Operating Segments and Geographic Regions (Tables)

3 Months Ended

Mar. 31, 2023

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 are presented below (amounts in millions):

	Three Months Ended March 31, 2023
	Activision		Blizzard		King		Total
Segment Revenues
Net revenues from external customers	$	580	$	435	$	739	$	1,754
Intersegment net revenues (1)	—		8		—		8
Segment net revenues	$	580	$	443	$	739	$	1,762
Segment operating income	$	179	$	56	$	241	$	476
	Three Months Ended March 31, 2022
	Activision		Blizzard		King		Total
Segment Revenues
Net revenues from external customers	$	453	$	265	$	682	$	1,400
Intersegment net revenues (1)	—		9		—		9
Segment net revenues	$	453	$	274	$	682	$	1,409
Segment operating income	$	59	$	53	$	243	$	355

(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 March 31,
	2023		2022
Reconciliation to consolidated net revenues:
Segment net revenues	$	1,762	$	1,409
Revenues from non-reportable segments (1)	101		81
Net effect from recognition (deferral) of deferred net revenues (2)	528		287
Elimination of intersegment revenues (3)	(8)		(9)
Consolidated net revenues	$	2,383	$	1,768
Reconciliation to consolidated income before income tax expense:
Segment operating income	$	476	$	355
Operating income (loss) from non-reportable segments (1)	6		19
Net effect from recognition (deferral) of deferred net revenues and related cost of revenues (2)	471		235
Share-based compensation expense (4)	(124)		(98)
Amortization of intangible assets (5)	(4)		(2)
Restructuring and related costs (6)	—		2
Partnership wind down and related costs (7)	(4)		—
Merger and acquisition-related fees and other expenses (8)	(21)		(32)
Consolidated operating income	800		479
Interest expense from debt	27		27
Other (income) expense, net	(122)		(13)
Consolidated income before income tax expense	$	895	$	465

(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)Reflects expenses related to share-based compensation.

(5)Reflects amortization of intangible assets from purchase price accounting.

(6)Reflects restructuring initiatives.

(7)Reflects expenses related to the wind down of our partnership with NetEase, Inc. in Mainland China in regards to licenses covering the publication of several Blizzard titles which expired in January 2023.

(8)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, were as follows (amounts in millions):

	Three Months Ended March 31, 2023
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	902	$	525	$	738	$	—	$	(8)	$	2,157
Retail channels	102		2		—		—		—		104
Other (2)	6		4		—		112		—		122
Total consolidated net revenues	$	1,010	$	531	$	738	$	112	$	(8)	$	2,383
Change in deferred revenues:
Digital online channels (1)	$	(362)	$	(87)	$	1	$	—	$	—	$	(448)
Retail channels	(68)		(1)		—		—		—		(69)
Other (2)	—		—		—		(11)		—		(11)
Total change in deferred revenues	$	(430)	$	(88)	$	1	$	(11)	$	—	$	(528)
Segment net revenues:
Digital online channels (1)	$	540	$	438	$	739	$	—	$	(8)	$	1,709
Retail channels	34		1		—		—		—		35
Other (2)	6		4		—		101		—		111
Total segment net revenues	$	580	$	443	$	739	$	101	$	(8)	$	1,855

	Three Months Ended March 31, 2022
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by distribution channel:
Digital online channels (1)	$	616	$	300	$	682	$	—	$	(9)	$	1,589
Retail channels	83		2		—		—		—		85
Other (2)	11		2		—		81		—		94
Total consolidated net revenues	$	710	$	304	$	682	$	81	$	(9)	$	1,768
Change in deferred revenues:
Digital online channels (1)	$	(192)	$	(30)	$	—	$	—	$	—	$	(222)
Retail channels	(65)		1		—		—		—		(64)
Other (2)	—		(1)		—		—		—		(1)
Total change in deferred revenues	$	(257)	$	(30)	$	—	$	—	$	—	$	(287)
Segment net revenues:
Digital online channels (1)	$	424	$	270	$	682	$	—	$	(9)	$	1,367
Retail channels	18		3		—		—		—		21
Other (2)	11		1		—		81		—		93
Total segment net revenues	$	453	$	274	$	682	$	81	$	(9)	$	1,481

(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, were as follows (amounts in millions):

	Three Months Ended March 31, 2023
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	652	$	257	$	473	$	1	$	(5)	$	1,378
EMEA (1)	256		153		181		111		(2)		699
Asia Pacific	102		121		84		—		(1)		306
Total consolidated net revenues	$	1,010	$	531	$	738	$	112	$	(8)	$	2,383
Change in deferred revenues:
Americas	$	(280)	$	(44)	$	1	$	—	$	—	$	(323)
EMEA (1)	(125)		(28)		—		(11)		—		(164)
Asia Pacific	(25)		(16)		—		—		—		(41)
Total change in deferred revenues	$	(430)	$	(88)	$	1	$	(11)	$	—	$	(528)
Segment net revenues:
Americas	$	372	$	213	$	474	$	1	$	(5)	$	1,055
EMEA (1)	131		125		181		100		(2)		535
Asia Pacific	77		105		84		—		(1)		265
Total segment net revenues	$	580	$	443	$	739	$	101	$	(8)	$	1,855

	Three Months Ended March 31, 2022
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (2)		Total
Net revenues by geographic region:
Americas	$	460	$	125	$	437	$	—	$	(6)	$	1,016
EMEA (1)	184		94		170		81		(2)		527
Asia Pacific	66		85		75		—		(1)		225
Total consolidated net revenues	$	710	$	304	$	682	$	81	$	(9)	$	1,768
Change in deferred revenues:
Americas	$	(164)	$	(11)	$	1	$	—	$	—	$	(174)
EMEA (1)	(80)		(13)		—		—		—		(93)
Asia Pacific	(13)		(6)		(1)		—		—		(20)
Total change in deferred revenues	$	(257)	$	(30)	$	—	$	—	$	—	$	(287)
Segment net revenues:
Americas	$	296	$	114	$	438	$	—	$	(6)	$	842
EMEA (1)	104		81		170		81		(2)		434
Asia Pacific	53		79		74		—		(1)		205
Total segment net revenues	$	453	$	274	$	682	$	81	$	(9)	$	1,481

(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, were as follows (amounts in millions):

	Three Months Ended March 31, 2023
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	597	$	42	$	—	$	—	$	—	$	639
PC	270		386		18		—		(8)		666
Mobile and ancillary (1)	137		99		720		—		—		956
Other (2)	6		4		—		112		—		122
Total consolidated net revenues	$	1,010	$	531	$	738	$	112	$	(8)	$	2,383
Change in deferred revenues:
Console	$	(278)	$	(4)	$	—	$	—	$	—	$	(282)
PC	(151)		(52)		—		—		—		(203)
Mobile and ancillary (1)	(1)		(32)		1		—		—		(32)
Other (2)	—		—		—		(11)		—		(11)
Total change in deferred revenues	$	(430)	$	(88)	$	1	$	(11)	$	—	$	(528)
Segment net revenues:
Console	$	319	$	38	$	—	$	—	$	—	$	357
PC	119		334		18		—		(8)		463
Mobile and ancillary (1)	136		67		721		—		—		924
Other (2)	6		4		—		101		—		111
Total segment net revenues	$	580	$	443	$	739	$	101	$	(8)	$	1,855

	Three Months Ended March 31, 2022
	Activision		Blizzard		King		Non-reportable segments		Elimination of intersegment revenues (3)		Total
Net revenues by platform:
Console	$	460	$	24	$	—	$	—	$	—	$	484
PC	124		251		17		—		(9)		383
Mobile and ancillary (1)	115		27		665		—		—		807
Other (2)	11		2		—		81		—		94
Total consolidated net revenues	$	710	$	304	$	682	$	81	$	(9)	$	1,768
Change in deferred revenues:
Console	$	(216)	$	(5)	$	—	$	—	$	—	$	(221)
PC	(62)		(18)		—		—		—		(80)
Mobile and ancillary (1)	21		(6)		—		—		—		15
Other (2)	—		(1)		—		—		—		(1)
Total change in deferred revenues	$	(257)	$	(30)	$	—	$	—	$	—	$	(287)
Segment net revenues:
Console	$	244	$	19	$	—	$	—	$	—	$	263
PC	62		233		17		—		(9)		303
Mobile and ancillary (1)	136		21		665		—		—		822
Other (2)	11		1		—		81		—		93
Total segment net revenues	$	453	$	274	$	682	$	81	$	(9)	$	1,481

(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 March 31, 2023		At December 31, 2022
Long-lived assets* by geographic region:
Americas	$	289	$	279
EMEA	102		103
Asia Pacific	21		21
Total long-lived assets by geographic region	$	412	$	403

*    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.