Blizzard 2007 Annual Report Download - page 41

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A C T I V I S I O N , I N C . • • 2 0 0 7 A N N U A L R E P O R T
The Xbox360 was released in November 2005 and was the first of the next-generation hardware to
be released. Consistent with our goal of having a significant presence at the launch of each new
platform, we released four titles concurrently with the release of the Xbox360, Call of Duty 2, THAW,
QUAKE 4, and GUN. All of these titles were released at premium retail pricing of $59.99. Although
limited by hardware availability in fiscal 2006, we experienced strong sales of these four titles, and,
according to NPD Funworld, Call of Duty 2 was the number one title on the Xbox360 and had the
highest attach rate of any console launch in video game history.
Nintendo GameCube Net Revenues
(in thousands)
March 31,
2006
% of
Publishing
Net Revenues
March 31,
2005
% of
Publishing
Net Revenues
Increase/
(Decrease)
Percent
Change
$80,964 7% $96,936 9% $(15,972) (16)%
Net revenues from sales of titles for the Nintendo GameCube decreased 16% from $96.9 million for
the year ended March 31, 2005 to $81.0 million for the year ended March 31, 2006. Despite an increase
in the number of titles released for the GameCube from seven major titles for the year ended March
31, 2005 to nine major titles for the year ended March 31, 2006, the releases in fiscal 2006, which
included GUN, Call of Duty 2: Big Red One, THAW, and True Crime: New York City, were less geared
toward the demographics of the GameCube audience as compared to our fiscal 2005 title releases,
which included Spider-Man 2 and Shrek 2. Additionally, Madagascar, which was our top selling title on
the GameCube in fiscal 2006, was released at a lower initial retail pricing of $39.99 as compared to
Spider-Man 2 and Shrek 2, which were both released at an initial retail price of $49.99. Madagascar
was our top selling title on the GameCube for fiscal 2006 and although it performed strongly, it
compares to fiscal 2005 where our top two selling titles on the GameCube were Spider-Man 2 and
Shrek 2, each of which outperformed Madagascar.
Hand-held
(in thousands)
March 31,
2006
% of
Publishing
Net Revenues
March 31,
2005
% of
Publishing
Net Revenues
Increase/
(Decrease)
Percent
Change
$158,861 14% $138,695 13% $20,166 15%
Net revenues from sales of titles for the hand-held for the year ended March 31, 2006 increased
15% from the prior fiscal year, from $138.7 million to $158.9 million. Additionally, hand-held net
revenues as a percentage of publishing net revenues increased from 13% for the year ended March
31, 2005 to 14% for the year ended March 31, 2006. The increases were due to the worldwide intro-
ductions of the NDS and PSP hand-held platforms in late fiscal 2005 and the continued growth
of their installed base throughout fiscal 2006, which resulted in hand-held titles being sold across
more platforms. In addition, compared to the other hand-held platforms, titles for the PSP have a
higher retail pricing point of $49.99. The major titles driving hand-held net revenues in fiscal 2006
were Madagascar, Madagascar: Operation Penguin, Fantastic Four, Ultimate Spider-Man, and Shrek SuperSlam
for the GBA; Madagascar, Ultimate Spider-Man, Tony Hawk’s American Sk8land, and Shrek SuperSlam for
the NDS; and THUG 2, Spider-Man 2, X-Men Legends II, and LucasArts’ Star Wars Battlefront II for the PSP.
This compares to fiscal 2005 where the main titles driving hand-held net revenues were Shrek 2,
Spider-Man 2, and DreamWorks’ Shark Tale for the GBA; Spider-Man 2 for the NDS; and THUG 2 and
Spider-Man 2 for the PSP.