Blizzard 2005 Annual Report Download - page 31

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Sony PlayStation 2 Net Revenues
(In thousands)
March 31, 2005
% of Publishing
Net Revenues March 31, 2004
% of Publishing
Net Revenues Increase/(Decrease) Percent Change
$417,310 39% $289,048 43% $128,262 44%
Net฀revenues฀from฀sales฀of฀titles฀for฀the฀PS2฀increased฀44%฀from฀$289.0฀million฀for฀the฀year฀ended฀March฀31,฀2004฀to฀$417.3฀million฀for฀the฀year฀ended฀March฀31,฀2005.฀
The฀increase฀was฀primarily฀due฀to฀strong,฀worldwide฀sales฀of฀several฀of฀our฀fiscal฀2005฀releases฀including฀
THUG 2, Call of Duty: Finest Hour, X-Men Legends, Spider-Man 2, Shrek 2, Shark Tale,
Lemony Snicket’s A Series of Unfortunate Events
฀and฀
Cabela’s Big Game Hunter 2005
.฀In฀fiscal฀2005,฀we฀released฀thirteen฀titles฀for฀PS2฀compared฀to฀ten฀in฀fiscal฀2004฀which฀included:฀
True Crime:
Streets of L.A., Tony Hawk’s Underground, X2: Wolverine’s Revenge, Return to Castle Wolfenstein, Cabela’s Dangerous Hunts
฀and฀
Cabela’s Deer Hunt 2004 Season
.฀We฀expect฀the฀installed฀base฀of฀PS2฀to฀continue฀
to฀grow,฀although฀at฀a฀slower฀rate฀than฀in฀previous฀years,฀due฀to฀the฀anticipated฀release฀of฀the฀next-generation฀system฀in฀calendar฀2006.฀Given฀our฀slate฀of฀fiscal฀2006฀
titles,฀as฀the฀installed฀base฀increases฀we฀expect฀our฀overall฀net฀revenues฀from฀PS2฀sales฀to฀continue฀to฀increase฀over฀prior฀periods.฀In฀addition,฀Sony฀recently฀announced฀
that฀they฀will฀be฀releasing฀their฀next-generation฀console,฀the฀PlayStation฀3฀(“PS3”),฀in฀calendar฀2006.฀Given฀the฀initially฀low฀installed฀base,฀we฀expect฀the฀release฀of฀the฀
PS3฀to฀have฀little฀impact฀on฀fiscal฀2006฀net฀revenues.
Microsoft Xbox Net Revenues
(In thousands)
March 31, 2005
% of Publishing
Net Revenues March 31, 2004
% of Publishing
Net Revenues Increase/(Decrease) Percent Change
$196,894 18% $145,111 22% $51,783 36%
Net฀revenues฀from฀sales฀of฀titles฀for฀the฀Xbox฀increased฀36%฀from฀$145.1฀million฀for฀the฀year฀ended฀March฀31,฀2004฀to฀$196.9฀million฀for฀the฀year฀ended฀March฀31,฀2005.฀
Though฀the฀number฀of฀new฀Xbox฀titles฀remained฀relatively฀consistent฀from฀fiscal฀2004฀to฀fiscal฀2005,฀we฀were฀able฀to฀increase฀our฀Xbox฀sales฀in฀both฀the฀North฀America฀and฀
international฀markets.฀The฀increase฀was฀primarily฀due฀to฀strong฀worldwide฀sales฀of฀several฀of฀our฀Xbox฀titles฀including฀
THUG 2, Call of Duty: Finest Hour, X-Men Legends, Spider-Man 2,
Shrek 2, Shark Tale, Greg Hastings’ Tournament Paintball
฀and฀
Cabela’s Big Game Hunter 2005
.฀The฀increase฀was฀also฀affected฀by฀an฀increased฀installed฀base฀of฀the฀Xbox฀due฀mainly฀to฀the฀price฀
cuts฀on฀the฀Xbox฀hardware฀in฀calendar฀2004.฀Given฀our฀slate฀of฀fiscal฀2006฀titles,฀as฀the฀installed฀base฀increases฀we฀expect฀our฀overall฀net฀revenues฀from฀Xbox฀sales฀to฀
continue฀to฀increase฀over฀prior฀periods.฀We฀expect฀the฀growth฀of฀the฀installed฀base฀of฀Xbox฀hardware฀to฀continue฀to฀grow฀through฀the฀remainder฀of฀calendar฀2005฀with฀
growth฀slowing฀as฀the฀release฀of฀Microsoft’s฀next-generation฀system,฀the฀Xbox฀360,฀which฀is฀expected฀to฀be฀released฀in฀November฀2005.฀Consistent฀with฀our฀strategy฀of฀
having฀a฀high-quality฀presence฀at฀the฀launch฀of฀each฀new฀platform,฀we฀are฀currently฀developing฀four฀titles,฀
Tony Hawk’s American Wasteland, Call of Duty 2, Quake IV
฀and฀
GUN,
฀to฀be฀
released฀concurrently฀with฀the฀launch฀of฀the฀Xbox฀360.฀We฀expect฀that฀the฀potential฀release฀of฀the฀Xbox฀360฀will฀not฀have฀a฀material฀impact฀on฀our฀fiscal฀2006฀net฀revenues฀
due฀to฀a฀number฀of฀factors,฀including฀an฀initially฀small฀installed฀base.
Nintendo GameCube Net Revenues
(In thousands)
March 31, 2005
% of Publishing
Net Revenues March 31, 2004
% of Publishing
Net Revenues Increase/(Decrease) Percent Change
$96,936 9% $52,909 8% $44,027 83%
Net฀revenues฀from฀sales฀of฀titles฀for฀the฀Nintendo฀GameCube฀increased฀83%฀from฀$52.9฀million฀for฀the฀year฀ended฀March฀31,฀2004฀to฀$96.9฀million฀for฀the฀year฀ended฀
March฀31,฀2005.฀The฀increase฀is฀primarily฀due฀to฀the฀increase฀in฀the฀number฀of฀GameCube฀new฀title฀releases฀from฀five฀in฀fiscal฀2004฀to฀eight฀in฀fiscal฀2005.฀Also฀driving฀the฀
increase฀in฀revenues฀was฀that฀the฀title฀slate฀in฀fiscal฀2005฀performed฀strongly฀as฀it฀was฀more฀targeted฀toward฀the฀demographic฀of฀the฀GameCube฀audience฀than฀the฀fiscal฀2004฀
GameCube฀title฀slate.฀Our฀fiscal฀2005฀title฀slate฀was฀driven฀by฀new฀title฀releases฀of฀
Shrek 2, Spider-Man 2, Shark Tale, Lemony Snicket’s A Series of Unfortunate Events, THUG 2
฀and฀
Call of Duty:
Finest Hour
.฀Fiscal฀2004฀GameCube฀revenues฀were฀driven฀mainly฀by฀releases฀of฀
Tony Hawk’s Underground
฀and฀
True Crime: Streets of L.A
.฀We฀expect฀the฀installed฀base฀of฀GameCube฀
page 29
Activision, Inc. — 2005 Annual Report