duty: Modern Warfare 2,
Elite lets gamers improve their skills, form groups, and play together
and compete for real world prizes. Through Call of Duty Elite,
players are able to interact with the game from a number of
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ACTIVISION BLIZZARD, INC.