Operating Segments and Geographic Regions (Tables)

9 Months Ended

Sep. 30, 2022

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 September 30, 2022 and 2021, are presented below (amounts in millions):

	Three Months Ended September 30, 2022
	Activision		Blizzard		King		Total
Segment Revenues
Net revenues from external customers	$	480	$	534	$	692	$	1,706
Intersegment net revenues (1)	—		9		—		9
Segment net revenues	$	480	$	543	$	692	$	1,715
Segment operating income	$	153	$	166	$	297	$	616
	Three Months Ended September 30, 2021
	Activision		Blizzard		King		Total
Segment Revenues
Net revenues from external customers	$	641	$	478	$	652	$	1,771
Intersegment net revenues (1)	—		15		—		15
Segment net revenues	$	641	$	493	$	652	$	1,786
Segment operating income	$	244	$	188	$	303	$	735

Information on reportable segment net revenues and operating income for the nine months ended September 30, 2022 and 2021, are presented below (amounts in millions):

	Nine Months Ended September 30, 2022
	Activision		Blizzard		King		Total
Segment Revenues
Net revenues from external customers	$	1,423	$	1,189	$	2,058	$	4,670
Intersegment net revenues (1)	—		29		—		29
Segment net revenues	$	1,423	$	1,218	$	2,058	$	4,699
Segment operating income	$	304	$	314	$	811	$	1,429
	Nine Months Ended September 30, 2021
	Activision		Blizzard		King		Total
Segment Revenues
Net revenues from external customers	$	2,321	$	1,347	$	1,896	$	5,564
Intersegment net revenues (1)	—		62		—		62
Segment net revenues	$	2,321	$	1,409	$	1,896	$	5,626
Segment operating income	$	1,049	$	537	$	755	$	2,341

(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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Reconciliation to consolidated net revenues:
Segment net revenues	$	1,715	$	1,786	$	4,699	$	5,626
Revenues from non-reportable segments (1)	123		109		278		303
Net effect from recognition (deferral) of deferred net revenues (2)	(47)		190		246		773
Elimination of intersegment revenues (3)	(9)		(15)		(29)		(62)
Consolidated net revenues	$	1,782	$	2,070	$	5,194	$	6,640
Reconciliation to consolidated income before income tax expense:
Segment operating income	$	616	$	735	$	1,429	$	2,341
Operating income (loss) from non-reportable segments (1)	14		4		28		(12)
Net effect from recognition (deferral) of deferred net revenues and related cost of revenues (2)	(25)		154		210		562
Share-based compensation expense (4)	(102)		(64)		(301)		(259)
Amortization of intangible assets	(6)		(2)		(9)		(8)
Restructuring and related costs	(2)		(3)		3		(46)
Merger and acquisition-related fees and other expenses (5)	(10)		—		(58)		—
Consolidated operating income	485		824		1,302		2,578
Interest and other (income) expense, net	(15)		65		16		52
Consolidated income before income tax expense	$	500	$	759	$	1,286	$	2,526

(1)Includes other income and expenses outside of our reportable segments, including our Distribution business and 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)Expenses related to share-based compensation, including $25 million and $54 million for the three and nine months ended September 30, 2022, respectively, related to liability awards accounted for under ASC 718.

(5)Reflects fees and other expenses related to our proposed transaction with Microsoft, which primarily consist of legal and advisory fees.

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 September 30, 2022 and 2021, were as follows (amounts in millions):

	Three Months Ended September 30, 2022
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	501	$	421	$	693	$	—	$	(9)	$	1,606
Retail channels	23		2		—		—		—		25
Other (2)	9		24		—		118		—		151
Total consolidated net revenues	$	533	$	447	$	693	$	118	$	(9)	$	1,782
Change in deferred revenues:
Digital online channels (1)	$	(36)	$	96	$	(1)	$	—	$	—	$	59
Retail channels	(17)		—		—		—		—		(17)
Other (2)	—		—		—		5		—		5
Total change in deferred revenues	$	(53)	$	96	$	(1)	$	5	$	—	$	47
Segment net revenues:
Digital online channels (1)	$	465	$	517	$	692	$	—	$	(9)	$	1,665
Retail channels	6		2		—		—		—		8
Other (2)	9		24		—		123		—		156
Total segment net revenues	$	480	$	543	$	692	$	123	$	(9)	$	1,829

	Three Months Ended September 30, 2021
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	723	$	493	$	651	$	—	$	(15)	$	1,852
Retail channels	63		6		—		—		—		69
Other (2)	8		33		—		108		—		149
Total consolidated net revenues	$	794	$	532	$	651	$	108	$	(15)	$	2,070
Change in deferred revenues:
Digital online channels (1)	$	(128)	$	(37)	$	1	$	—	$	—	$	(164)
Retail channels	(25)		(2)		—		—		—		(27)
Other (2)	—		—		—		1		—		1
Total change in deferred revenues	$	(153)	$	(39)	$	1	$	1	$	—	$	(190)
Segment net revenues:
Digital online channels (1)	$	595	$	456	$	652	$	—	$	(15)	$	1,688
Retail channels	38		4		—		—		—		42
Other (2)	8		33		—		109		—		150
Total segment net revenues	$	641	$	493	$	652	$	109	$	(15)	$	1,880

Net revenues by distribution channel, including a reconciliation to each of our reportable segment’s revenues, for the nine months ended September 30, 2022 and 2021, were as follows (amounts in millions):

	Nine Months Ended September 30, 2022
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	1,643	$	994	$	2,060	$	—	$	(29)	$	4,668
Retail channels	170		7		—		—		—		177
Other (2)	31		47		—		271		—		349
Total consolidated net revenues	$	1,844	$	1,048	$	2,060	$	271	$	(29)	$	5,194
Change in deferred revenues:
Digital online channels (1)	$	(286)	$	171	$	(2)	$	—	$	—	$	(117)
Retail channels	(135)		—		—		—		—		(135)
Other (2)	—		(1)		—		7		—		6
Total change in deferred revenues	$	(421)	$	170	$	(2)	$	7	$	—	$	(246)
Segment net revenues:
Digital online channels (1)	$	1,357	$	1,165	$	2,058	$	—	$	(29)	$	4,551
Retail channels	35		7		—		—		—		42
Other (2)	31		46		—		278		—		355
Total segment net revenues	$	1,423	$	1,218	$	2,058	$	278	$	(29)	$	4,948

	Nine Months Ended September 30, 2021
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	2,625	$	1,426	$	1,894	$	—	$	(62)	$	5,883
Retail channels	334		20		—		—		—		354
Other (2)	38		71		—		294		—		403
Total consolidated net revenues	$	2,997	$	1,517	$	1,894	$	294	$	(62)	$	6,640
Change in deferred revenues:
Digital online channels (1)	$	(491)	$	(101)	$	2	$	—	$	—	$	(590)
Retail channels	(185)		(7)		—		—		—		(192)
Other (2)	—		—		—		9		—		9
Total change in deferred revenues	$	(676)	$	(108)	$	2	$	9	$	—	$	(773)
Segment net revenues:
Digital online channels (1)	$	2,134	$	1,325	$	1,896	$	—	$	(62)	$	5,293
Retail channels	149		13		—		—		—		162
Other (2)	38		71		—		303		—		412
Total segment net revenues	$	2,321	$	1,409	$	1,896	$	303	$	(62)	$	5,867

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

(2)Net revenues from “Other” primarily 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 from External Customers 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 September 30, 2022 and 2021, were as follows (amounts in millions):

	Three Months Ended September 30, 2022
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	358	$	190	$	457	$	—	$	(6)	$	999
EMEA (1)	117		107		158		118		(2)		498
Asia Pacific	58		150		78		—		(1)		285
Total consolidated net revenues	$	533	$	447	$	693	$	118	$	(9)	$	1,782
Change in deferred revenues:
Americas	$	(33)	$	42	$	—	$	—	$	—	$	9
EMEA (1)	(17)		18		—		5		—		6
Asia Pacific	(3)		36		(1)		—		—		32
Total change in deferred revenues	$	(53)	$	96	$	(1)	$	5	$	—	$	47
Segment net revenues:
Americas	$	325	$	232	$	457	$	—	$	(6)	$	1,008
EMEA (1)	100		125		158		123		(2)		504
Asia Pacific	55		186		77		—		(1)		317
Total segment net revenues	$	480	$	543	$	692	$	123	$	(9)	$	1,829

	Three Months Ended September 30, 2021
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	515	$	243	$	417	$	—	$	(9)	$	1,166
EMEA (1)	187		166		163		108		(5)		619
Asia Pacific	92		123		71		—		(1)		285
Total consolidated net revenues	$	794	$	532	$	651	$	108	$	(15)	$	2,070
Change in deferred revenues:
Americas	$	(110)	$	(27)	$	1	$	—	$	—	$	(136)
EMEA (1)	(42)		(22)		—		1		—		(63)
Asia Pacific	(1)		10		—		—		—		9
Total change in deferred revenues	$	(153)	$	(39)	$	1	$	1	$	—	$	(190)
Segment net revenues:
Americas	$	405	$	216	$	418	$	—	$	(9)	$	1,030
EMEA (1)	145		144		163		109		(5)		556
Asia Pacific	91		133		71		—		(1)		294
Total segment net revenues	$	641	$	493	$	652	$	109	$	(15)	$	1,880

Net revenues by geographic region, including a reconciliation to each of our reportable segment’s net revenues, for the nine months ended September 30, 2022 and 2021, were as follows (amounts in millions):

	Nine Months Ended September 30, 2022
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	1,214	$	463	$	1,341	$	—	$	(19)	$	2,999
EMEA (1)	448		291		491		271		(8)		1,493
Asia Pacific	182		294		228		—		(2)		702
Total consolidated net revenues	$	1,844	$	1,048	$	2,060	$	271	$	(29)	$	5,194
Change in deferred revenues:
Americas	$	(258)	$	82	$	(2)	$	—	$	—	$	(178)
EMEA (1)	(141)		30		(1)		7		—		(105)
Asia Pacific	(22)		58		1		—		—		37
Total change in deferred revenues	$	(421)	$	170	$	(2)	$	7	$	—	$	(246)
Segment net revenues:
Americas	$	956	$	545	$	1,339	$	—	$	(19)	$	2,821
EMEA (1)	307		321		490		278		(8)		1,388
Asia Pacific	160		352		229		—		(2)		739
Total segment net revenues	$	1,423	$	1,218	$	2,058	$	278	$	(29)	$	4,948

	Nine Months Ended September 30, 2021
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	1,942	$	698	$	1,215	$	—	$	(36)	$	3,819
EMEA (1)	780		507		485		294		(21)		2,045
Asia Pacific	275		312		194		—		(5)		776
Total consolidated net revenues	$	2,997	$	1,517	$	1,894	$	294	$	(62)	$	6,640
Change in deferred revenues:
Americas	$	(420)	$	(57)	$	2	$	—	$	—	$	(475)
EMEA (1)	(213)		(55)		(1)		9		—		(260)
Asia Pacific	(43)		4		1		—		—		(38)
Total change in deferred revenues	$	(676)	$	(108)	$	2	$	9	$	—	$	(773)
Segment net revenues:
Americas	$	1,522	$	641	$	1,217	$	—	$	(36)	$	3,344
EMEA (1)	567		452		484		303		(21)		1,785
Asia Pacific	232		316		195		—		(5)		738
Total segment net revenues	$	2,321	$	1,409	$	1,896	$	303	$	(62)	$	5,867

(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 September 30, 2022 and 2021, were as follows (amounts in millions):

	Three Months Ended September 30, 2022
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	313	$	23	$	—	$	—	$	—	$	336
PC	75		279		18		—		(9)		363
Mobile and ancillary (1)	136		121		675		—		—		932
Other (2)	9		24		—		118		—		151
Total consolidated net revenues	$	533	$	447	$	693	$	118	$	(9)	$	1,782
Change in deferred revenues:
Console	$	(43)	$	(6)	$	—	$	—	$	—	$	(49)
PC	(6)		35		—		—		—		29
Mobile and ancillary (1)	(4)		67		(1)		—		—		62
Other (2)	—		—		—		5		—		5
Total change in deferred revenues	$	(53)	$	96	$	(1)	$	5	$	—	$	47
Segment net revenues:
Console	$	270	$	17	$	—	$	—	$	—	$	287
PC	69		314		18		—		(9)		392
Mobile and ancillary (1)	132		188		674		—		—		994
Other (2)	9		24		—		123		—		156
Total segment net revenues	$	480	$	543	$	692	$	123	$	(9)	$	1,829

	Three Months Ended September 30, 2021
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	480	$	43	$	—	$	—	$	—	$	523
PC	140		434		19		—		(15)		578
Mobile and ancillary (1)	166		22		632		—		—		820
Other (2)	8		33		—		108		—		149
Total consolidated net revenues	$	794	$	532	$	651	$	108	$	(15)	$	2,070
Change in deferred revenues:
Console	$	(119)	$	5	$	—	$	—	$	—	$	(114)
PC	(33)		(47)		—		—		—		(80)
Mobile and ancillary (1)	(1)		3		1		—		—		3
Other (2)	—		—		—		1		—		1
Total change in deferred revenues	$	(153)	$	(39)	$	1	$	1	$	—	$	(190)
Segment net revenues:
Console	$	361	$	48	$	—	$	—	$	—	$	409
PC	107		387		19		—		(15)		498
Mobile and ancillary (1)	165		25		633		—		—		823
Other (2)	8		33		—		109		—		150
Total segment net revenues	$	641	$	493	$	652	$	109	$	(15)	$	1,880

Net revenues by platform, including a reconciliation to each of our reportable segment’s net revenues, for the nine months ended September 30, 2022 and 2021, were as follows (amounts in millions):

	Nine Months Ended September 30, 2022
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	1,129	$	66	$	—	$	—	$	—	$	1,195
PC	297		760		52		—		(29)		1,080
Mobile and ancillary (1)	387		175		2,008		—		—		2,570
Other (2)	31		47		—		271		—		349
Total consolidated net revenues	$	1,844	$	1,048	$	2,060	$	271	$	(29)	$	5,194
Change in deferred revenues:
Console	$	(358)	$	(8)	$	—	$	—	$	—	$	(366)
PC	(84)		56		—		—		—		(28)
Mobile and ancillary (1)	21		123		(2)		—		—		142
Other (2)	—		(1)		—		7		—		6
Total change in deferred revenues	$	(421)	$	170	$	(2)	$	7	$	—	$	(246)
Segment net revenues:
Console	$	771	$	58	$	—	$	—	$	—	$	829
PC	213		816		52		—		(29)		1,052
Mobile and ancillary (1)	408		298		2,006		—		—		2,712
Other (2)	31		46		—		278		—		355
Total segment net revenues	$	1,423	$	1,218	$	2,058	$	278	$	(29)	$	4,948

	Nine Months Ended September 30, 2021
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	1,971	$	90	$	—	$	—	$	—	$	2,061
PC	532		1,293		64		—		(62)		1,827
Mobile and ancillary (1)	456		63		1,830		—		—		2,349
Other (2)	38		71		—		294		—		403
Total consolidated net revenues	$	2,997	$	1,517	$	1,894	$	294	$	(62)	$	6,640
Change in deferred revenues:
Console	$	(530)	$	—	$	—	$	—	$	—	$	(530)
PC	(145)		(108)		—		—		—		(253)
Mobile and ancillary (1)	(1)		—		2		—		—		1
Other (2)	—		—		—		9		—		9
Total change in deferred revenues	$	(676)	$	(108)	$	2	$	9	$	—	$	(773)
Segment net revenues:
Console	$	1,441	$	90	$	—	$	—	$	—	$	1,531
PC	387		1,185		64		—		(62)		1,574
Mobile and ancillary (1)	455		63		1,832		—		—		2,350
Other (2)	38		71		—		303		—		412
Total segment net revenues	$	2,321	$	1,409	$	1,896	$	303	$	(62)	$	5,867

(1)Net revenues from “Mobile and ancillary” primarily include revenues from mobile devices.

(2)Net revenues from “Other” primarily 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 September 30, 2022		At December 31, 2021
Long-lived assets* by geographic region:
Americas	$	264	$	264
EMEA	101		122
Asia Pacific	21		20
Total long-lived assets by geographic region	$	386	$	406

*    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 lease right-of-use assets. All other long-term assets are not allocated by location.