Operating Segments and Geographic Region (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of operating segments and reconciliations of total net revenues and total segment operating income to consolidated net revenues from external customers and consolidated income before income tax expense

Information on reportable segment net revenues and operating income for the three months ended June 30, 2020 and 2019, are presented below (amounts in millions):

	Three Months Ended June 30, 2020
	Activision		Blizzard		King		Total
Segment Net Revenues
Net revenues from external customers	$	993	$	433	$	553	$	1,979
Intersegment net revenues (1)	—		28		—		28
Segment net revenues	$	993	$	461	$	553	$	2,007
Segment operating income	$	559	$	203	$	212	$	974
	Three Months Ended June 30, 2019
	Activision		Blizzard		King		Total
Segment Net Revenues
Net revenues from external customers	$	268	$	381	$	499	$	1,148
Intersegment net revenues (1)	—		3		—		3
Segment net revenues	$	268	$	384	$	499	$	1,151
Segment operating income	$	55	$	75	$	171	$	301

Information on reportable segment net revenues and operating income for the six months ended June 30, 2020 and 2019, are presented below (amounts in millions):

	Six Months Ended June 30, 2020
	Activision		Blizzard		King		Total
Segment Net Revenues
Net revenues from external customers	$	1,512	$	870	$	1,051	$	3,433
Intersegment net revenues (1)	—		44		—		44
Segment net revenues	$	1,512	$	914	$	1,051	$	3,477
Segment operating income	$	743	$	400	$	367	$	1,510
	Six Months Ended June 30, 2019
	Activision		Blizzard		King		Total
Segment Net Revenues
Net revenues from external customers	$	585	$	720	$	1,028	$	2,333
Intersegment net revenues (1)	—		8		—		8
Segment net revenues	$	585	$	728	$	1,028	$	2,341
Segment operating income	$	128	$	130	$	349	$	607

(1) Intersegment revenues reflect licensing and service fees charged between segments.

Reconciliations of total segment net revenues and total segment operating income to consolidated net revenues and consolidated income before income tax expense are presented in the table below (amounts in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Reconciliation to consolidated net revenues:
Segment net revenues	$	2,007	$	1,151	$	3,477	$	2,341
Revenues from non-reportable segments (1)	99		59		167		132
Net effect from recognition (deferral) of deferred net revenues (2)	(146)		189		119		755
Elimination of intersegment revenues (3)	(28)		(3)		(44)		(8)
Consolidated net revenues	$	1,932	$	1,396	$	3,719	$	3,220
Reconciliation to consolidated income before income tax expense:
Segment operating income	$	974	$	301	$	1,510	$	607
Operating income (loss) from non-reportable segments (1)	(11)		7		(7)		4
Net effect from recognition (deferral) of deferred net revenues and related cost of revenues (2)	(152)		135		19		576
Share-based compensation expense	(42)		(38)		(85)		(100)
Amortization of intangible assets	(14)		(47)		(47)		(102)
Restructuring and related costs (4)	(6)		(22)		(29)		(79)
Consolidated operating income	749		336		1,361		906
Interest and other expense (income), net	22		(34)		30		(31)
Consolidated income before income tax expense	$	727	$	370	$	1,331	$	937

(1)Includes other income and expenses from operating segments managed outside the reportable segments, including our Distribution business. Also includes unallocated corporate income and expenses.

(2)Reflects the net effect from recognition (deferral) of deferred net revenues, along with related cost of revenues, on certain of our online-enabled products.

(3)Intersegment revenues reflect licensing and service fees charged between segments.

(4)Reflects restructuring initiatives, which include severance and other restructuring-related costs.

Schedule of net revenues by distribution channels

Net revenues by distribution channel, including a reconciliation to each of our reportable segment’s revenues, for the three months ended June 30, 2020 and 2019, were as follows (amounts in millions):

	Three Months Ended June 30, 2020
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	680	$	390	$	549	$	—	$	(28)	$	1,591
Retail channels	163		5		—		—		—		168
Other (2)	27		45		—		101		—		173
Total consolidated net revenues	$	870	$	440	$	549	$	101	$	(28)	$	1,932
Change in deferred revenues:
Digital online channels (1)	$	206	$	20	$	4	$	—	$	—	$	230
Retail channels	(83)		1		—		—		—		(82)
Other (2)	—		—		—		(2)		—		(2)
Total change in deferred revenues	$	123	$	21	$	4	$	(2)	$	—	$	146
Segment net revenues:
Digital online channels (1)	$	886	$	410	$	553	$	—	$	(28)	$	1,821
Retail channels	80		6		—		—		—		86
Other (2)	27		45		—		99		—		171
Total segment net revenues	$	993	$	461	$	553	$	99	$	(28)	$	2,078

	Three Months Ended June 30, 2019
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	248	$	342	$	499	$	—	$	(3)	$	1,086
Retail channels	180		13		—		—		—		193
Other (2)	—		56		—		61		—		117
Total consolidated net revenues	$	428	$	411	$	499	$	61	$	(3)	$	1,396
Change in deferred revenues:
Digital online channels (1)	$	(51)	$	(25)	$	—	$	—	$	—	$	(76)
Retail channels	(109)		(3)		—		—		—		(112)
Other (2)	—		1		—		(2)		—		(1)
Total change in deferred revenues	$	(160)	$	(27)	$	—	$	(2)	$	—	$	(189)
Segment net revenues:
Digital online channels (1)	$	197	$	317	$	499	$	—	$	(3)	$	1,010
Retail channels	71		10		—		—		—		81
Other (2)	—		57		—		59		—		116
Total segment net revenues	$	268	$	384	$	499	$	59	$	(3)	$	1,207

Net revenues by distribution channel, including a reconciliation to each of our reportable segment’s revenues, for the six months ended June 30, 2020 and 2019, were as follows (amounts in millions):

	Six Months Ended June 30, 2020
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	1,228	$	798	$	1,048	$	—	$	(44)	$	3,030
Retail channels	375		15		—		—		—		390
Other (2)	47		76		—		176		—		299
Total consolidated net revenues	$	1,650	$	889	$	1,048	$	176	$	(44)	$	3,719
Change in deferred revenues:
Digital online channels (1)	$	114	$	29	$	3	$	—	$	—	$	146
Retail channels	(252)		(3)		—		—		—		(255)
Other (2)	—		(1)		—		(9)		—		(10)
Total change in deferred revenues	$	(138)	$	25	$	3	$	(9)	$	—	$	(119)
Segment net revenues:
Digital online channels (1)	$	1,342	$	827	$	1,051	$	—	$	(44)	$	3,176
Retail channels	123		12		—		—		—		135
Other (2)	47		75		—		167		—		289
Total segment net revenues	$	1,512	$	914	$	1,051	$	167	$	(44)	$	3,600

	Six Months Ended June 30, 2019
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	714	$	748	$	1,025	$	—	$	(8)	$	2,479
Retail channels	476		29		—		—		—		505
Other (2)	—		95		—		141		—		236
Total consolidated net revenues	$	1,190	$	872	$	1,025	$	141	$	(8)	$	3,220
Change in deferred revenues:
Digital online channels (1)	$	(268)	$	(139)	$	3	$	—	$	—	$	(404)
Retail channels	(337)		(7)		—		—		—		(344)
Other (2)	—		2		—		(9)		—		(7)
Total change in deferred revenues	$	(605)	$	(144)	$	3	$	(9)	$	—	$	(755)
Segment net revenues:
Digital online channels (1)	$	446	$	609	$	1,028	$	—	$	(8)	$	2,075
Retail channels	139		22		—		—		—		161
Other (2)	—		97		—		132		—		229
Total segment net revenues	$	585	$	728	$	1,028	$	132	$	(8)	$	2,465

(1) Net revenues from “Digital online channels” include revenues from digitally-distributed subscriptions, downloadable content, microtransactions, and products, as well as licensing royalties.

(2) Net revenues from “Other” include revenues from our Distribution business, the Overwatch League, and the Call of Duty League.

(3) Intersegment revenues reflect licensing and service fees charged between segments.

Schedule of net revenues by geographic region

Geographic information presented below is based on the location of the paying customer. Net revenues by geographic region, including a reconciliation to each of our reportable segment’s net revenues, for the three months ended June 30, 2020 and 2019, were as follows (amounts in millions):

	Three Months Ended June 30, 2020
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	548	$	216	$	362	$	—	$	(14)	$	1,112
EMEA (1)	248		141		135		101		(10)		615
Asia Pacific	74		83		52		—		(4)		205
Total consolidated net revenues	$	870	$	440	$	549	$	101	$	(28)	$	1,932
Change in deferred revenues:
Americas	$	100	$	19	$	5	$	—	$	—	$	124
EMEA (1)	17		1		—		(2)		—		16
Asia Pacific	6		1		(1)		—		—		6
Total change in deferred revenues	$	123	$	21	$	4	$	(2)	$	—	$	146
Segment net revenues:
Americas	$	648	$	235	$	367	$	—	$	(14)	$	1,236
EMEA (1)	265		142		135		99		(10)		631
Asia Pacific	80		84		51		—		(4)		211
Total segment net revenues	$	993	$	461	$	553	$	99	$	(28)	$	2,078

	Three Months Ended June 30, 2019
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	255	$	202	$	309	$	—	$	(2)	$	764
EMEA (1)	135		127		137		61		(1)		459
Asia Pacific	38		82		53		—		—		173
Total consolidated net revenues	$	428	$	411	$	499	$	61	$	(3)	$	1,396
Change in deferred revenues:
Americas	$	(105)	$	(15)	$	(1)	$	—	$	1	$	(120)
EMEA (1)	(42)		(13)		—		(2)		(1)		(58)
Asia Pacific	(13)		1		1		—		—		(11)
Total change in deferred revenues	$	(160)	$	(27)	$	—	$	(2)	$	—	$	(189)
Segment net revenues:
Americas	$	150	$	187	$	308	$	—	$	(1)	$	644
EMEA (1)	93		114		137		59		(2)		401
Asia Pacific	25		83		54		—		—		162
Total segment net revenues	$	268	$	384	$	499	$	59	$	(3)	$	1,207

Net revenues by geographic region, including a reconciliation to each of our reportable segment’s net revenues, for the six months ended June 30, 2020 and 2019, were as follows (amounts in millions):

	Six Months Ended June 30, 2020
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	1,020	$	387	$	674	$	—	$	(21)	$	2,060
EMEA (1)	487		262		271		176		(15)		1,181
Asia Pacific	143		240		103		—		(8)		478
Total consolidated net revenues	$	1,650	$	889	$	1,048	$	176	$	(44)	$	3,719
Change in deferred revenues:
Americas	$	(46)	$	22	$	5	$	—	$	—	$	(19)
EMEA (1)	(79)		5		(2)		(9)		—		(85)
Asia Pacific	(13)		(2)		—		—		—		(15)
Total change in deferred revenues	$	(138)	$	25	$	3	$	(9)	$	—	$	(119)
Segment net revenues:
Americas	$	974	$	409	$	679	$	—	$	(21)	$	2,041
EMEA (1)	408		267		269		167		(15)		1,096
Asia Pacific	130		238		103		—		(8)		463
Total segment net revenues	$	1,512	$	914	$	1,051	$	167	$	(44)	$	3,600

	Six Months Ended June 30, 2019
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	712	$	409	$	634	$	—	$	(4)	$	1,751
EMEA (1)	378		276		281		141		(3)		1,073
Asia Pacific	100		187		110		—		(1)		396
Total consolidated net revenues	$	1,190	$	872	$	1,025	$	141	$	(8)	$	3,220
Change in deferred revenues:
Americas	$	(371)	$	(70)	$	4	$	—	$	—	$	(437)
EMEA (1)	(189)		(61)		—		(9)		—		(259)
Asia Pacific	(45)		(13)		(1)		—		—		(59)
Total change in deferred revenues	$	(605)	$	(144)	$	3	$	(9)	$	—	$	(755)
Segment net revenues:
Americas	$	341	$	339	$	638	$	—	$	(4)	$	1,314
EMEA (1)	189		215		281		132		(3)		814
Asia Pacific	55		174		109		—		(1)		337
Total segment net revenues	$	585	$	728	$	1,028	$	132	$	(8)	$	2,465

(1) “EMEA” consists of the Europe, Middle East, and Africa geographic regions.

(2) Intersegment revenues reflect licensing and service fees charged between segments.

Schedule of net revenues by platform

Net revenues by platform, including a reconciliation to each of our reportable segment’s net revenues, for the three months ended June 30, 2020 and 2019, were as follows (amounts in millions):

	Three Months Ended June 30, 2020
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	623	$	32	$	—	$	—	$	—	$	655
PC	146		339		25		—		(28)		482
Mobile and ancillary (1)	74		24		524		—		—		622
Other (2)	27		45		—		101		—		173
Total consolidated net revenues	$	870	$	440	$	549	$	101	$	(28)	$	1,932
Change in deferred revenues:
Console	$	53	$	5	$	—	$	—	$	—	$	58
PC	21		15		1		—		—		37
Mobile and ancillary (1)	49		1		3		—		—		53
Other (2)	—		—		—		(2)		—		(2)
Total change in deferred revenues	$	123	$	21	$	4	$	(2)	$	—	$	146
Segment net revenues:
Console	$	676	$	37	$	—	$	—	$	—	$	713
PC	167		354		26		—		(28)		519
Mobile and ancillary (1)	123		25		527		—		—		675
Other (2)	27		45		—		99		—		171
Total segment net revenues	$	993	$	461	$	553	$	99	$	(28)	$	2,078

	Three Months Ended June 30, 2019
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	374	$	33	$	—	$	—	$	—	$	407
PC	51		282		31		—		(3)		361
Mobile and ancillary (1)	3		40		468		—		—		511
Other (2)	—		56		—		61		—		117
Total consolidated net revenues	$	428	$	411	$	499	$	61	$	(3)	$	1,396
Change in deferred revenues:
Console	$	(141)	$	(5)	$	—	$	—	$	—	$	(146)
PC	(19)		(31)		—		—		—		(50)
Mobile and ancillary (1)	—		8		—		—		—		8
Other (2)	—		1		—		(2)		—		(1)
Total change in deferred revenues	$	(160)	$	(27)	$	—	$	(2)	$	—	$	(189)
Segment net revenues:
Console	$	233	$	28	$	—	$	—	$	—	$	261
PC	32		251		31		—		(3)		311
Mobile and ancillary (1)	3		48		468		—		—		519
Other (2)	—		57		—		59		—		116
Total segment net revenues	$	268	$	384	$	499	$	59	$	(3)	$	1,207

Net revenues by platform, including a reconciliation to each of our reportable segment’s net revenues, for the six months ended June 30, 2020 and 2019, were as follows (amounts in millions):

	Six Months Ended June 30, 2020
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	1,190	$	59	$	—	$	—	$	—	$	1,249
PC	273		702		50		—		(44)		981
Mobile and ancillary (1)	140		52		998		—		—		1,190
Other (2)	47		76		—		176		—		299
Total consolidated net revenues	$	1,650	$	889	$	1,048	$	176	$	(44)	$	3,719
Change in deferred revenues:
Console	$	(169)	$	(3)	$	—	$	—	$	—	$	(172)
PC	(17)		34		—		—		—		17
Mobile and ancillary (1)	48		(5)		3		—		—		46
Other (2)	—		(1)		—		(9)		—		(10)
Total change in deferred revenues	$	(138)	$	25	$	3	$	(9)	$	—	$	(119)
Segment net revenues:
Console	$	1,021	$	56	$	—	$	—	$	—	$	1,077
PC	256		736		50		—		(44)		998
Mobile and ancillary (1)	188		47		1,001		—		—		1,236
Other (2)	47		75		—		167		—		289
Total segment net revenues	$	1,512	$	914	$	1,051	$	167	$	(44)	$	3,600

	Six Months Ended June 30, 2019
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	1,008	$	75	$	—	$	—	$	—	$	1,083
PC	176		623		64		—		(8)		855
Mobile and ancillary (1)	6		79		961		—		—		1,046
Other (2)	—		95		—		141		—		236
Total consolidated net revenues	$	1,190	$	872	$	1,025	$	141	$	(8)	$	3,220
Change in deferred revenues:
Console	$	(527)	$	(17)	$	—	$	—	$	—	$	(544)
PC	(77)		(120)		1		—		—		(196)
Mobile and ancillary (1)	(1)		(9)		2		—		—		(8)
Other (2)	—		2		—		(9)		—		(7)
Total change in deferred revenues	$	(605)	$	(144)	$	3	$	(9)	$	—	$	(755)
Segment net revenues:
Console	$	481	$	58	$	—	$	—	$	—	$	539
PC	99		503		65		—		(8)		659
Mobile and ancillary (1)	5		70		963		—		—		1,038
Other (2)	—		97		—		132		—		229
Total segment net revenues	$	585	$	728	$	1,028	$	132	$	(8)	$	2,465

(1) Net revenues from “Mobile and ancillary” include revenues from mobile devices, as well as non-platform specific game-related revenues, such as standalone sales of physical merchandise and accessories.

(2) Net revenues from “Other” include revenues from our Distribution business, the Overwatch League, and the Call of Duty League.

(3) Intersegment revenues reflect licensing and service fees charged between segments.

Long-lived assets by geographic region

Long-lived assets by geographic region were as follows (amounts in millions):

	At June 30, 2020		At December 31, 2019
Long-lived assets (1) by geographic region:
Americas	$	291	$	322
EMEA	127		142
Asia Pacific	16		21
Total long-lived assets by geographic region	$	434	$	485

(1) The only long-lived assets that we classify by region are our long-term tangible fixed assets, which consist of property, plant, and equipment assets, and our lease right-of-use assets; all other long-term assets are not allocated by location.