Swot Analysis

Activision Blizzard Inc (ATVI)
Financial and Strategic SWOT Analysis Review
Report Code: GDTC27021FSA

Published: September 2020
Activision Blizzard Inc (ATVI) - Financial and Strategic SWOT Analysis Review
Company Snapshot
3100 Ocean Park Blvd Phone +1 310 2552000 Revenue 7,500 (million USD)
Santa Monica, CA Fax +1 302 6365454 Net Profit 1,503 (million USD)
www.activisionblizzard.c
90405 Website Employees 9,200
om/
Technology and
United States Exchange ATVI [NASDAQ] Industry
Communications
Company Overview
Activision Blizzard Inc (Activision Blizzard) is a gaming company that develops and publishes interactive software products,
entertainment content and services for mobile devices, video game console and personal computers. The company develops film and
television content and operates esports leagues and events. Activision Blizzard’s major product franchises include Candy Crush, Call
of Duty, Hearthstone, Skylanders, World of Warcraft, and Diablo. It also provides sales distribution, warehousing and logistics services
to manufacturers of interactive entertainment hardware and third-party publishers of interactive entertainment software.
Key Executives SWOT Analysis
Name Title Activision Blizzard Inc, SWOT Analysis
Brian G. Kelly Chairman Strengths Weaknesses
Bobby Kotick Chief Executive Officer
R&D Revenue Decline
Robert Corti Director
Global Presence
Barry Meyer Director
Peter Nolan Director
Source: Annual Report, Company Website, Primary and Secondary Opportunities Threats
Research, GlobalData
Share Data Global Media and Entertainment Intense Competition
Industry
Activision Blizzard Inc Dependence on External
Share Price (USD) as on 28-Aug- 83.21 Launch of New Products Developers
2020
EPS (USD) 1.95
Source: Annual Report, Company Website, Primary and Secondary Research,
Market Cap (million USD) 64,227 GlobalData
Enterprise Value (million USD) 60,774

Shares Outstanding (million) 772
Source: Annual Report, Company Website, Primary and Secondary
Financial Performance
Source: Annual Report, Company Website, Primary and Secondary

© GlobalData 2020. This product is licensed and is not to be photocopied. Page 2

Table of Contents
Table of Contents................................................................................................................................................................ ............... 3
List of Tables................................................................................................................................................................ .................. 5
List of Figures ................................................................................................................................................................ ................ 5
Section 1 - About the Company ................................................................................................................................ ......................... 6
Activision Blizzard Inc - Key Facts................................................................................................................................ ....................... 6
Activision Blizzard Inc - Key Employees ................................................................................................................................ ............. 7
Activision Blizzard Inc - Key Employee Biographies ................................................................................................ ........................... 8
Activision Blizzard Inc - Major Products and Services................................................................................................ ........................ 9
Activision Blizzard Inc - History ........................................................................................................................................................ 10
Activision Blizzard Inc - Company Statement................................................................................................................................... 12
Activision Blizzard Inc - Locations And Subsidiaries ......................................................................................................................... 16
Head Office.................................................................................................................................................................................. 16
Other Locations & Subsidiaries ................................................................................................................................................... 16
Section 2 – Company Analysis.......................................................................................................................................................... 18
Company Overview .......................................................................................................................................................................... 18
Activision Blizzard Inc - Corporate Strategy ..................................................................................................................................... 19
Activision Blizzard Inc - Business Description .................................................................................................................................. 20
R&D Overview .................................................................................................................................................................................. 20
Business Segment: Activision ........................................................................................................................................................... 21
Activision - Overview ....................................................................................................................................................................... 21
Activision - Performance .................................................................................................................................................................. 21
Activision Blizzard Inc, Activision, Revenue Performance USD (m) ................................................................................................ 22
Business Segment: Blizzard .............................................................................................................................................................. 23
Blizzard - Overview .......................................................................................................................................................................... 23
Blizzard - Performance ..................................................................................................................................................................... 23
Activision Blizzard Inc, Blizzard, Revenue Performance USD (m) ................................................................................................... 24
Business Segment: King ................................................................................................................................................................... 25
King - Overview ................................................................................................................................................................................ 25
King - Performance .......................................................................................................................................................................... 25
Activision Blizzard Inc, King, Revenue Performance USD (m) ......................................................................................................... 26
Geographical Segment: Asia-Pacific................................................................................................................................................. 27
Asia-Pacific - Performance ............................................................................................................................................................... 27
Geographical Segment: EMEA ......................................................................................................................................................... 27
EMEA - Performance ........................................................................................................................................................................ 27
Activision Blizzard Inc, EMEA, Revenue Performance USD (m) ....................................................................................................... 28
Geographical Segment: The Americas ............................................................................................................................................. 29
The Americas - Performance............................................................................................................................................................ 29
Activision Blizzard Inc, The Americas, Revenue Performance USD (m) ........................................................................................... 30
Activision Blizzard Inc - SWOT Analysis ............................................................................................................................................ 31
SWOT Analysis - Overview ............................................................................................................................................................... 31
Activision Blizzard Inc - Strengths .................................................................................................................................................... 31
Activision Blizzard Inc - Weaknesses ................................................................................................................................................ 32
Activision Blizzard Inc - Opportunities ............................................................................................................................................. 33
Activision Blizzard Inc - Threats ....................................................................................................................................................... 34
Activision Blizzard Inc - Key Competitors ......................................................................................................................................... 35
Section 3 – Company Financial Ratios ............................................................................................................................................. 36
Financial Ratios - Capital Market Ratios .......................................................................................................................................... 36
Financial Ratios - Annual Ratios ....................................................................................................................................................... 37
Performance Chart........................................................................................................................................................................... 40
Financial Performance ..................................................................................................................................................................... 40
Financial Ratios - Interim Ratios ...................................................................................................................................................... 41
Financial Ratios - Ratio Charts.......................................................................................................................................................... 42

Section 4 – Appendix ....................................................................................................................................................................... 43

Methodology ............................................................................................................................................................................... 43
Ratio Definitions .......................................................................................................................................................................... 43
About GlobalData ........................................................................................................................................................................ 47
Contact Us ................................................................................................................................................................................... 47
Disclaimer .................................................................................................................................................................................... 47

List of Tables
Activision Blizzard Inc, Key Facts................................................................................................................................ ........................ 6
Activision Blizzard Inc, Key Employees................................................................................................................................ ............... 7
Activision Blizzard Inc, Key Employee Biographies ................................................................................................ ............................ 8
Activision Blizzard Inc, Major Products and Services ................................................................................................ ......................... 9
Activision Blizzard Inc, History ......................................................................................................................................................... 10
Activision Blizzard Inc, Subsidiaries.................................................................................................................................................. 16
Activision Blizzard Inc, Key Competitors .......................................................................................................................................... 35
Activision Blizzard Inc, Ratios based on current share price ............................................................................................................ 36
Activision Blizzard Inc, Annual Ratios............................................................................................................................................... 37
Activision Blizzard Inc, Annual Ratios (Cont...1)............................................................................................................................... 38
Activision Blizzard Inc, Annual Ratios (Cont...2)............................................................................................................................... 39
Activision Blizzard Inc, Interim Ratios .............................................................................................................................................. 41
Currency Codes ................................................................................................................................................................................ 43
Capital Market Ratios....................................................................................................................................................................... 43
Equity Ratios .................................................................................................................................................................................... 44
Profitability Ratios............................................................................................................................................................................ 44
Cost Ratios ....................................................................................................................................................................................... 45
Liquidity Ratios................................................................................................................................................................................. 45
Leverage Ratios ................................................................................................................................................................................ 46
Efficiency Ratios ............................................................................................................................................................................... 46
List of Figures
Activision Blizzard Inc, Performance Chart (2015 - 2019) ................................................................................................................ 40
Activision Blizzard Inc, Ratio Charts ................................................................................................................................................. 42

Section 1 - About the Company

Activision Blizzard Inc - Key Facts
Activision Blizzard Inc, Key Facts
Corporate Address 3100 Ocean Park Blvd, Santa Ticker Symbol, Exchange ATVI [NASDAQ]
Monica, CA, 90405, United
States
Telephone +1 310 2552000 No. of Employees 9,200
Fax +1 302 6365454 Fiscal Year End December
URL www.activisionblizzard.com/ Revenue (in USD Million) 7,500
Industry Media & Digital Entertainment,

Telecoms & IT, Tourism, Leisure
& Hospitality
Locations Argentina, Australia, Brazil, Canada, China, Denmark, France, Germany, Ireland, Italy, Japan, Malta,
Mexico, Netherlands, Norway, Romania, Singapore, South Korea, Spain, Sweden, Switzerland,
Taiwan, United Kingdom, United States
Source: Annual Report, Company Website, Primary and Secondary Research GlobalData

Activision Blizzard Inc - Key Employees

Activision Blizzard Inc, Key Employees
Name Job Title Board Level Since Age
Brian G. Kelly Chairman Executive Board 2013 57

Bobby Kotick Chief Executive Officer, Director Executive Board 1991 57
Robert Corti Director Non Executive Board 2003 70

Barry Meyer Director Non Executive Board 2014 76
Peter Nolan Director Non Executive Board 2013 61
Casey Wasserman Director Non Executive Board 2015 45
Robert Morgado Director Non Executive Board 1997 77
Hendrik J Hartong Director Non Executive Board 2015 53
Reveta Bowers Director Non Executive Board 2018 71
Dawn Ostroff Director Non Executive Board 2020 60
Dennis Durkin Chief Financial Officer, President Senior Management 2019 49
Emerging Businesses
Christopher Walther Chief Legal Officer Senior Management 2009 53
Claudine Naughton Chief People Officer Senior Management 2019 51
Kristin Binns Chief Communications Officer, Senior Management 2018
Senior Vice President
J. Allen Brack President Blizzard Entertainment Senior Management 2018
Ray Gresko Chief Development Officer Senior Management 2018
Steve Young President Consumer Products Senior Management 2019
Group
Rob Kostich President Activision Senior Management 2019
Humam Sakhnini President King Digital Senior Management 2019
Entertainment
David Messinger Chief Marketing Officer Senior Management 2019
Daniel Alegre Chief Operating Officer, President Senior Management 2020
Tony Petitti President Sports and Senior Management 2020

Entertainment

Activision Blizzard Inc - Key Employee Biographies

Activision Blizzard Inc, Key Employee Biographies
Mr. Brian G. Kelly has been the Chairman of the company since 2013. Prior to
Brian G. Kelly
this, he served as the Co-chairman of the company from 1998 to 2013.
Job Title: Chairman
Previously, Mr. Kelly served the company as a Director for more than 20 years
and as a Senior Executive from 1991 to 2008. He is also the Co-founder of Call of
Board Level: Executive Board
Duty Endowment, Founder and Chairman of Juvenile Diabetes Cure Alliance and
Since: 2013
the Trustee of NewYork-Presbyterian Hospital.
Age: 57
Mr. Bobby Kotick has been the Chief Executive Officer and Director of the
company since 1991. He served as the President of the company from 2008 to
Bobby Kotick
2017 and the Chief Executive Officer and Chairman from 1991 to 2008. Mr.
Job Title: Chief Executive Officer, Director
Kotick also serves as a Director of The Coca-Cola Company, Member of board of
trustees of Harvard-Westlake School and The Center for Early Education; Vice
Board Level: Executive Board
Chairman and Chairman of committee of trustees of Los Angeles County
Since: 1991
Museum of Art; and the Co-founder and Co-Chairman of Call of Duty
Age: 57
Endowment.
Mr. Dennis Durkin has been the President of Emerging Businesses and Chief
Dennis Durkin Financial Officer of the company since 2019. He served as the Chief Corporate
Job Title: Chief Financial Officer, President Officer of the company from 2017 to January 2019. Previously, he held a
Emerging Businesses number of positions, including as the Corporate Vice President and Chief
Operating and Financial Officer of interactive entertainment business at
Board Level: Senior Management Microsoft. Prior to that, he worked on Microsoft's corporate development and
Since: 2019 strategy team for seven years. Earlier, Mr. Durkin also served as a Financial
Age: 49 Analyst at Alex. Brown and Company.
Mr. Christopher Walther has been the Chief Legal Officer of the company since
2009. He served as the Secretary of the company from 2010 to 2011. He held
various positions within the legal department of The Procter & Gamble
Christopher Walther
Company from 1992 to 2009, including serving as the General Counsel for
Job Title: Chief Legal Officer
Central and Eastern Europe, Middle East and Africa, Northeast Asia and
Western Europe. Previously, he led corporate and securities and mergers and
Board Level: Senior Management
acquisitions practices at Procter & Gamble, and served as a law clerk for Senior
Since: 2009
Judge Harry W. Wellford of the United States Sixth Circuit Court of Appeals.
Age: 53
Earlier, Mr. Walther served on the board of directors of the Alliance for
Children's Rights and also serves as its Co-Chair.
Claudine Naughton
Ms. Claudine Naughton has been the Chief People Officer of the company since
Job Title: Chief People Officer
2019. Prior to this, she served as Executive Vice President and Chief Human
Resources Officer, and held various leadership positions in human resources
department of American International Group, Inc. (AIG) from 1997 to 2018.
Since: 2019
Age: 51
Daniel Alegre
Mr. Daniel Alegre serves as President and Chief Operating Officer of the
Job Title: Chief Operating Officer, President
company since 2020. Prior to this, he served as President of Global Retail and
Shopping at Google. He also worked at various positions at Google.
Since: 2020

Activision Blizzard Inc - Major Products and Services

Activision Blizzard is a provider of entertainment content and services. The company's major products include the following:
Activision Blizzard Inc, Major Products and Services

Products:
Entertainment Content
Interactive Software Products
Services:
Logistics
Warehousing
Sales Distribution Services
Brands:
Call of Duty
Skylanders
World of Warcraft
Diablo
Destiny
Hearthstone
Candy Crush
World of Warcraft
Overwatch

Activision Blizzard Inc - History

Activision Blizzard Inc, History
2020 Contracts/Agreements In January, the company signed a multiyear partnership with Google to utilize
the Google cloud platform for its game hosting and other technical needs.
2020 New Products/Services In May, the company launched the new modern warfare and warzone store
bundles for its users.
2019 Contracts/Agreements In October, the company and GameStop partnered to launch Call of Duty:
Modern Warfare.
2019 New Products/Services In October, the company in partnership with Tencent launched Call of Duty:
Mobile
2018 New Products/Services In August, the company’s subsidiary, King introduced Hungry Yeti, a new
augmented reality feature in Candy Crush Friends Saga on Samsung Galaxy
devices.
2017 Acquisitions/Mergers/Takeovers In January, the company's King mobile game division acquired Omniata., a
analytics and engagement firm.
2017 Contracts/Agreements In August, the company's subsidiary Publishing, Inc and Bungie announced
Destiny 2’s 2017 partnerships with Rockstar Energy Drink, as well as Pop-
Tarts toaster pastries.
2017 Corporate Changes/Expansions In February, the company launched its consumer products division.
2016 Acquisitions/Mergers/Takeovers The company acquired the business of Major League Gaming., a leader in
creating and streaming premium live gaming events.
2016 Asset Purchase In January, The company acquired the assets of Major League Gaming, a live
esports event organizer, which valued $46 million.
2016 Contracts/Agreements The company partnered with Facebook, to provide gamers around the world
with new ways to connect and share their gaming experiences.
2016 New Products/Services In December, The company expanded its in-game program that supports the
Call of Duty Endowment's nationwide effort.
2016 New Products/Services The company announced the launch of Call of Duty Endowment's nationwide
effort, to help veterans find high-quality careers.
2016 New Products/Services The company's subsidiary Blizzard Entertainment, announced the launching
of Overwatch, an upcoming multiplayer first-person shooter vedio game.
2015 Acquisitions/Mergers/Takeovers The company sets plans to acquire King Digital Entertainment plc.
2015 Contracts/Agreements In June, Activision Publishing, a subsidiary of Activision Blizzard and Nintendo
collaborated to offer New Skylanders.
2015 Contracts/Agreements In June, Bungie and Activision Publishing, a subsidiary of Activision Blizzard
launched The Taken King, the Next Epic Adventure in the Destiny Saga.
2015 Corporate Awards In March, Activision Blizzard, Inc. named to Fortune's 100 Best Companies to
Work For list in 2015.
2015 New Products/Services The company collaborated with Vicarious Visions, to introduce the
Skylanders franchise firsts, racing and online multiplayer gameplay on
console in Skylanders SuperChargers.
2015 New Products/Services The company's subsidiary Activision Publishing, Inc. introduced next-
generation gaming releases.
2014 Contracts/Agreements The company's division Blizzard Entertainment, Inc. entered into a
partnership with TeSPA, an eSports Association, to assist College Gaming
Groups at the Grassroots Level.

2014 Stake Sale In May, the company has sold its common stock owned by Vivendi S.A.
1979 Incorporation/Establishment The company was incorporated.

Activision Blizzard Inc - Company Statement
A joint statement by Mr. Brian Kelly, the Chairman, and Mr. Bobby Kotick, the Chief Executive Officer and Director of Activision Blizzard Inc, is
given below. The statement has been taken from the company’s 2019 annual report.
To Our Shareholders
We are writing this letter at a time when societies around the world are facing terrible disruption from the spread of the coronavirus. Events
are unfolding quickly, but the virus has already exacted a tragic toll among those directly exposed and caused significant hardship for so many.
Our first priority is always the safety and well-being of our employees and their families and we are committed to their health and safety.
Amidst this turbulent backdrop, we are inspired and heartened by the fact that interactive entertainment is bringing solace, joy and
companionship to countless players around the world. Throughout human history, games of all forms have brought people together to
compete, team up and socialize. Many such activities have been curtailed as a result of the pandemic, but we are fortunate to still be in a
position to enable some of the world’s best entertainment experiences through our direct digital connection to hundreds of millions of
people. Our mission is to connect and engage the world through epic entertainment, and we believe our games have been helping our
communities manage through an incredibly challenging time.
Since 1991, when we purchased our stake in the company and were given the privilege of managing it, the company’s book value per share
has grown at a compound annual rate of 30%. If you had invested $1,000 in our company 20 years ago, your investment would have been
worth $51,620 at the end of 2019, 16 times more than the S&P 500’s $3,242 over the same period.
Delivering this level of long-term performance in a dynamic industry requires both a constant commitment to providing superior returns to
our shareholders and a willingness to transform the business during pivotal periods in its history. For Activision Blizzard, 2019 was such a
period. We delivered net bookings1 of $6.4 billion, operating cash flow of $1.8 billion, and non-GAAP EPS of $2.31 (it is important to
understand the meaning of these terms and how non-GAAP EPS reconcile to GAAP, and we explain this in the tables at the end of this Annual
Report). Our top and bottom-line results were down significantly from our prior year performance, even though our industry grew during the
same period. This isn’t the level of excellence we have maintained for most of the last 30 years we have managed the company. It is said,
“Vision without execution is hallucination”, and our 2019 results were impacted by poor execution managing our content pipeline and not
moving quickly in the management of our costs. To address this, we made important organizational changes to better position us for the
continued delivery of games and better financial performance, and we expect 2020 will begin to reflect the benefit of these changes.
In 2019, we increased investment and focus on our biggest franchises and opportunities, in the service of delivering more high-quality content
faster, to meet the expectations of our large and growing communities. By increasing our investment in our biggest franchises, we are staying
true to the approach of doing a few things very well, an approach that has driven much of our company’s historic success. We also began
removing complexity, bureaucracy and duplication of effort across our business units, and we adjusted our commercial operations to better
reflect the industry shift to digital sales. In doing so, we established the building blocks to continue generating sustainable, longterm growth
for our shareholders.
2019 was a year of transition and investment for the company. We demonstrated meaningful progress in our growth initiatives for some of
our most important franchises, and we exited the year with momentum throughout the company. Our work delivered step changes in reach
and engagement for two of our biggest franchises, Call of Duty and World of Warcraft, which further adds to our confidence that we are
pursuing the right course of action across our entire portfolio.
Our creative teams are working on the biggest pipeline of new content in our history. And our commercial teams are exploring new business
models and distribution channels to ensure this content reaches even more players in the future. While some of these initiatives will need
more time to bear fruit, we see a clear path to unlock the vast potential within our portfolio of fully owned intellectual property, delivering
the growth and superior financial performance that our stakeholders rightly expect.
Pointers To The Future

Gamers are playing fewer games for longer, and we are fortunate to fully own some of the most popular franchises in the world, including Call
of Duty, Candy Crush, World of Warcraft, Hearthstone, Overwatch and Diablo. Reflecting on 2019, we have seen early but improved returns
from our increased investment in these franchises, including strong growth in reach, engagement and player investment for key content.
These successes improved our financial results last year, but more importantly they highlight the potential and future opportunities across our
entire portfolio.
Mobile devices became our leading platform in 2019 following the October launch of Call of Duty: Mobile. We see this successful launch as
just the first phase in expanding our established console and PC franchises to the largest and fastest growing gaming platform. The Call of

Duty franchise has long been one of the most successful in the entertainment industry, generating more upfront sales on console than any
other franchise worldwide for 10 of the last 11 years. But the franchise reached unprecedented scale following the release of the mobile title,
more than tripling its reach with over 150 million mobile downloads in the fourth quarter. The game reached the top of the install charts in
over 150 countries, reflecting Call of Duty’s global stature and awareness even in countries that we were previously unable to serve. And early
monetization was strong, with the game entering the top 10 mobile grossing charts in over 100 countries.
Call of Duty continued to raise the bar on the core console and PC platforms too, following the highly successful launch of Call of Duty:
Modern Warfare in October. We introduced some important changes with the title - this is the first Call of Duty game in which the community
can play with one another regardless of their console or PC, and we are delivering major follow-on content to all players for free. Our intent
was to create a single, large, highly-engaged community, delivering an even better experience for our players while also creating more
opportunity for investment in in-game items. The results were spectacular, with Modern Warfare recording strong year-of-year growth in
both unit sell-through and in-game net bookings in its launch quarter.
And the first months of 2020 have seen us build on this momentum even further. In March we expanded the Modern Warfare experience
with Call of Duty: Warzone, a major new way to enjoy this game that is cross-play enabled and free-to-play on console and PC. Warzone adds
yet more compelling content for our Modern Warfare community and also enables an entire new set of players around the world to
experience Call of Duty for free. The response has been excellent, with Warzone bringing in over 50 million players in its first month and
contributing to new highs in reach, engagement, and player investment for the franchise.
Call of Duty: Mobile’s success demonstrates the opportunity for many of our franchises to attract far bigger audiences through the mobile
platform. Our portfolio of action, role-playing and strategy games are particularly well-suited for mobile, making the combination of our
globally-beloved IP and increasingly capable mobile devices even more powerful. We intend to expand each of our most important console
and PC franchises to mobile and expect the platform to be a significant growth driver for the company in the coming years. With Diablo
Immortal and new content from King planned to enter testing in the coming quarters, we could not be more excited about the opportunities
ahead.
These mobile initiatives build on the leadership position we already enjoy on the mobile platform through our King business. King’s Candy
Crush Saga was once again the top grossing title in the U.S. app stores last year and the Candy Crush franchise was again the top grossing
franchise. Our advertising business continued to grow at a fast pace with net bookings almost doubling year-over-year in 2019 to over $150
million, as brands continued to embrace the opportunity to advertise within King’s large and highly engaged network. Again, this early success
points to a much larger opportunity over the long term. We expect further growth in the King ads business as we build our direct sales
capability and create more competition for our inventory by partnering with more ad agencies and networks. And having invested in building
a scalable ad platform and expanding distribution, we are now pursuing opportunities to leverage these capabilities across other assets,
including Call of Duty: Mobile and our esports content.
It was also a momentous year for World of Warcraft. Blizzard celebrated the 15th anniversary of World of Warcraft and the 25th anniversary
of the Warcraft IP by launching Classic, a recreation of the game as it all began 15 years ago. In the third quarter, World of Warcraft added
more monthly or longer-term subscribers than in any prior quarter in its 15-year history. And with strong retention, the franchise entered
2020 with great momentum, having doubled its subscriber base in the second half of last year.
The success of Classic highlighted how major releases can invigorate our franchises, expand our communities and drive strong financial
results. Last year, Blizzard unveiled more major content in its pipeline than ever before, including the eagerly anticipated next installments for
Overwatch and Diablo, two of the biggest franchises in the industry. We intend these launches, along with other innovations across World of
Warcraft and Hearthstone, to enable Blizzard to deliver the consistent business growth that we know is possible in an industry with so many
tailwinds.
We also continued to lead the way with our pioneering professional esports initiatives. While the early stage efforts have shown promise,
these are still incubation initiatives. The results of these efforts will likely be volatile and lumpy, but over the long term they will help solidify
the enduring appeal of our franchises and set the foundation for substantial shareholder value creation. The Overwatch League enjoyed a
successful second season, with U.S. average minute audience viewership growing over 30% versus the first season and absolute viewership
among the hard-to-reach 18-34 demographic surpassing both Major League Soccer and Major League Baseball. We are confident that our
differentiated approach of city-based teams, professional players, structured economics, and premium content is the right model for fans and
team owners alike. We are now bringing this approach to our new Call of Duty League. We sold 12 teams ahead of the inaugural 2020 season,
all at a premium to the initial Overwatch League franchise sales, with ten of the teams sold to existing Overwatch League team owners. We
have ambitious plans for esports, but like any unproven, new enterprise, professional esports is in its first inning and requires continued
investment and refinement.
Redefining Social Spaces

Now more than ever, video games are redefining what it means to interact socially. Games empower players to take ownership of their
interactive experiences and share those experiences across a global community. They offer an unparalleled storytelling capability, a multitude

of options to personalize the player experience and a massive number of ways to compete or collaborate. The gaming ecosystem is ripe for
social interactions that connect people more deeply than any other form of media.
We recently received a heartfelt letter from a Call of Duty fan in Ireland. He wrote to us explaining how he and three schoolfriends had stayed
in close contact by playing Call of Duty even as they went to university, got jobs and moved around the world. He talked of the bond that they
forged over many hours of gameplay over many years, and how in turn his mother would see the enjoyment and warmth that he felt from
spending time online with his close friends. When his mother was tragically killed in March this year, those friends traveled long distances to
be by his side and comfort him, making him forever appreciative of the strength of the friendships forged through years of enjoying Call of
Duty together. They remain in touch through the social experience of playing Call of Duty.
Stories like this are a powerful reminder of how our titles can impact, inspire and unite people around the world, empowering them to
achieve amazing things through their shared love of gaming. Although we have only just started to scratch the surface of what’s possible for
social networking around our games, we are already connecting people around the world in extraordinary ways. We are committed to
exploring innovative ways to bring our players closer together, further deepening the experience for communities and in turn widening the
moats around our largest franchises.
Caring For Our People And Our Communities

We aim to bring our key franchises to more players in more countries on more platforms than ever before. This aspiration shines a light on the
truly global and diverse nature of our community, and we firmly believe that it takes a diverse and engaged team to serve such an audience.
We have made great strides in introducing more ways for our employees to engage in the causes they care about most. For the first time in
2019 we launched employee affinity networks at the company level, with approximately 2,000 employees already participating. And, with
plans to launch more networks to serve our employee populations across each of our business units, we expect participation to grow in 2020.
Our employees, and our players, also widely participate in our corporate responsibility programs. One of our most successful initiatives is the
Call of Duty Endowment, which we founded in 2009 to help returning veterans transition to the civilian workforce. We help veterans find
high-quality careers by making grants to groups that prepare them for the job market and raise awareness of the value vets can bring to the
workplace. To date, we’ve funded the placement of more than 66,000 former service members into highquality jobs, including 11,000 in 2019
alone. We’re on track to beat our goal of getting 100,000 veterans back to work by 2024. At Blizzard, the team continues to offer
philanthropic opportunities to employees and fans alike, partnering with Girls Who Code to host a STEM-focused summer immersion program
for high school students, and launching a World of Warcraft in-game charitable campaign with proceeds supporting Make-A-Wish Foundation
and We.org. And King once again partnered with Diversi on a global scholarship program to offer internship opportunities across its studios to
aspiring women in games.
We are honored to have been recognized for our progress in these important areas of corporate responsibility. In 2019 we were named one
of Fortune’s World’s Most Admired Companies® for the fourth consecutive year, and were included in the Best Places to Work for LGBTQ
Equality by the Human Rights Campaign Foundation and Fast Company’s 50 Best Workplaces for Innovators.
We also take our responsibility to protect the diversity of our player communities very seriously. We want our content and esports leagues to
continue to be inclusive and secure platforms where players are celebrated and fans can come together over a shared passion for our games.
This means creating an environment that is inclusive for all and we hope to continue to live up to that expectation as we push the boundaries
further on what is possible in gaming and esports.
At the time of writing, we are of course very focused on keeping our employees and fans safe in the wake of the coronavirus pandemic, and
on playing our part to slow the spread of the virus. This has included adopting remote work policies for all of our office locations around the
world and making numerous healthcare resources available to our employees through our world-class benefits program. For our esports fans,
our league events are moving to broadcast-only. We won’t have live audiences in our global venues for the Overwatch League and Call of
Duty League, but the digital nature of esports means we can still deliver great experiences to spectators. We are incredibly proud of the
tireless work of our teams to enact such measures so swiftly. We continue to monitor the situation while identifying additional ways to
promote safe work and entertainment environments.
Strong Foundation For The Future

We entered 2020 with an excellent pipeline, increased focus on our biggest franchises and opportunities, and less complexity and duplication
across our organization. We are committed to delivering more high-quality content more frequently for our biggest franchises. And we are
leveraging talent, expertise and scale across our business more than ever before, as we continue to improve the operating excellence that has
characterized the company for nearly three decades.
Our core principles will continue to guide us as we execute both near-term and long-term:
Delivering innovative and compelling entertainment experiences with continuous investment in our franchises and communities;

Focusing on the largest and most promising opportunities;
Recruiting, rewarding and retaining diverse worldclass talent, emphasizing our shared common values and commitment to excellence;
and Remaining disciplined in our commitment to deliver shareholder value.
Our mission to connect and engage the world through epic entertainment has never been more meaningful than it is today. Through our
games, content, and the communities we serve, we are uniquely positioned to make a meaningful and positive impact for hundreds of
millions of people during an especially difficult period. We are only able to do this due to our talented teams around the world and the
exceptional work our employees deliver day in and day out. We thank our employees for all they are continuing to do under extremely
challenging circumstances. We are so very proud to work with such an extraordinary group of people.
On behalf of all of us at Activision Blizzard, we would like to thank each of our shareholders, partners and players for their continued support
of our business, and to wish you and your families health and safety through this difficult time.

Activision Blizzard Inc - Locations And Subsidiaries

Head Office
Activision Blizzard Inc
3100 Ocean Park Blvd
Santa Monica
CA
90405
United States
Tel: +1 310 2552000
Fax: +1 302 6365454
Other Locations & Subsidiaries
Activision Blizzard Inc, Subsidiaries
Midasplayer AB King.com (US) LLC

United States
Sweden
Activision Asia Pacific Holding Pte. Ltd. Activision Publishing Minneapolis Inc
Singapore United States
Blizzard Entertainment SAS King.com Ltd

Stockholm
Sweden
Url: king.com
Overwatch League LLC Sledgehammer Games Inc

United States United States
Treyarch Corporation King.com Limited

United States Malta
Omniata Inc. Activision Publishing, Inc.

San Francisco 3100 Ocean Park Boulevard
CA Santa Monica
United States CA
Url: www.omniata.com 90405
United States
ATVI International SRL Activision Blizzard UK Limited

Barbados United Kingdom
Blizzard Entertainment, Inc Massive Entertainment AB

P.O. Box 18979 Sodra Tullgatan 4
Irvine Malmo
CA Stockholm
92623 21140
United States Sweden
Tel: +1 949 9550283 Tel: +46 40 6001000
Fax: +1 949 7377900 Fax: +46 40 6001099
Url: www.blizzard.com Url: www.massive.se
King Digital Entertainment plc ATVI C.V.

6th Floor Netherlands
2 Grand Canal Square
Dublin

Leinster
2 L2 D2
Ireland
Tel: +44 203 4402393
Url: www.king.com

Section 2 – Company Analysis

Company Overview
Activision Blizzard Inc (Activision Blizzard) is a gaming company that develops and publishes interactive software products, entertainment
content and services for mobile devices, video game console and personal computers. The company develops film and television content and
operates esports leagues and events. Activision Blizzard’s major product franchises include Candy Crush, Call of Duty, Hearthstone,
Skylanders, World of Warcraft, and Diablo. It also provides sales distribution, warehousing and logistics services to manufacturers of
interactive entertainment hardware and third-party publishers of interactive entertainment software. Activision Blizzard sells games through
digital and retail distribution channels. The company’s business operations span across the Americas, Europe, and Asia-Pacific. Activision
Blizzard is headquartered in Santa Monica, California, the US.

Activision Blizzard Inc - Corporate Strategy

Activision Blizzard aims to become a leading developer, publisher, and distributor of high-quality interactive entertainment content, services
and related media worldwide. In order to achieve this objective, the company focuses on three strategic areas, which include providing more
opportunities for player investment, driving deep consumer engagement, and expanding audience reach.
The company intends to provide additional digital player investment opportunities directly to its consumers on a year-round basis. Through
this, the players can invest in certain of the company’s games and franchises, in addition to purchasing full games or subscriptions. Activision
Blizzard designs games, and related media, to provide a depth of content, which keeps consumers involved for a long period of time following
a game's release, delivering additional growth opportunities for its franchises and more value to the players. The company focuses on
expanding audience reach by creating new franchises and developing strong established franchises. It plans to reach many of its consumers
through, engagement in other types of media, such as esports and film and television content; engagement in free-to-play games and through
the purchase of its content and services.

Activision Blizzard Inc - Business Description

Activision Blizzard Inc (Activision Blizzard) is a developer and publisher of interactive entertainment content and services. It also develops film
and television content and operates esports leagues and events.
The company provides warehousing, sales distribution, and logistics services to manufacturers of interactive entertainment hardware and
third-party publishers of interactive entertainment software.
The company markets and sells games through three distribution channels, including Digital Online, Retail and Other. In FY2019, Digital Online
accounted for 76% of the company’s revenue, followed by Retail (14%) and Other (10%).
The company classifies its business operations into three reportable segments: Activision, Blizzard, and King. It operates 80 leased facilities for
administrative and sales functions and development studio personnel across the US, Australia, Canada, Brazil, China, Germany, France, Japan,
Ireland, Malta, Italy, Mexico, Romania, the Netherlands, South Korea, Singapore, Taiwan, Spain, Sweden, and the UK. It owns two European
warehouses in Venlo, the Netherlands, and Burglengenfeld, Germany.
R&D Overview
R&D activities of Activision Blizzard focus on developing high-quality, well-designed games. Activision Blizzard develops most of its content for
franchises by internal studios. It also creates content through independent third-party developers. The company’s central technology and
development teams review, assess, and provide support to products during the development process. In FY2019, the company incurred
expenses of US$998 million on R&D, which as a percentage of revenue, stood at 15%.

Business Segment: Activision

Activision - Overview
Operates through Activision Publishing, Inc that develops and publishes entertainment content and software products for the console
platforms. Major product franchise is Call of Duty.
Distributes content through digital and retail channels, including full-game and in-game sales, and by licensing software to third-party
companies that distribute Activision products.
Activision - Performance
Reported revenue of US$2,219 million for FY2019, which decreased 9.7% YoY, and recorded negative growth of 8.1% during 2017-19. The
segment accounted for 37.4% of the company's revenue in FY2019. It reported operating profit of US$850 million in FY2019, which decreased
15.9% YoY.
Decline in revenue was due to lower revenue from Call of Duty franchise catalog titles, and Destiny franchise.

Activision Blizzard Inc, Activision, Revenue Performance USD (m)

Year Revenue
2016 2,220
2017 2,628
2018 2,458
2019 2,219

Business Segment: Blizzard

Blizzard - Overview
Operates through Blizzard Entertainment, Inc that develops and publishes entertainment content and software products for the PC platform.
Major product franchises include Diablo, World of Warcraft, StarCraft, Overwatch, and Hearthstone.
Distributes content through digital and retail channels, including full-game and in-game sales, subscriptions and by licensing software to third-
party companies that distribute Blizzard products. Manages an online gaming service platform, Blizzard Battle.net.
Blizzard - Performance
segment accounted for 28.3% of the company's revenue in FY2019. It reported operating profit of US$464.0 million in FY2019, which
decreased 32.3% YoY.
Decline in revenue was due to lower revenue from Hearthstone and overall lower revenues from World of Warcraft

Activision Blizzard Inc, Blizzard, Revenue Performance USD (m)

Year Revenue
2016 2,439
2017 2,120
2018 2,238
2019 1,676

Business Segment: King

King - Overview
Operates through King Digital Entertainment that develops and publishes interactive entertainment content and services on PC platform and
mobile platforms, such as Apple Inc.'s iOS and Google Inc.'s Android. Major product franchises include Farm Heroes, Bubble Witch, and Candy
Crush.
King - Performance
Reported revenue of US$2,031 million for FY2019, which decreased 2.6% YoY, and recorded a CAGR of 0.8% during 2017-19. The segment
accounted for 34.3% of the company's revenue in FY2019. It reported operating profit of US$740.0 million in FY2019, which decreased 1.3%
YoY.
Decline in revenue was due to lower revenue from in-game revenues from player purchases across various franchises.

Activision Blizzard Inc, King, Revenue Performance USD (m)

Year Revenue
2016 1,586
2017 1,998
2018 2,086
2019 2,031

Geographical Segment: Asia-Pacific

Asia-Pacific - Performance
Reported revenue of US$909 million for FY2019, which decreased 9.3% YoY, and recorded negative growth of 2% during 2017-19. Asia Pacific
accounted for 14.0% of the company's revenue in FY2019.
Decline in revenue was due to lower revenue driven by Destiny franchise and Hearthstone.
Geographical Segment: EMEA

EMEA - Performance
Reported revenue of US$2,239 million for FY2019, which decreased 14.5% YoY, and recorded negative growth of 4.7% during 2017-19. EMEA
accounted for 34.5% of the company's revenue in FY2019.
Decline in revenue was due to lower revenue driven by Call of Duty: Black Ops and Destiny franchise..

Activision Blizzard Inc, EMEA, Revenue Performance USD (m)

Year Revenue
2015 1,741
2016 2,221
2017 2,464
2018 2,618
2019 2,239

Geographical Segment: The Americas

The Americas - Performance
Americas accounted for 51.5% of the company's revenue in FY2019.
Decline in revenue was due to lower revenue from Destiny franchise.

Activision Blizzard Inc, The Americas, Revenue Performance USD (m)

Year Revenue
2016 3,423
2017 3,607
2018 3,880

Activision Blizzard Inc - SWOT Analysis

SWOT Analysis - Overview
Activision Blizzard Inc (Activision Blizzard) is a developer and publisher of entertainment content and services. R&D, distribution network and
global presence are the company’s major strengths, even as revenue decline remains cause for concern. Positive outlook for global media and
entertainment industry, global software market, and launch of new products are likely to offer growth opportunities to the company.
However, intense competitive, dependence on external developers for software products, and cyberattacks and security vulnerabilities could
affect its business operations.
Activision Blizzard Inc - Strengths

Strength - R&D
Strong R&D enable the company to maintain technological edge over its competitors and to stay ahead of industry trends. The company’s
R&D focuses on development of high-quality, well-designed games. Activision Blizzard develops most of its content for franchises by internal
studios. It also creates content through independent third-party developers. The company’s central technology and development teams
review, assess, and provide support to products during the development process. In FY2019, the company spent US$998 million on R&D,
which as a percentage of revenue stood at 15.4%.
Strength - Global Presence
The company has a wide and diversified geographic presence. Diversified geographic presence helps the company to reduce its business risks
and enables to take advantage of a range of market opportunities throughout the world. Activision Blizzard has 500 million active monthly
users in 196 countries. The company’s business operations are spread across the Americas, Asia-Pacific, Europe, the Middle and Africa
(EMEA). The company operates 80 leased facilities for administrative and sales functions and development studio personnel across the US,
Australia, Canada, Brazil, China, Germany, France, Japan, Ireland, Malta, Italy, Mexico, Romania, the Netherlands, South Korea, Singapore,
Taiwan, Spain, Sweden, and the UK. It owns two warehouses each in Venlo, the Netherlands; and Burglengenfeld, Germany.
Strength - Distribution Network
The company's strong distribution network provides competitive advantage and enhances market position. It markets products through mass
retailers such as Target and Walmart; discount warehouses, consumer electronics stores such as Best Buy; game specialty stores such as
GameStop and other retailers. The company sells its products through third-party distribution and licensing arrangements. Its products are
also available for download directly on PC, console or mobile devices via its platform partners, including Apple, Facebook, Nintendo, Google,
Microsoft and and Sony. The company distributes certain Activision content and most of Blizzard’s content through its proprietary online
gaming platfrom, Blizzard Battle.net.

Activision Blizzard Inc - Weaknesses

Weakness - Revenue Decline
Weak revenue decreases the company’s ability to allocate adequate funds for its future growth prospect. In FY2019, the company reported
revenue of US$6,489 million compared to revenue of US$7,500 million in FY2018, an annual decline of 13.5%. Revenue decline was due to
decrease in revenue from the Destiny franchise, Hearthstone, Call of Duty franchise catalog titles, and Overwatch.

Activision Blizzard Inc - Opportunities

Opportunity - Global Media and Entertainment Industry
The company provides interactive entertainment content and services. The outlook for media and entertainment industry is robust. The
market is expected to witness strong growth in the coming years. Activision Blizzard could benefit from the positive outlook for the media and
entertainment industry. According to in-house research, the global media and entertainment industry is forecast to grow at a CAGR of 1.7%
during 2017-22 to reach US$968.6 billion by 2022 from US$892 billion in 2017. The Asia-Pacific and the US markets are expected to grow with
CAGRs of 2.6% and 1% respectively, during the forecast period, to reach respective values of US$313.1 billion and US$330 billion in 2022.
Opportunity - Launch of New Products
The company focuses on the expansion of its product portfolio and players' experience through the launch of new products. In October 2019,
the company launched Call of Duty: Modern Warfare, a series that unites the massive Call of Duty community to enjoy new post-release
content coming free for all players on all platforms and to play together through cross progression and crossplay support. In the same month,
the company in partnership with Tencent launched Call of Duty: Mobile in all countries where Google Play and App Store are supported
except Belgium, Vietnam and Mainland China. Call of Duty: Mobile provides fan-favorite maps, characters, weapons and modes from across
Call of Duty, including the Black Ops and Modern Warfare series, in one complete mobile package. In August 2019, the company’s subsidiary,
King introduced Hungry Yeti, an augmented reality feature in Candy Crush Friends Saga on Samsung Galaxy devices. The new feature allows
the players to earn gifts, which they can then use in-game while switching and matching candies.
Opportunity - Global Video Game Software Market
The company is likely to benefit from the positive outlook for global gaming market as it offers interactive software products and services for
mobile devices, video game console and personal computers. The video games market is expanding in revenue and the number of
subscribers. It is likely to outgrow and overtake the sales of music, box office, and video markets. According to in-house research, the global
video game software market is expected to reach EUR100 billion by 2020. It is estimated that there are 2.6 billion gamers worldwide. Such
growth is also driven by the rising sales of digital video games. The increase in demand for video games will lead to the expansion of the
customer base of different operating companies. In November 2019, Blizzard Entertainment released Diablo IV, a new entry in its genre-
defining action–role-playing series.

Activision Blizzard Inc - Threats

Threat - Intense Competition
Activision Blizzard operates in a highly competitive entertainment industry. Intense competition could affect the company’s business
operations and its profit margin. The factors that determine the level of competition within the industry include game quality, product
features, and playability, compatibility of products with popular platforms, brand name recognition, access to distribution channels,
marketing support, online capability and functionality, quality of customer service and ease of use. The company faces competition from
other publishers of PC, video game console, and mobile interactive entertainment software. It also competes with integrated video game
console hardware and software companies. The company’s major competitors include Electronic Arts Inc, Nintendo Co Ltd, Sony Corporation,
Take-Two Interactive Software Inc, and Microsoft Corporation. Some of these competitors have higher operating histories, technical,
marketing, distribution and support resources; greater brand recognition and higher financial capability than the company, could restrict the
creation of innovative products and business expansion.
Threat - Dependence on External Developers
The company’s dependence on external developers for developing some software products could affect its business. The company’s
production could be affected if a competitor acquires the business of one or more key developers or sign them to exclusive development
arrangements. The inability to retain skilled personnel, limited business expertise and financial resources may force developers out of
business before completing products for the company or may require the company to fund additional costs. Dependence on external
developers also reduces the company’s visibility into, and control over, operational outcomes and development schedules as compared to
those when utilizing internal development resources.
Threat - Cyberattacks and Security Vulnerabilities
The constantly evolving cyber threats could disrupt the security of the company’s systems and business applications, impair the ability to
provide services to its customers and protect the privacy of their data. Hackers and organizations, including state-sponsored organizations,
continuously develop and deploy malicious software or exploit vulnerabilities in hardware, software, and other infrastructure to gain access to
organizations’ networks and datacenters. According to Internet Crime Complaint Center’s (IC3) Internet Crime Report 2018, IC3 received
351,936 complaints with financial losses of over US$2.7 billion. It received an average of over 300,000 complaints per year during the last five-
years. The IC3 received 14,408 complaints related to tech support fraud, which resulted in loss of around US$39 million in 2018. It received
20,373 Email Account Compromise (EAC)/Business Email Compromise (BEC) complaints with adjusted losses of over US$1.2 billion. The
ransomware related complaints were 1,493, causing an adjusted financial loss of over US$3.6 million. The company’s business model revolves
around providing technology products and services, which is vulnerable to increasing cyberattacks. The company needs to invest in
developing secure products, update software to address security vulnerabilities of its solutions that help in protecting its internal IT systems
and cloud-based services.
NOTE:
* Sector average represents top companies within the specified sector
The above strategic analysis is based on in-house research and reflects the publishers opinion only

Activision Blizzard Inc - Key Competitors

Activision Blizzard Inc, Key Competitors
Name Headquarters Revenue (US$ m)
Discovery Inc United States 11,144
Electronic Arts Inc United States 5,537
Microsoft Corp United States 143,015
Nintendo Co Ltd Japan 12,038
R & E Software Design LLC United States
Sony Corp Japan 79,723
Sumo Group PLC United Kingdom 52
Super League Gaming Inc United States 1
Take-Two Interactive Software Inc United States 3,089

Section 3 – Company Financial Ratios

Financial Ratios - Capital Market Ratios
Activision Blizzard Inc, Ratios based on current share price
Key Ratios 28-Aug-2020
P/E (Price/Earnings) Ratio 42.73

EV/EBITDA (Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortization) 28.14
Enterprise Value/Sales 9.37
Enterprise Value/Operating Profit 37.82
Enterprise Value/Total Assets 3.06
Dividend Yield 0.44
Note: Above ratios are based on share price as of 28-Aug-2020, the above ratios are absolute numbers

Financial Ratios - Annual Ratios

Activision Blizzard Inc, Annual Ratios
Key Ratios Unit/Currency 2015 2016 2017 2018 2019
Equity Ratios
EPS (Earnings per Share) USD 1.19 1.28 1.19 1.96 1.95
Dividend per Share USD 0.23 0.26 0.30 0.34 0.37
Dividend Cover Absolute 5.18 4.91 3.96 5.75 5.27
Book Value per Share USD 10.98 12.23 12.49 14.92 16.66
Cash Value per Share USD 2.48 3.92 5.82 5.49 7.49
Profitability Ratios
Gross Margin % 66.02 63.77 64.36 66.44 67.73
Operating Margin % 28.28 19.98 18.48 25.97 24.76
Net Profit Margin % 19.13 14.62 3.89 24.64 23.16
Profit Markup % 194.26 176.02 180.57 197.97 209.89
PBT Margin (Profit Before Tax) % 24.04 16.74 16.40 25.03 25.17
Return on Equity % 11.06 10.59 2.89 16.22 11.74
Return on Capital Employed % 10.44 8.92 8.64 12.78 9.49
Return on Assets % 5.97 5.91 1.51 10.11 7.97
Return on Working Capital % 169.97 60.72 45.40 56.24 36.71
Growth Ratios
Sales Growth % 5.81 41.68 6.19 6.88 -13.48
Operating Income Growth % 11.50 0.08 -1.74 50.19 -17.51
EBITDA Growth % 11.50 0.08 -1.74 50.19 -17.51

Activision Blizzard Inc, Annual Ratios (Cont...1)

Net Income Growth % 6.83 8.30 -71.74 576.92 -18.67
EPS Growth % 5.94 15.96 -16.71 75.50 3.85
Working Capital Growth % -79.72 180.15 31.42 21.25 26.36
Cost Ratios
Operating Costs (% of Sales) % 71.72 80.02 81.52 74.03 75.24
Administration Costs (% of Sales) % 23.89 27.91 30.47 25.12 25.55
Liquidity Ratios
Current Ratio Absolute 1.30 1.82 1.78 2.31 2.50
Quick Ratio Absolute 1.25 1.80 1.77 2.29 2.49
Cash Ratio Absolute 0.70 1.22 1.29 1.66 2.01
Leverage Ratios
Debt to Equity Ratio % 0.50 0.54 0.46 0.23 0.21
Net Debt to Equity Absolute 0.28 0.18 -0.03 -0.13 -0.24
Debt to Capital Ratio % 0.34 0.35 0.32 0.19 0.17
Efficiency Ratios
Asset Turnover Absolute 0.31 0.40 0.39 0.41 0.34
Fixed Asset Turnover Absolute 26.96 29.57 25.42 26.04 16.92
Inventory Turnover Absolute 12.63 27.05 52.65 56.56 55.84
Current Asset Turnover Absolute 0.94 1.61 1.24 1.19 0.97
Capital Employed Turnover Absolute 0.37 0.45 0.47 0.49 0.38

Activision Blizzard Inc, Annual Ratios (Cont...2)

Working Capital Turnover Absolute 6.01 3.04 2.46 2.17 1.48
Revenue per Employee USD 705,326
Net Income per Employee USD 163,370
Capex to Sales % 2.38 2.06 2.21 1.75 1.79
R&D to Sales % 13.85 14.50 15.23 14.68 15.38

Performance Chart
Activision Blizzard Inc, Performance Chart (2015 - 2019)
Financial Performance
The company reported revenues of (US Dollars) US$6,489 million for the fiscal year ended December 2019 (FY2019), a decrease of 13.5% over
FY2018. In FY2019, the company’s operating margin was 24.8%, compared to an operating margin of 26% in FY2018. In FY2019, the company
recorded a net margin of 23.2%, compared to a net margin of 24.6% in FY2018.
The company reported revenues of US$1,788 million for the first quarter ended March 2020, a decrease of 10% over the previous quarter.

Financial Ratios - Interim Ratios

Activision Blizzard Inc, Interim Ratios
Key Ratios Unit/Currency Jun-2019 Sep-2019 Dec-2019 Mar-2020 Jun-2020
Interim EPS (Earnings per Share) USD 0.43 0.26 0.68 0.65 0.75
Dividend per Share USD 0.37
Book Value per Share USD 15.62 15.93 16.66 16.90 17.73
Gross Margin % 68.98 65.52 66.92 71.76 75.72
Operating Margin % 24.07 19.27 22.86 34.23 38.77
Net Profit Margin % 23.50 15.91 26.44 28.24 30.02
Profit Markup % 222.40 190.05 202.28 254.06 311.94
PBT Margin (Profit Before Tax) % 26.50 19.42 22.51 33.78 37.63
Operating Costs (% of Sales) % 75.93 80.73 77.14 65.77 61.23
Administration Costs (% of Sales) % 25.86 28 27.74 22.93 21.58
Current Ratio Absolute 3.46 3.43 2.50 2.78 3.02
Quick Ratio Absolute 3.43 3.38 2.49 2.78 3.02
Debt to Equity Ratio % 0.22 0.22 0.21 0.21 0.20
Net Debt to Equity Absolute -0.16 -0.18 -0.24 -0.25 -0.27
Debt to Capital Ratio % 0.17 0.17 0.16 0.16 0.15

Financial Ratios - Ratio Charts

Activision Blizzard Inc, Ratio Charts
EPS Operating Margin
Return on Equity Return on Assets
Debt to Equity Ratio Current Ratio

Section 4 – Appendix
The data and analysis within this report is driven by GlobalData.
GlobalData gives you key information to drive sales, investment and deal making activity in your business.
Our coverage includes 200,000 + reports on 185,000+ companies (including 150,000+ private) across 200+ countries and 29 industries. The
key industries include Alternative Energy, Oil & Gas, Clean Technology, Technology and Telecommunication, Pharmaceutical and Healthcare,
Power, Financial Services, Chemical and Metal & Mining.
Methodology
GlobalData company reports are based on a core set of research techniques which ensure the best possible level of quality and accuracy of
data. The key sources used include:
• Company Websites
• Company Annual Reports
• SEC Filings
• Press Releases
• Proprietary Databases
Currency Codes
Currency Code Currency
USD U.S. Dollars

GlobalData
Ratio Definitions
Capital Market Ratios
Capital Market Ratios measure investor response to owning a company's stock and also the cost of issuing stock.
Price/Earnings (P/E) ratio is a measure of the price paid for a share relative to the annual income earned
per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more
Price/Earnings Ratio
for each unit of income, so the stock is more expensive compared to one with lower P/E ratio. A high P/E
(P/E)
suggests that investors are expecting higher earnings growth in the future compared to companies with a
lower P/E. Price per share is as of previous business close, and EPS is from latest annual report.
Calculation: Market Cap / Net Income
Enterprise Enterprise Value/EBITDA (EV/EBITDA) is a valuation multiple that is often used in parallel with, or as an
Value/Earnings before alternative to, the P/E ratio. The main advantage of EV/EBITDA over the PE ratio is that it is unaffected by a
Interest, Tax, company's capital structure. It compares the value of a business, free of debt, to earnings before interest.
Depreciation & Price per share is as of previous business close, and shares outstanding last reported. Other items are from
Amortization latest annual report.
(EV/EBITDA) Calculation: {(Market Cap + Debt + Minority Interest + Preferred Stock (Redeemable + Non-
Redeemable) - Cash & Cash Equivalents)} / (Operating Income + Depreciation + Amortization)
Enterprise Value/Sales (EV/Sales) is a ratio that provides an idea of how much it costs to buy the company's
sales. EV/Sales is seen as more accurate than Price/Sales because market capitalization does not take into
account the amount of debt a company has, which needs to be paid back at some point. Price per share is
Enterprise Value/Sales
as of previous business close, and shares outstanding last reported. Other items are from latest annual
report.
Calculation: {(Market Cap + Debt + Minority Interest + Preferred Stock (Redeemable + Non-
Redeemable) - Cash & Cash Equivalents)} / Revenue

Enterprise Value/Operating Profit measures the company's enterprise value to the operating profit. Price
Enterprise per share is as of previous business close, and shares outstanding last reported. Other items are from latest
Value/Operating Profit annual report.
Redeemable) - Cash & Cash Equivalents)} / Operating Income
Enterprise Value/Total Assets measures the company's enterprise value to the total assets. Price per share
Enterprise Value/Total is as of previous business close, and shares outstanding last reported. Other items are from latest annual
Assets report.
Redeemable) - Cash & Cash Equivalents)} / Total Assets
Dividend Yield Dividend Yield shows how much a company pays out in dividends each year relative to its share price. In
the absence of any capital gains, the dividend yield is the return on investment for a stock.
Calculation: Annual Dividend per Share / Price per Share
GlobalData
Equity Ratios
These ratios are based on per share value.

Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of
Earnings per Share (EPS) common stock. EPS serves as an indicator of a company's profitability.
Calculation: Net Income / Weighted Average Shares
Dividend per Share Dividend is the distribution of a portion of a company's earnings, decided by the board of
directors, to a class of its shareholders.
Dividend Cover Dividend cover is the ratio of company's earnings (net income) over the dividend paid to shareholders.
Calculation: Earnings per share / Dividend per share
Book Value per Share measure used by owners of common shares in a firm to determine the level of safety
Book Value per Share associated with each individual share after all debts are paid accordingly.
Calculation: {Shareholders Equity - Preferred Stock (Redeemable + Non-Redeemable)} / Outstanding
Shares
Cash Value per Share is a measure of a company's cash (cash & equivalents on the balance sheet) that is
Cash Value per Share determined by dividing cash & equivalents by the total shares outstanding.
Calculation: Cash & equivalents / Outstanding Shares
GlobalData
Profitability Ratios
Profitability Ratios are used to assess a company's ability to generate earnings, based on revenues generated or resources used. For
most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that
the company is doing well.
Gross margin is the amount of contribution to the business enterprise, after paying for direct-fixed and
Gross Margin direct-variable unit costs.
Calculation: (Gross Profit / Revenue}*100
Operating Margin Operating Margin is a ratio used to measure a company's pricing strategy and operating efficiency.
Calculation: (Operating Income / Revenue) *100
Net Profit Margin is the ratio of net profits to revenues for a company or business segment - that shows
Net Profit Margin how much of each dollar earned by the company is translated into profits.
Calculation: (Net Profit / Revenue) *100

Profit Markup Profit Markup measures the company's gross profitability, as compared to the cost of revenue.
Calculation: Gross Income / Cost of Revenue
PBIT Margin (Profit Profit Before Interest & Tax Margin shows the profitability of the company before interest expense &
Before Interest & Tax) taxation.
Calculation: {(Net Profit+Interest+Tax) / Revenue} *100
PBT Margin (Profit Profit Before Tax Margin measures the pre-tax income over revenues.
Before Tax)
Calculation: {Net Income Before Tax / Revenue} *100
Return on Equity measures the rate of return on the ownership interest (shareholders' equity) of the
Return on Equity common stock owners.
Calculation: (Net Income / Shareholders Equity)*100
Return on Capital Employed is a ratio that indicates the efficiency and profitability of a company's capital
Return on Capital investments. ROCE should always be higher than the rate at which the company borrows; otherwise any
Employed increase in borrowing will reduce shareholders' earnings.
Calculation: Operating Income / (Total Assets – Current Liabilities) * 100
Return on Assets is an indicator of how profitable a company is relative to its total assets, the ratio
Return on Assets
measures how efficient management is at using its assets to generate earnings.
Calculation: (Net Income / [Current Year Total Assets + Last Year Total Assets)/2])*100
Return on Fixed Assets measures the company's profitability to its fixed assets (property, plant &
Return on Fixed Assets equipment).
Calculation: (Net Income / [Current Year Fixed Assets + Last Year Fixed Assets)/2]) * 100
Return on Working
Return on Working Capital measures the company's profitability to its working capital.
Capital
Calculation: {Operating Income / (Current Assets-Current Liabilities)} * 100
GlobalData
Cost Ratios
Cost ratios help to understand the costs the company is incurring as a percentage of sales.
Operating costs (% of Operating costs as percentage of total revenues measures the operating costs that a company incurs
Sales) compared to the revenues.
Calculation: (Operating Expenses / Revenue) *100
Administration costs (% Administration costs as percentage of total revenue measures the selling, general and administrative
of Sales) expenses that a company incurs compared to the revenues.
Calculation: (Administrative Expenses / Revenue) *100
Interest costs (% of Interest costs as percentage of total revenues measures the interest expense that a company incurs
Sales) compared to the revenues.
Calculation: (Interest Expenses / Revenue) *100
GlobalData
Liquidity Ratios
Liquidity ratios are used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value
of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. A company's ability to turn short-
term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and
mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern.

Current Ratio measures a company's ability to pay its short-term obligations. The ratio gives an idea of the
company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash,
Current Ratio inventory, receivables). The higher the current ratio, the more capable the company is of paying its
obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they
came due at that point.
Calculation: Current Assets / Current Liabilities
Quick Ratio Quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets.
Calculation: (Current Assets - Inventories) / Current Liabilities
Cash ratio is the most stringent and conservative of the three short-term liquidity ratio. It only looks at the
most liquid short-term assets of the company, which are those that can be most easily used to pay off
Cash Ratio current obligations. It also ignores inventory and receivables, as there are no assurances that these two
accounts can be converted to cash in a timely matter to meet current liabilities.
Calculation: {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}
GlobalData
Leverage Ratios
Leverage ratios are used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to
measure its ability to meet financial obligations. There are several different ratios, but the main factors looked at include debt, equity,
assets and interest expenses.
Debt to Equity Ratio is a measure of a company's financial leverage. The debt/equity ratio also depends on
Debt to Equity Ratio the industry in which the company operates. For example, capital-intensive industries tend to have a higher
debt-equity ratio.
Calculation: Total Debt / Shareholders Equity
Debt to capital ratio gives an idea of a company's financial structure, or how it is financing its operations,
along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the
company has compared to its equity. This indicates to investors whether a company is more prone to using
Debt to Capital Ratio debt financing or equity financing. A company with high debt-to-capital ratios, compared to a general or
industry average, may show weak financial strength because the cost of these debts may weigh on the
company and increase its default risk.
Calculation: {Total Debt / (Total Debt + Shareholders Equity)}
Interest Coverage Ratio is used to determine how easily a company can pay interest on outstanding debt,
Interest Coverage Ratio
calculated as earnings before interest & tax by interest expense.
Calculation: Operating Income / Interest Expenses
GlobalData
Efficiency Ratios
Efficiency ratios measure a company's effectiveness in various areas of its operations, essentially looking at maximizing its use of
resources.
Fixed Asset Turnover ratio indicates how well the business is using its fixed assets to generate sales. A
higher ratio indicates the business has less money tied up in fixed assets for each currency unit of sales
Fixed Asset Turnover revenue. A declining ratio may indicate that the business is over-invested in plant, equipment, or other
fixed assets.
Calculation: Revenue / [Current Year Fixed Assets + Last Year Fixed Assets)/2]
Asset turnover ratio measures the efficiency of a company's use of its assets in generating sales revenue to
Asset Turnover the company. A higher asset turnover ratio shows that the company has been more effective in using its
assets to generate revenues.
Calculation: Revenue / [Current Year Total Assets + Last Year Total Assets)/2]

Current Asset Turnover Current Asset Turnover indicates how efficiently the business uses its current assets to generate sales.
Calculation: Revenue / [Current Year Current Assets + Last Year Current Assets)/2]
Inventory Turnover ratio shows how many times a company's inventory is sold and replaced over a period.
Inventory Turnover A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either strong sales
or ineffective buying.
Calculation: Cost of Goods Sold /[Current Year Inventory + Last Year Inventory)/2]
Working Capital Turnover is a measurement to compare the depletion of working capital to the generation
Working Capital of sales. This provides some useful information as to how effectively a company is using its working capital
Turnover to generate sales.
Calculation: Revenue / (Current Assets – Current Liabilities)
Capital Employed Capital employed turnover ratio measures the efficiency of a company's use of its equity in generating sales
Turnover revenue to the company.
Calculation: Revenue / (Total Assets – Current Liabilities)
Capex to Sales ratio measures the company's expenditure (investments) on fixed and related assets'
Capex to sales effectiveness when compared to the sales generated.
Calculation: (Capital Expenditure / Sales) *100
Net income per Net income per Employee looks at a company's net income in relation to the number of employees they
Employee have. Ideally, a company wants a higher profit per employee possible, as it denotes higher productivity.
Calculation: Net Income / No. of Employees
Revenue per Employee measures the average revenue generated per employee of a company. This ratio is
Revenue per Employee most useful when compared against other companies in the same industry. Generally, a company seeks the
highest revenue per employee.
Calculation: Revenue / No. of Employees
Efficiency Ratio is used to calculate a bank's efficiency. An increase means the company is losing a larger
Efficiency Ratio percentage of its income to expenses. If the efficiency ratio is getting lower, it is good for the bank and its
shareholders.
Calculation: [Non-interest expense / (Net Interest Income + Non-Interest Income)] * 100
GlobalData
Notes
• Financial information of the company is taken from the most recently published annual reports or SEC filings
• The financial and operational data reported for the company is as per the industry defined standards
• Revenue converted to USD at average annual conversion rate as of fiscal year end
About GlobalData
GlobalData is one of the world’s leading providers of company operational data and strategic analysis, providing detailed information on tens
of thousands of companies globally. Our highly qualified team of Analysts, Researchers, and Solution Consultants use proprietary data sources
and various tools and techniques to gather, analyze and represent the latest and the most reliable information essential for businesses to
sustain a competitive edge. Data is continuously updated and revised by large teams of research experts, so that it always reflects the latest
events and information. With a large dedicated research and analysis capability, GlobalData employs rigorous primary and secondary research
techniques in developing unique data sets and research material for this series and its other reports. GlobalData offers comprehensive
geographic coverage across world’s most important sectors, focusing particularly on energy and healthcare.
Contact Us
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Disclaimer
All Rights Reserved
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical,
photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData.

The data and analysis within this report is driven by GlobalData from its own primary and secondary research of public and proprietary
sources and does not necessarily represent the views of the company profiled.
The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings,
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Activision Blizzard Inc (ATVI)

Financial and Strategic SWOT Analysis Review

Report Code: GDTC27021FSA

Enterprise Value (million USD) 60,774

Source: Annual Report, Company Website, Primary and Secondary

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Section 4 – Appendix ....................................................................................................................................................................... 43

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Section 1 - About the Company

Telephone +1 310 2552000 No. of Employees 9,200

Fax +1 302 6365454 Fiscal Year End December

URL www.activisionblizzard.com/ Revenue (in USD Million) 7,500

Industry Media & Digital Entertainment,

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Activision Blizzard Inc - Key Employees

Name Job Title Board Level Since Age

Brian G. Kelly Chairman Executive Board 2013 57

Robert Corti Director Non Executive Board 2003 70

Tony Petitti President Sports and Senior Management 2020

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Activision Blizzard Inc - Key Employee Biographies

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Activision Blizzard Inc - Major Products and Services

Activision Blizzard Inc, Major Products and Services

Interactive Software Products

Sales Distribution Services

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Activision Blizzard Inc - History

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1979 Incorporation/Establishment The company was incorporated.

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Activision Blizzard Inc - Company Statement

Pointers To The Future

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Redefining Social Spaces

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Caring For Our People And Our Communities

Strong Foundation For The Future

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Focusing on the largest and most promising opportunities;

and Remaining disciplined in our commitment to deliver shareholder value.

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Activision Blizzard Inc - Locations And Subsidiaries

Other Locations & Subsidiaries

Activision Blizzard Inc, Subsidiaries

Midasplayer AB King.com (US) LLC

Blizzard Entertainment SAS King.com Ltd

Overwatch League LLC Sledgehammer Games Inc

Treyarch Corporation King.com Limited

Omniata Inc. Activision Publishing, Inc.

ATVI International SRL Activision Blizzard UK Limited

Blizzard Entertainment, Inc Massive Entertainment AB

King Digital Entertainment plc ATVI C.V.

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Section 2 – Company Analysis

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