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35
ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Description of Business and Business Combination
Description of Business
Activision Blizzard, Inc. is a worldwide online, personal computer (“PC”), console, handheld, and mobile game
publisher of interactive entertainment. The terms “Activision Blizzard,” the “Company,” “we,” “us,” and “our” are used to
refer collectively to Activision Blizzard, Inc. and its subsidiaries. Based upon our current organizational structure, we operate
three operating segments as follows:
(i) Activision Publishing, Inc.
Activision Publishing, Inc. (“Activision”) is a leading international publisher of interactive software products and
content. Activision develops and publishes video games on various consoles, handheld platforms and the PC platform
through internally developed franchises and license agreements. Activision currently offers games that operate on the Sony
Computer Entertainment, Inc. (“Sony”) PlayStation 3 (“PS3”), Nintendo Co. Ltd. (“Nintendo”) Wii (“Wii”), and Microsoft
Corporation (“Microsoft”) Xbox 360 (“Xbox 360”) console systems; the Nintendo Dual Screen (“NDS”) and Nintendo DSi
(“DSi”) handheld devices; the PC; the Apple iPhone (“iPhone”), the Apple iPad (“iPad”) and other mobile devices. Our
Activision business involves the development, marketing, and sale of products through retail channels or digital downloads,
by license, or from our affiliate label program with certain third-party publishers.
(ii) Blizzard Entertainment, Inc.
Blizzard Entertainment, Inc. (“Blizzard”) is a leader in terms of subscriber base and revenues generated in the
subscription-based massively multi-player online role-playing game (“MMORPG”) category. Blizzard internally develops
and publishes PC-based computer games and maintains its proprietary online-game related service, Battle.net. Our Blizzard
business involves the development, marketing, sales and support of role playing action and strategy games. Blizzard also
develops, hosts, and supports its online subscription-based games in the MMORPG category. Blizzard is the development
studio and publisher best known as the creator of World of Warcraft and the multiple award winning Diablo, StarCraft, and
World of Warcraft franchises. Blizzard distributes its products and generates revenues worldwide through various means,
including: subscription revenues (which consist of fees from individuals playing World of Warcraft, prepaid cards and other
value-added service revenues such as realm transfers, faction changes, and other character customizations within the World of
Warcraft gameplay); retail sales of physical “boxed” products; online download sales of PC products; and licensing of
software to third-party or related party companies that distribute World of Warcraft and StarCraft II.
(iii) Activision Blizzard Distribution
Activision Blizzard Distribution (“Distribution”) 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 Combination
On July 9, 2008, a business combination (the “Business Combination”) by and among Activision, Inc., Sego Merger
Corporation, a wholly-owned subsidiary of Activision, Inc., Vivendi S.A. (“Vivendi”), VGAC LLC, a wholly-owned
subsidiary of Vivendi, and Vivendi Games, Inc. (“Vivendi Games”), a wholly-owned subsidiary of VGAC LLC was
consummated. As a result of the consummation of the Business Combination, Activision, Inc. was renamed Activision
Blizzard, Inc. (“Activision Blizzard”). For accounting purposes, the Business Combination was treated as a “reverse
acquisition,” with Vivendi Games deemed to be the acquirer. The historical financial statements of Activision Blizzard prior
to July 10, 2008 are those of Vivendi Games.
The common stock of Activision Blizzard is traded on The NASDAQ Stock Market under the ticker symbol
“ATVI.” Vivendi owned approximately 61% of Activision Blizzard’s outstanding common stock at December 31, 2010.