Activision Blizzard (ATVI)

Net Revenues

For the quarter ended March 31, 2009, net revenues from Activision, Blizzard, and Distribution segments increased compared to the same period in 2008. These increases were principally attributable to the following:

·                  As a result of the Business Combination, net revenues of $330 million from the businesses operated by Activision, Inc. prior to the Business Combination were included in the three months ended March 31, 2009, but not for the same period in 2008;

·                  The catalog sales of Guitar Hero World Tour and Call of Duty: World at War, the new releases of Guitar Hero: Metallica in North America, Monsters vs. Aliens worldwide, and Call of Duty: World at War map pack, and the catalog sales of Call of Duty: Modern Warfare;

·                  Sales of the second expansion pack of World of Warcraft: Wrath of the Lich King, which continues to be the #1 best selling PC title in dollars in the U.S. for the quarter ended March 31, 2009 according to the NPD Group; and

·                  As a result of the Business Combination, Distribution net revenues of $85 million were included in the three months ended March 31, 2009, but not for the same period in 2008.

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Net Revenues

        The following table details our consolidated net revenues by business segment and our publishing net revenues by territory for the years ended March 31, 2007 and 2006 (amounts in thousands):

        The increase in consolidated net revenues for fiscal 2007 was driven by the following:

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Strong performance of our North American publishing unit led to a year over year increase in net revenues of $43.3 million or 6%. In the third quarter fiscal 2007, we released a focused but high quality slate of titles, which resulted in strong consumer demand for our new releases in the third quarter, continuing reorders in the fourth quarter and strong price realization. In fiscal 2007, our major releases included Call of Duty 3, Guitar Hero 2, Marvel: Ultimate Alliance, Tony Hawk's Project 8, Over the Hedge, X-Men: Official Game, Shrek Smash N' Crash, Tony Hawk's Downhill Jam, Series of Poker Tournament of Champions, Pimp My Ride, and titles for our Cabela's History Channel and new Barbie franchises. In fiscal 2006, we released the following

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major releases: Doom 3 for the Xbox, Madagascar, Fantastic Four, Ultimate Spider-Man, X-Men Legends II, THAW, Call of Duty 2, Call of Duty 2: Big Red One, GUN, True Crime: New York City, Quake 4, Shrek SuperSlam, The Movies, Cabela's Dangerous Hunts 2, and World Series of Poker.

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An increase in net revenues from our distribution business due to a stronger release schedule for certain third-party publishers, higher revenues from hardware sales related to the launch of PS3 and Nintendo Wii, as well as ongoing sales of NDS and PSP, and the addition of a significant new customer in the second quarter fiscal 2007.



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Impact of the year over year strengthening of the Great Britain Pound ("GBP"), Euro ("EUR") and Australian Dollar ("AUD") in relation to the United States Dollar ("USD"). Foreign exchange rates increased reported net revenues by approximately $51.6 million or 4% for the year ended March 31, 2007. Excluding the impact of changing foreign currency rates, our consolidated net revenues remained about in line with prior year.

Partially offset by:

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A decrease in publishing net revenues from our European publishing operations primarily due to a more focused slate in fiscal 2007, and a decrease in our affiliate business as only one title, LucasArts' Star Wars Lego 2 was released in 2007, whereas two strong affiliate titles, LucasArts' Star Wars: Episode III Revenge of the Sith and LucasArts' Star Wars Battlefront II, were released in fiscal 2006.