Blizzard 2015 Annual Report Download - page 22

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4
Reportable Segments
Based upon our organizational structure, we conduct our business through two reportable operating segments, Activision
Publishing, Inc. and Blizzard Entertainment, Inc. Previously, we reported “Distribution” as a reportable segment. In the current period,
this was no longer deemed a separate reportable segment and is included in “Other”, along with our recently announced media
networks and film and television studio businesses.
(i) Activision Publishing, Inc.
Activision Publishing, Inc. (“Activision”) is a leading international developer and publisher of interactive software products and
content. Activision delivers content to a broad range of gamers, ranging from children to adults, and from core gamers to mass-market
consumers to “value” buyers seeking budget-priced software, in a variety of geographies. Activision develops games based on
internally-developed properties, including games in the Call of Duty® and Skylanders® franchises, and to a lesser extent, based on
licensed intellectual properties. Additionally, we have established a long-term alliance with Bungie to publish its game universe,
Destiny. Activision sells games through both retail and digital online channels. Activision currently offers games that operate on the
Microsoft Corporation (“Microsoft”) Xbox One (“Xbox One”) and Xbox 360 (“Xbox 360”), Nintendo Co. Ltd. (“Nintendo”) Wii U
(“Wii U”) and Wii (“Wii”), and Sony Computer Entertainment, Inc. (“Sony”) PlayStation 4 (“PS4”) and PlayStation 3 (“PS3”)
console systems (Xbox One, Wii U, and PS4 are collectively referred to as “next-generation”; Xbox 360, Wii, and PS3 are collectively
referred to as “prior-generation”); the personal computer (“PC”); the Nintendo 3DS, Nintendo Dual Screen, and Sony PlayStation Vita
handheld game systems; and mobile and tablet devices.
(ii) Blizzard Entertainment, Inc.
Blizzard Entertainment, Inc. (“Blizzard”) is a leader in online PC gaming, including the subscription-based massively multi-player
online role-playing game (“MMORPG”) category in terms of both subscriber base and revenues generated through its World of
Warcraft® franchise. Blizzard also develops, markets, and sells role-playing action and strategy games for the PC, console, mobile and
tablet platforms, including games in the multiple-award winning Diablo®, StarCraft®, Hearthstone®: Heroes of Warcraft™ and Heroes
of the Storm™ franchises. In addition, Blizzard maintains a proprietary online gaming service, Battle.net®, which facilitates the
creation of user-generated content, digital distribution and online social connectivity across all Blizzard games. Blizzard distributes its
products and generates revenues worldwide through various means, including: subscriptions; sales of prepaid subscription cards;
in-game purchases and services; retail sales of physical “boxed” products; online download sales of PC products; purchases and
downloads via third-party console, mobile and tablet platforms; and licensing of software to third-party or related party companies that
distribute Blizzard products.
(iii) Other
We also engage in other business opportunities that include:
• The Activision Blizzard Media Networks (“Media Networks”) business announced in 2015 which builds on our efforts in
competitive gaming and the growing eSports industry.
• The Activision Blizzard Studios (“Studios”) business announced in 2015 which is devoted to creating original film and
television content based on the company’s extensive library of iconic and globally-recognized intellectual properties.
• The Activision Blizzard Distribution (“Distribution”) business which consists of operations in Europe that provide
warehousing, logistical, and sales distribution services to third-party publishers of interactive entertainment software, our
own publishing operations, and manufacturers of interactive entertainment hardware.
Business Results and Highlights
In 2015, Activision Blizzard’s consolidated net revenues were $4.7 billion and consolidated operating income was $1.3 billion, as
compared to consolidated net revenues of $4.4 billion and consolidated operating income of $1.2 billion in 2014. We generated cash
flows from operating activities of approximately $1.2 billion in 2015, as compared to $1.3 billion in 2014.
Consolidated net income was $892 million in 2015, as compared to $835 million in 2014. Our diluted earnings per common share was
$1.19 in 2015, as compared to $1.13 in 2014.
Product Release Highlights
Games and digital downloadable content released, among others, during the year ended December 31, 2015 included:
10-K Activision_Master_032416_PrinterMarksAdded.pdf 4 3/24/16 11:00 PM