Activision Blizzard facts for kids
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Headquarters in Santa Monica, California
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| Traded as | NASDAQ: ATVI (2008–2023) |
| Industry | Video games |
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| Founded | July 10, 2008 |
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US
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Key people
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| Products |
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| Revenue |  US$7.53 billion (2022) |
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Operating income
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US$1.67 billion (2022) |
| US$1.51 billion (2022) |
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| Total assets |  US$27.4 billion (2022) |
| Total equity | US$19.2 billion (2022) |
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Number of employees
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17,000 (2023) |
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| Subsidiaries |
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Activision Blizzard, Inc. is an American video game holding company based in Santa Monica, California. It was founded in July 2008 through the merger of Activision, Inc. (the publicly traded parent company of Activision Publishing) and Vivendi Games. Activision Blizzard currently includes five business units: Activision Publishing, Blizzard Entertainment, King, Major League Gaming, and Activision Blizzard Studios. Microsoft acquired the company on October 13, 2023.
The company owns and operates additional subsidiary studios, as part of Activision Publishing, including Treyarch, Infinity Ward, High Moon Studios, and Toys for Bob. Among major intellectual properties produced by Activision Blizzard are Call of Duty, Crash Bandicoot, Guitar Hero, Tony Hawk's, Spyro, Skylanders, World of Warcraft, StarCraft, Diablo, Hearthstone, Heroes of the Storm, Overwatch, and Candy Crush Saga. Under Blizzard Entertainment, it invested in esports initiatives around several of its games, most notably Overwatch and Call of Duty. Activision Blizzard's titles have broken a number of release records. As of March 2018[update], it was the largest game company in the Americas and Europe in terms of revenue and market capitalization.
Microsoft announced its intent to acquire Activision Blizzard for $68.7 billion on January 18, 2022. The acquisition was completed on October 13, 2023, making the company a division of Microsoft Gaming and making Microsoft the third largest gaming company (behind Tencent and Sony).
Contents
History
Background and formation (2007–2008)
The original Activision company was founded in 1979, as a third-party developer for games on the Atari Video Computer System. In 1988 the company expanded into non-gaming software and renamed itself Mediagenic. This venture was not successful, incurring heavy losses. In 1991 a group of investors led by Bobby Kotick bought the company. Kotick instituted a large restructuring to reduce debt, including renaming the company back to Activision and moving it to Santa Monica, California. By 1997 the company was profitable again. Kotick spent the next decade expanding Activision's products through acquisitions of around 25 studios. This resulted in Activision publishing several successful series of games, including Tony Hawk's, Call of Duty, and Guitar Hero. However, by around 2006, the popularity of massively multiplayer online (MMO) games started to grow. Such games provide a constant revenue stream to their publishers, rather than only a single purchase, making them a more valuable proposition. None of Activision's subsidiaries had an MMO or the capability to make one quickly. Activision was also facing tougher competition from companies like Electronic Arts, as well as slowdowns in sales of their key game series.
Around 2006, Kotick reached out to Jean-Bernard Lévy, the CEO of the French media conglomerate Vivendi. Vivendi at that time had the games division Vivendi Games, a holding company principally for Sierra Entertainment and Blizzard Entertainment. Kotick wanted to get access to Blizzard's World of Warcraft, a successful MMO, and suggested a means to acquire this to Lévy. Lévy instead offered that he would be willing to merge Vivendi Games with Activision, but only if Vivendi kept majority control of the merged company. According to those close to Kotick, Kotick was concerned about this offer as it would force him to cede control of Activision. However, after talking to Blizzard's CEO Mike Morhaime, Kotick recognized that Vivendi would be able to give them inroads into the growing video game market in China.
Kotick proposed the merger to Activision's board, which agreed to it in December 2007. The new company was to be named Activision Blizzard and would retain its central headquarters in California. Bobby Kotick of Activision was announced as the new president and CEO, while René Penisson of Vivendi was appointed chairman. The European Commission permitted the merger to take place in April 2008, approving that there weren't any EU antitrust issues in the merger deal. On July 8, 2008, Activision announced that stockholders had agreed to merge, and the deal closed the next day for an estimated transaction amount of US$18.9 billion.
Vivendi was the majority shareholder, with a 52% stake in the company. The rest of the shares were held by institutional and private investors, and were to be left open for trading on the NASDAQ stock market for a time under NASDAQ: ATVID, and subsequently as NASDAQ: ATVI (Activision's stock ticker). At this point, Lévy replaced René Penisson as chairman of Activision Blizzard. The merger was completed on July 10. While Blizzard retained its autonomy and corporate leadership in the merger, other Vivendi Games divisions such as Sierra ceased operation. With the merger, Kotick was quoted stating if a Sierra product did not meet Activision's requirements, they "won't likely be retained." Some of these games ultimately were published by other studios, including Ghostbusters: The Video Game, Brütal Legend, The Chronicles of Riddick: Assault on Dark Athena, and 50 Cent: Blood on the Sand. However, a number of Sierra's games such as Crash Bandicoot, Spyro, and Prototype were retained and are now published by Activision.
New titles and sales records (2009–2012)
In early 2010, the independent studio Bungie entered into a 10-year publishing agreement with Activision Blizzard. By the end of 2010, Activision Blizzard was the largest video games publisher in the world. The 2011 release of Activision Blizzard's Call of Duty: Modern Warfare 3 grossed $400 million in the US and UK alone in its first 24 hours, making it the biggest entertainment launch of all time. It was also the third consecutive year the Call of Duty series broke the biggest launch record; 2010's Call of Duty: Black Ops grossed $360 million on day one; and 2009's Call of Duty: Modern Warfare 2 brought in $310 million. Call of Duty: Black Ops III grossed $550 million in worldwide sales during its opening weekend in 2015, making it the biggest entertainment launch of the year.
In 2011, Activision Blizzard debuted its Skylanders franchise, which led to the press crediting the company with inventing and popularizing a new toys-to-life category. The first release Skylanders: Spyro's Adventure was nominated for two Toy Industry Association awards in 2011: "Game of the Year" and "Innovative Toy of the Year". Skylanders: Spyro's Adventure and its sequels were released for major consoles and PC, and many were released on mobile devices as well.
Split from Vivendi and growth (2013–2014)
On July 25, 2013, Activision Blizzard announced the purchase of 429 million shares from owner Vivendi for $5.83 billion, dropping the shareholder from a 63% stake to 11.8% by the end of the deal in September. At the conclusion of the deal, Vivendi was no longer Activision Blizzard's parent company, and Activision Blizzard became an independent company as a majority of the shares became owned by the public. Bobby Kotick and Brian Kelly retained a 24.4% stake in the company overall. In addition, Kotick remained the president and CEO, with Brian Kelly taking over as chairman. On October 12, 2013, shortly after approval from the Delaware Supreme Court, the company completed the buyback, along the lines of the original plan. Vivendi sold half its remaining stake on May 22, 2014, reducing its ownership to 5.8%. and completely exited two years later.
Activision Blizzard released a new title, Destiny, on September 9, 2014. The game made over $500 million in retail sales on the first day of release, setting a record for the biggest first day launch of a new gaming franchise. On November 5, 2013, the company released Call of Duty: Ghosts, which was written by screenwriter Stephen Gaghan. On its first release day the game sold $1 billion into retail. In 2014, Activision Blizzard was the fifth largest gaming company by revenue worldwide, with total assets of US$14.746 billion and total equity estimated at US$7.513 billion.
S&P 500 and new divisions (2015–2021)
Activision Blizzard joined the S&P 500 stock index on August 28, 2015, becoming one of only two companies on the list related to gaming, alongside Electronic Arts. The company released the next iteration of the Skylanders franchise in September 2015, which added vehicles to the "toys to life" category. On September 15, 2015, Activision and Bungie released Destiny: The Taken King, the follow-up to the Destiny saga. Two days later, Sony announced that the game broke the record for the most downloaded day-one game in PlayStation history, in terms of both total players and peak online concurrency.
Activision Blizzard acquired social gaming company King, creator of casual game Candy Crush Saga, for $5.9 billion in November 2015.
In November 2015, Activision Blizzard announced the formation of Activision Blizzard Studios, a film production arm that would produce films and television series based on Activision Blizzard's franchises. The outfit is co-headed by producer Stacey Sher and former The Walt Disney Company executive Nick van Dyk.
In June 2017, Activision Blizzard joined the Fortune 500 becoming the third gaming company in history to make the list after Atari and Electronic Arts.
In its 2018 fiscal year earnings call to shareholders in February 2019, Kotick stated that while the company had seen a record year in revenue, they would be laying off around 775 people or around 8% of their workforce in non-management divisions, "de-prioritizing initiatives that are not meeting expectations and reducing certain non-development and administrative-related costs across the business", according to Kotick. Kotick stated that they plan to put more resources towards their development teams and focus on esports, Battle.net services, and the publisher's core games which include Candy Crush, Call of Duty, Overwatch, Warcraft, Diablo, and Hearthstone. Prior to this, Activision Blizzard and Bungie agreed to terminate their distribution deal with Destiny 2 as it was not bringing in expected revenue for Activision, with Bungie otherwise retaining all rights to Destiny. This transaction allowed Activision Blizzard to report US$164 million as part of its 2018 fiscal year filings.
The company announced that Daniel Alegre would replace Coddy Johnson as president of Activision Blizzard effective April 7, 2020, with Johnson transitioning to special advisory role.
During the second quarter of 2020, the company's net revenues from digital channels reached $1.44bn due to the growing demand for online games driven by COVID-19 lockdowns. By January 2021, the company's net value was estimated to be $72 billion based on its stock trading price due to the ongoing demand for video games from the COVID-19 pandemic.
The Public Investment Fund of Saudi Arabia acquired 14.9 million shares of Activision Blizzard, valued at $1.4 billion, in February 2021.
In April 2021, Fernando Machado, former Brazilian executive at Burger King, joined the company as chief marketing officer (CMO). The company also announced in April 2021 that Kotick will remain CEO through April 2023, through Kotick agreed to take a 50% cut of his pay, equal to $875,000. Kotick will remain eligible to receive annual bonuses, and while he agreed to reduce his target bonus by 50% as well, he potentially can earn up to 200% of his base pay based on the company's performance.
Corporate structure
Activision Blizzard is divided into three key business segments:
- Activision Publishing, which handles the development, production, and distribution of video games from its subsidiary studios. It also houses the Call of Duty League.
- Blizzard Entertainment, which handles the development, production, and distribution of Blizzard's games. It also maintains Battle.net, organizes BlizzCon, and houses the company's esports activities including MLG and the Overwatch League.
- King, which handles the development and distribution of its mobile games.
There are also two non-reporting segments within Activision Blizzard. Activision Blizzard Studios oversees the production of film and television entertainment based on the company's properties. Activision Blizzard Distribution provides logistical support for Activision Blizzard's distribution within Europe.
Esports initiatives
Activision Blizzard owns the Call of Duty and StarCraft franchises, both of which have been popular as esports. On October 21, 2015, Activision Blizzard announced the upcoming establishment of a new e-sports division. Named Activision Blizzard Media Networks, the division is led by sports executive Steve Bornstein and Major League Gaming (MLG) co-founder Mike Sepso, with assets from the acquisition of the now defunct IGN Pro League. Bornstein was appointed the new division's chairman. On December 31, 2015, it was reported that "substantially all" of Major League Gaming's assets would be acquired by Activision Blizzard. The New York Times reported that the acquisition was intended to bolster Activision Blizzard's push into e-sports, as well as its plan to develop an e-sports cable channel. Reports indicated that MLG would be shuttered and that the majority of the purchase price would go towards paying off the company's debt. Activision Blizzard acquired MLG on January 4, 2016 for $46 million.
In November 2016, Blizzard Entertainment, a subsidiary of Activision Blizzard, announced the launch of Overwatch League, a professional video gaming league. The league's first season began during the second half of 2017 with 12 teams. The league's structure is based on traditional sports structures, including recruiting traditional sports executives as team owners, such as Robert Kraft, owner of the New England Patriots, and Jeff Wilpon, COO of the New York Mets.
The inaugural Overwatch Grand Finals was played at the Barclays Center in Brooklyn in July 2018 and attracted 10.8 million viewers worldwide. The league hopes to have 18 teams competing during the second season in 2019, with the ultimate goal of 28 teams across the world.
In 2018, Activision Blizzard signed a multi-year deal with The Walt Disney Company to stream Overwatch League games on both ESPN and Disney XD cable channels. The company also secured an exclusive multi-year deal with Google to stream all subsequent Activision Blizzard esports events, including Call of Duty and Overwatch events, through YouTube, and to use Google's cloud services for its game hosting infrastructure; this came after a prior two-year deal with Twitch for the Overwatch League had concluded. The deal with YouTube was estimated to be valued at US$160 million, double what it had with Twitch.
Call of Duty Endowment
Since 2009, when Kotick launched Call of Duty Endowment (CODE), over 50,000 veterans have been placed in high-quality jobs. In 2013 CODE started the "Seal of Distinction" program, which recognizes non-profit organizations that are successful in placing veterans in good jobs. Winners receive a $30,000 grant to use in their veteran job placement activities. The goal of CODE is to help 100,000 US and UK veterans find high-quality jobs by 2024. The endowment helps soldiers transition to civilian careers after their military service by funding nonprofit organizations and raising awareness of the value veterans bring to the workplace.
See also
In Spanish: Activision Blizzard para niños
- Lists of video game companies
- List of video game publishers
