Activision Blizzard, Inc. (ATVI): history, ownership, mission, how it works & makes money

A Brief History of Activision Blizzard, Inc.

Foundation and Early Years

Activision Blizzard, Inc. was formed in 2008 through the merger of Activision, founded in 1979, and Vivendi Games, which was established in 2000. The merger created one of the largest gaming companies in the world.

Key Developments

• 2008: Merger of Activision and Vivendi Games, resulting in Activision Blizzard.
• 2013: Launch of "Call of Duty: Ghosts," which generated over $1 billion in revenue within the first 24 hours.
• 2016: Acquisition of King Digital Entertainment for $5.9 billion, expanding into mobile gaming.
• 2020: Launch of "Call of Duty: Warzone," which quickly gained popularity, reaching over 100 million players by 2021.

Financial Performance

As of June 30, 2023, Activision Blizzard reported consolidated net revenues of $4.6 billion for the first half of the year, a 35% increase from $3.4 billion in the same period of 2022. Consolidated operating income increased by 69% to $1.4 billion compared to $817 million in 2022. The diluted earnings per share rose by 94% to $1.67 from $0.86 year-over-year.

Recent Developments and Market Position

In 2023, Activision Blizzard's market capitalization was approximately $69 billion as of June 30, 2023. The company continues to focus on key franchises such as "Call of Duty," "World of Warcraft," and "Candy Crush." The gaming industry has seen a shift towards digital sales, with 93% of revenues recognized over time through online functionality and in-game purchases.

Debt and Liquidity

As of June 30, 2023, Activision Blizzard had gross long-term debt of $3.7 billion and cash and cash equivalents totaling $13.2 billion. The company maintains a revolving credit facility with $1.5 billion available, which has not been drawn upon.

Future Outlook

With ongoing investments in game development and an expanding portfolio through acquisitions, Activision Blizzard aims to enhance its market position and continue delivering strong financial results in the coming years.

A Who Owns Activision Blizzard, Inc. (ATVI)

Major Shareholders

As of 2024, the ownership structure of Activision Blizzard, Inc. (ATVI) is characterized by a mix of institutional and individual shareholders. The largest shareholders include:

Recent Developments in Ownership

In January 2022, Microsoft announced its intention to acquire Activision Blizzard for $95.00 per share, which was finalized in October 2023. This acquisition resulted in Activision Blizzard becoming a wholly-owned subsidiary of Microsoft, effectively consolidating ownership under Microsoft's umbrella.

Stock Performance

Following the merger announcement, ATVI's stock experienced fluctuations. The stock price was approximately $95.00 per share at the time of the acquisition closure, reflecting a significant premium over pre-announcement levels.

Institutional Ownership

As of the last reporting period, institutional investors held approximately 80% of the shares of Activision Blizzard, reflecting the company's attractiveness to large investment firms.

Executive Ownership

Executive ownership is also notable, with key executives holding a significant number of shares as part of their compensation packages.

Conclusion on Ownership Structure

The ownership of Activision Blizzard, Inc. is predominantly in the hands of Microsoft following its acquisition. Institutional investors also play a significant role in the company’s ownership structure, while executive management holds a meaningful stake, aligning their interests with shareholders.

Activision Blizzard, Inc. (ATVI) Mission Statement

Current Mission Statement

Activision Blizzard, Inc. is committed to creating the most engaging and immersive gaming experiences for players worldwide. The company aims to deliver innovative content across its franchises while fostering a diverse and inclusive environment that empowers creativity and collaboration.

Financial Overview

As of June 30, 2023, Activision Blizzard reported significant financial growth. The consolidated net revenues increased to $2.2 billion, a rise of 34% compared to the same period in 2022. The consolidated operating income reached $583 million, reflecting a 72% increase year-over-year.

Segment Performance

Activision Blizzard operates through three primary segments: Activision, Blizzard, and King. For the three months ended June 30, 2023, the net revenues from these segments were as follows:

Monthly Active Users (MAUs)

As of June 30, 2023, the average monthly active users for each segment were:

Market Position and Future Outlook

Activision Blizzard's franchises, particularly Call of Duty, Warcraft, and Candy Crush, are critical to its revenue generation. In 2022, these franchises accounted for approximately 79% of the company’s consolidated net revenues. The company is also focused on expanding its reach into mobile gaming, with plans for new titles and adaptations of existing franchises to mobile platforms.

How Activision Blizzard, Inc. (ATVI) Works

Company Overview

Activision Blizzard, Inc., a leading interactive entertainment company, operates through its segments: Activision, Blizzard, and King. As of June 30, 2023, the company's consolidated net revenues reached $2.2 billion, representing a 34% increase compared to $1.6 billion for the same period in 2022.

Financial Performance

For the six months ended June 30, 2023, Activision Blizzard reported:

• Consolidated net revenues of $4.6 billion, up 35% from $3.4 billion in 2022.
• Consolidated operating income of $1.4 billion, a 69% increase from $0.8 billion in 2022.
• Diluted earnings per share increased to $1.67 from $0.86 in 2022, reflecting a 94% growth.
• Cash flows from operating activities approximated $1.2 billion, a 39% increase from $0.8 billion in 2022.

Revenue Breakdown

Activision Blizzard's revenues are generated from several sources, with a significant portion coming from in-game purchases and subscriptions. For Q2 2023, the revenue sources were as follows:

Geographic Revenue Distribution

As of June 30, 2023, the net revenues by geographic region were:

Deferred Revenues

As of June 30, 2023, the aggregate balance of deferred revenues was $1.9 billion, down from $2.1 billion at the end of 2022. This decrease reflects the recognition of revenues upon fulfillment of performance obligations.

Operating Expenses

For the six months ended June 30, 2023, the total costs and expenses were approximately $3.2 billion, comprising:

Market Position and Strategy

Activision Blizzard continues to leverage its strong franchises, including Call of Duty, Warcraft, and Candy Crush, which accounted for approximately 79% of consolidated net revenues in 2022. The company is also focused on expanding its mobile gaming presence and free-to-play models to enhance player engagement and revenue generation.

Debt and Financial Obligations

As of June 30, 2023, Activision Blizzard had $3.7 billion in gross unsecured senior notes outstanding, with a total net carrying amount of $3.6 billion. The company maintains a revolving credit facility of $1.5 billion, which has not been drawn as of the reporting date.

Player Engagement

As of June 30, 2023, Activision Blizzard reported average monthly active users (MAUs) of 356 million across its platforms, with a notable engagement in mobile gaming.

How Activision Blizzard, Inc. (ATVI) Makes Money

Revenue Streams

Activision Blizzard generates revenue through several key streams, primarily focusing on digital sales, in-game purchases, and subscriptions.

Digital Online Channels

For the three months ended June 30, 2023, net revenues from digital online channels amounted to $2,012 million, which is a significant increase from $1,474 million for the same period in 2022.

Retail Channels

Retail channel revenues for the same period were $81 million, up from $65 million in 2022.

In-Game and Subscription Revenues

In-game and subscription revenues accounted for $1,687 million during Q2 2023, compared to $1,340 million in Q2 2022. This segment continues to grow, reflecting the popularity of microtransactions and subscription models.

Consolidated Net Revenues

For the six months ended June 30, 2023, consolidated net revenues reached $4,590 million, an increase of 35% from $3,412 million in the same period in 2022.

Segment Performance

Activision Blizzard's revenue is largely driven by its major franchises, including Call of Duty, World of Warcraft, and Candy Crush. In 2022, these three franchises accounted for 79% of consolidated net revenues.

Operating Income

For the six months ended June 30, 2023, operating income was reported at $1,383 million, a 69% increase from $817 million in the previous year.

Cost Structure

The total costs and expenses for the six months ended June 30, 2023, were $3,207 million, compared to $2,595 million in 2022. This includes:

• Product costs: $252 million
• Software royalties and amortization: $207 million
• Game operations and distribution costs: $736 million
• Sales and marketing: $611 million
• General and administrative: $468 million

Monthly Active Users (MAUs)

As of June 30, 2023, Activision Blizzard reported the following average MAUs:

• Activision: 92 million
• Blizzard: 26 million
• King: 238 million
• Total: 356 million

Recent Developments

Activision Blizzard continues to expand its portfolio with new titles and live services, which are expected to enhance revenue generation. Key upcoming releases include mobile adaptations of existing franchises, targeting the growing mobile gaming market.