Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 22, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-15839 | |
Entity Registrant Name | ACTIVISION BLIZZARD, INC. | |
Entity Central Index Key | 0000718877 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-4803544 | |
Entity Address, Address Line One | 3100 Ocean Park Boulevard | |
Entity Address, City or Town | Santa Monica, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90405 | |
City Area Code | 310 | |
Local Phone Number | 255-2000 | |
Title of 12(b) Security | Common Stock, par value $0.000001 per share | |
Trading Symbol | ATVI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 772,857,185 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 7,415 | $ 5,794 |
Accounts receivable, net of allowances of $88 and $132, at September 30, 2020 and December 31, 2019, respectively | 619 | 848 |
Software development | 398 | 322 |
Other current assets | 570 | 328 |
Total current assets | 9,002 | 7,292 |
Software development | 145 | 54 |
Property and equipment, net | 211 | 253 |
Deferred income taxes, net | 1,287 | 1,293 |
Other assets | 699 | 658 |
Intangible assets, net | 469 | 531 |
Goodwill | 9,764 | 9,764 |
Total assets | 21,577 | 19,845 |
Current liabilities: | ||
Accounts payable | 224 | 292 |
Deferred revenues | 1,108 | 1,375 |
Accrued expenses and other liabilities | 855 | 1,248 |
Total current liabilities | 2,187 | 2,915 |
Long-term debt, net | 3,604 | 2,675 |
Deferred income taxes, net | 480 | 505 |
Other liabilities | 924 | 945 |
Total liabilities | 7,195 | 7,040 |
Commitments and contingencies (Note 16) | ||
Shareholders’ equity: | ||
Common stock, $0.000001 par value, 2,400,000,000 shares authorized, 1,201,482,888 and 1,197,436,644 shares issued at September 30, 2020 and December 31, 2019, respectively | 0 | 0 |
Additional paid-in capital | 11,395 | 11,174 |
Less: Treasury stock, at cost, 428,676,471 shares at September 30, 2020 and December 31, 2019 | (5,563) | (5,563) |
Retained earnings | 9,183 | 7,813 |
Accumulated other comprehensive loss | (633) | (619) |
Total shareholders’ equity | 14,382 | 12,805 |
Total liabilities and shareholders’ equity | $ 21,577 | $ 19,845 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance | $ 88 | $ 132 |
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized (in shares) | 2,400,000,000 | 2,400,000,000 |
Common stock, shares issued (in shares) | 1,201,482,888 | 1,197,436,644 |
Treasury stock, shares (in shares) | 428,676,471 | 428,676,471 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net revenues | ||||
Net revenues | $ 1,954 | $ 1,282 | $ 5,674 | $ 4,503 |
Cost of revenues—product sales and subscription, licensing, and other revenues: | ||||
Product development | 274 | 210 | 802 | 702 |
Sales and marketing | 238 | 182 | 722 | 580 |
General and administrative | 186 | 177 | 529 | 527 |
Restructuring and related costs | 9 | 24 | 39 | 104 |
Total costs and expenses | 1,176 | 1,035 | 3,535 | 3,350 |
Operating income | 778 | 247 | 2,139 | 1,153 |
Interest and other expense (income), net (Note 12) | 25 | (2) | 55 | (33) |
Loss on extinguishment of debt | 31 | 0 | 31 | 0 |
Income before income tax expense | 722 | 249 | 2,053 | 1,186 |
Income tax expense | 118 | 45 | 365 | 208 |
Net income | $ 604 | $ 204 | $ 1,688 | $ 978 |
Earnings per common share | ||||
Basic (in dollars per share) | $ 0.78 | $ 0.27 | $ 2.19 | $ 1.28 |
Diluted (in dollars per share) | $ 0.78 | $ 0.26 | $ 2.17 | $ 1.27 |
Weighted-average number of shares outstanding | ||||
Basic (in shares) | 772 | 767 | 771 | 766 |
Diluted (in shares) | 779 | 771 | 777 | 770 |
Product sales | ||||
Net revenues | ||||
Net revenues | $ 408 | $ 260 | $ 1,484 | $ 1,276 |
Product costs | ||||
Cost of revenues—product sales and subscription, licensing, and other revenues: | ||||
Cost of revenues | 101 | 137 | 357 | 388 |
Software royalties, amortization, and intellectual property licenses | ||||
Cost of revenues—product sales and subscription, licensing, and other revenues: | ||||
Cost of revenues | 37 | 9 | 152 | 171 |
Subscription, licensing, and other revenues | ||||
Net revenues | ||||
Net revenues | 1,546 | 1,022 | 4,190 | 3,227 |
Game operations and distribution costs | ||||
Cost of revenues—product sales and subscription, licensing, and other revenues: | ||||
Cost of revenues | 290 | 246 | 819 | 714 |
Software royalties, amortization, and intellectual property licenses | ||||
Cost of revenues—product sales and subscription, licensing, and other revenues: | ||||
Cost of revenues | $ 41 | $ 50 | $ 115 | $ 164 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 604 | $ 204 | $ 1,688 | $ 978 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment, net of tax | 21 | (6) | 11 | (5) |
Unrealized gains (losses) on forward contracts designated as hedges, net of tax | (18) | 10 | (26) | 4 |
Unrealized gains (losses) on investments, net of tax | (2) | (3) | 1 | (5) |
Total other comprehensive income (loss) | 1 | 1 | (14) | (6) |
Comprehensive income | $ 605 | $ 205 | $ 1,674 | $ 972 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Cash flows from operating activities: | |||
Net income | $ 1,688 | $ 978 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Deferred income taxes | (13) | 100 | |
Depreciation and amortization | 152 | 246 | |
Non-cash operating lease cost | 48 | 49 | |
Amortization of capitalized software development costs and intellectual property licenses | [1] | 141 | 163 |
Share-based compensation expense | [2] | 138 | 127 |
Other | 39 | 9 | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 225 | 635 | |
Software development and intellectual property licenses | (300) | (186) | |
Other assets | (206) | (48) | |
Deferred revenues | (322) | (809) | |
Accounts payable | (71) | 22 | |
Accrued expenses and other liabilities | (407) | (373) | |
Net cash provided by operating activities | 1,112 | 913 | |
Cash flows from investing activities: | |||
Proceeds from maturities of available-for-sale investments | 36 | 153 | |
Purchases of available-for-sale investments | (158) | 0 | |
Capital expenditures | (56) | (79) | |
Other investing activities | 0 | 5 | |
Net cash provided by (used in) investing activities | (178) | 79 | |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock to employees | 114 | 87 | |
Tax payment related to net share settlements on restricted stock units | (41) | (55) | |
Dividends paid | (316) | (283) | |
Proceeds from issuance of debt, net of discounts | 1,994 | 0 | |
Repayment of long-term debt | (1,050) | 0 | |
Payment of financing costs | (20) | 0 | |
Premium payment for early redemption of notes | (28) | 0 | |
Net cash provided by (used in) financing activities | 653 | (251) | |
Effect of foreign exchange rate changes on cash and cash equivalents | 32 | (24) | |
Net increase in cash and cash equivalents and restricted cash | 1,619 | 717 | |
Cash and cash equivalents and restricted cash at beginning of period | 5,798 | 4,229 | |
Cash and cash equivalents and restricted cash at end of period | $ 7,417 | $ 4,946 | |
[1] | Excludes deferral and amortization of share-based compensation expense. | ||
[2] | Includes the net effects of capitalization, deferral, and amortization of share-based compensation expense. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2018 | $ 11,392 | $ 0 | $ (5,563) | $ 10,963 | $ 6,593 | $ (601) | ||
Balance (in shares) at Dec. 31, 2018 | 1,192 | 429 | ||||||
Components of comprehensive income: | ||||||||
Net income | 447 | 447 | ||||||
Other comprehensive income (loss) | (1) | (1) | ||||||
Issuance of common stock pursuant to employee stock options | 30 | 30 | ||||||
Issuance of common stock pursuant to employee stock options (in shares) | 2 | |||||||
Issuance of common stock pursuant to restricted stock units | 0 | |||||||
Issuance of common stock pursuant to restricted stock units (in shares) | 2 | |||||||
Restricted stock surrendered for employees’ tax liability | (45) | (45) | ||||||
Restricted stock surrendered for employees' tax liability (in shares) | (1) | |||||||
Share-based compensation expense related to employee stock options and restricted stock units | 56 | 56 | ||||||
Dividends ($0.41 and $0.37 per common share) | (283) | (283) | ||||||
Ending balance at Mar. 31, 2019 | 11,596 | $ 0 | $ (5,563) | 11,004 | 6,757 | (602) | ||
Balance (in shares) at Mar. 31, 2019 | 1,195 | 429 | ||||||
Beginning balance at Dec. 31, 2018 | 11,392 | $ 0 | $ (5,563) | 10,963 | 6,593 | (601) | ||
Balance (in shares) at Dec. 31, 2018 | 1,192 | 429 | ||||||
Components of comprehensive income: | ||||||||
Net income | 978 | |||||||
Other comprehensive income (loss) | (6) | |||||||
Ending balance at Sep. 30, 2019 | 12,235 | $ 0 | $ (5,563) | 11,116 | 7,289 | (607) | ||
Balance (in shares) at Sep. 30, 2019 | 1,197 | 429 | ||||||
Beginning balance at Mar. 31, 2019 | 11,596 | $ 0 | $ (5,563) | 11,004 | 6,757 | (602) | ||
Balance (in shares) at Mar. 31, 2019 | 1,195 | 429 | ||||||
Components of comprehensive income: | ||||||||
Net income | 328 | 328 | ||||||
Other comprehensive income (loss) | (6) | (6) | ||||||
Issuance of common stock pursuant to employee stock options | 28 | 28 | ||||||
Issuance of common stock pursuant to employee stock options (in shares) | 1 | |||||||
Restricted stock surrendered for employees’ tax liability | (4) | (4) | ||||||
Share-based compensation expense related to employee stock options and restricted stock units | 35 | 35 | ||||||
Ending balance at Jun. 30, 2019 | 11,977 | $ 0 | $ (5,563) | 11,063 | 7,085 | (608) | ||
Balance (in shares) at Jun. 30, 2019 | 1,196 | 429 | ||||||
Components of comprehensive income: | ||||||||
Net income | 204 | 204 | ||||||
Other comprehensive income (loss) | 1 | 1 | ||||||
Issuance of common stock pursuant to employee stock options | 29 | 29 | ||||||
Issuance of common stock pursuant to employee stock options (in shares) | 1 | |||||||
Restricted stock surrendered for employees’ tax liability | (8) | (8) | ||||||
Share-based compensation expense related to employee stock options and restricted stock units | 32 | 32 | ||||||
Ending balance at Sep. 30, 2019 | 12,235 | $ 0 | $ (5,563) | 11,116 | 7,289 | (607) | ||
Balance (in shares) at Sep. 30, 2019 | 1,197 | 429 | ||||||
Beginning balance at Dec. 31, 2019 | 12,805 | $ (3) | $ 0 | $ (5,563) | 11,174 | 7,813 | $ (3) | (619) |
Balance (in shares) at Dec. 31, 2019 | 1,197 | 429 | ||||||
Components of comprehensive income: | ||||||||
Net income | 505 | 505 | ||||||
Other comprehensive income (loss) | (9) | (9) | ||||||
Issuance of common stock pursuant to employee stock options | 27 | 27 | ||||||
Issuance of common stock pursuant to employee stock options (in shares) | 1 | |||||||
Issuance of common stock pursuant to restricted stock units | 0 | |||||||
Issuance of common stock pursuant to restricted stock units (in shares) | 1 | |||||||
Restricted stock surrendered for employees’ tax liability | (31) | (31) | ||||||
Share-based compensation expense related to employee stock options and restricted stock units | 43 | 43 | ||||||
Dividends ($0.41 and $0.37 per common share) | (316) | (316) | ||||||
Ending balance at Mar. 31, 2020 | 13,021 | $ 0 | $ (5,563) | 11,213 | 7,999 | (628) | ||
Balance (in shares) at Mar. 31, 2020 | 1,199 | 429 | ||||||
Beginning balance at Dec. 31, 2019 | 12,805 | $ (3) | $ 0 | $ (5,563) | 11,174 | 7,813 | $ (3) | (619) |
Balance (in shares) at Dec. 31, 2019 | 1,197 | 429 | ||||||
Components of comprehensive income: | ||||||||
Net income | 1,688 | |||||||
Other comprehensive income (loss) | (14) | |||||||
Ending balance at Sep. 30, 2020 | 14,382 | $ 0 | $ (5,563) | 11,395 | 9,183 | (633) | ||
Balance (in shares) at Sep. 30, 2020 | 1,201 | 429 | ||||||
Beginning balance at Mar. 31, 2020 | 13,021 | $ 0 | $ (5,563) | 11,213 | 7,999 | (628) | ||
Balance (in shares) at Mar. 31, 2020 | 1,199 | 429 | ||||||
Components of comprehensive income: | ||||||||
Net income | 580 | 580 | ||||||
Other comprehensive income (loss) | (6) | (6) | ||||||
Issuance of common stock pursuant to employee stock options | 44 | 44 | ||||||
Issuance of common stock pursuant to employee stock options (in shares) | 1 | |||||||
Restricted stock surrendered for employees’ tax liability | (3) | (3) | ||||||
Share-based compensation expense related to employee stock options and restricted stock units | 46 | 46 | ||||||
Ending balance at Jun. 30, 2020 | 13,682 | $ 0 | $ (5,563) | 11,300 | 8,579 | (634) | ||
Balance (in shares) at Jun. 30, 2020 | 1,200 | 429 | ||||||
Components of comprehensive income: | ||||||||
Net income | 604 | 604 | ||||||
Other comprehensive income (loss) | 1 | 1 | ||||||
Issuance of common stock pursuant to employee stock options | 43 | 43 | ||||||
Issuance of common stock pursuant to employee stock options (in shares) | 1 | |||||||
Restricted stock surrendered for employees’ tax liability | (6) | (6) | ||||||
Share-based compensation expense related to employee stock options and restricted stock units | 58 | 58 | ||||||
Ending balance at Sep. 30, 2020 | $ 14,382 | $ 0 | $ (5,563) | $ 11,395 | $ 9,183 | $ (633) | ||
Balance (in shares) at Sep. 30, 2020 | 1,201 | 429 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares | Feb. 06, 2020 | Feb. 12, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends per common share (in dollars per share) | $ 0.41 | $ 0.37 | $ 0.41 | $ 0.37 |
Description of Business and Bas
Description of Business and Basis of Consolidation and Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Consolidation and Presentation | Description of Business and Basis of Consolidation and Presentation Activision Blizzard, Inc. is a leading global developer and publisher of interactive entertainment content and services. We develop and distribute content and services on video game consoles, personal computers (“PC”s), and mobile devices. We also operate esports leagues and offer digital advertising within our content. The terms “Activision Blizzard,” the “Company,” “we,” “us,” and “our” are used to refer collectively to Activision Blizzard, Inc. and its subsidiaries. The Company was originally incorporated in California in 1979 and was reincorporated in Delaware in December 1992. In connection with the 2008 business combination by and among the Company (then known as Activision, Inc.), Vivendi S.A, and Vivendi Games, Inc., pursuant to which we acquired Blizzard Entertainment, Inc. (“Blizzard”), we were renamed Activision Blizzard, Inc. On February 23, 2016, we acquired King Digital Entertainment plc ("King") by purchasing all of its outstanding shares. Our Segments Based upon our organizational structure, we conduct our business through three reportable segments, as follows: (i) Activision Publishing, Inc. Activision Publishing, Inc. (“Activision”) is a leading global developer and publisher of interactive software products and entertainment content, particularly for the console platform. Activision primarily delivers content through retail and digital channels, including full-game and in-game sales, as well as by licensing software to third-party or related-party companies that distribute Activision products. Activision develops, markets, and sells products primarily based on our internally developed intellectual properties. Activision also includes the activities of the Call of Duty League TM , a global professional esports league with city-based teams. Activision’s key product franchise is Call of Duty ® , a first-person action title for the console, PC, and mobile platforms. (ii) Blizzard Entertainment, Inc. Blizzard is a leading global developer and publisher of interactive software products and entertainment content, particularly for the PC platform. Blizzard primarily delivers content through retail and digital channels, including subscription, full-game, and in-game sales, as well as by licensing software to third-party or related-party companies that distribute Blizzard products. Blizzard also maintains a proprietary online gaming service, Blizzard Battle.net ® , which facilitates digital distribution of Blizzard content and selected Activision content, online social connectivity, and the creation of user-generated content. Blizzard also includes the activities of the Overwatch League TM , a global professional esports league with city-based teams. Blizzard’s key product franchises include: World of Warcraft ® , a subscription-based massive multi-player online role-playing game for the PC platform; Diablo ® , an action role-playing franchise for the PC and console platforms; Hearthstone ® , an online collectible card franchise for the PC and mobile platforms; and Overwatch ® , a team-based first-person action title for the PC and console platforms. (iii) King Digital Entertainment King is a leading global developer and publisher of interactive entertainment content and services, primarily for the mobile platform. King also distributes its content and services on the PC platform, primarily via Facebook. King’s games are free to play; however, players can acquire in-game items, either with virtual currency or real currency, and we continue to focus on in-game advertising as a growing source of additional revenue. King’s key product franchise is Candy Crush™, which features “match three” games for the mobile and PC platforms. Other We also engage in other businesses that do not represent reportable segments, including the Activision Blizzard Distribution (“Distribution”) business, which consists of operations in Europe that provide warehousing, logistics, and sales distribution services to third-party publishers of interactive entertainment software, our own publishing operations, and manufacturers of interactive entertainment hardware. Basis of Consolidation and Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim reporting. Accordingly, certain notes or other information that are normally required by U.S. GAAP have been condensed or omitted if they substantially duplicate the disclosures contained in our annual audited consolidated financial statements. Additionally, the year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. Accordingly, the unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Generally, making these estimates and developing our assumptions requires consideration of forecasted information, which, in context of the COVID-19 pandemic, involves additional uncertainty. While there was no material impact to our estimates in the current period, in future periods, facts and circumstances (including, without limitation, the impact of the ongoing global COVID-19 pandemic) could change and impact our estimates. Additionally, actual results could differ from these estimates and assumptions. In the opinion of management, all adjustments considered necessary for the fair statement of our financial position and results of operations in accordance with U.S. GAAP (consisting of normal recurring adjustments) have been included in the accompanying unaudited condensed consolidated financial statements. The accompanying condensed consolidated financial statements include the accounts and operations of the Company. All intercompany accounts and transactions have been eliminated. Certain reclassifications have been made to prior-year amounts to conform to the current period presentation. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements Cloud Computing Arrangements In August 2018, the Financial Accounting Standards Board (“FASB”) issued new guidance related to a customer’s accounting for implementation costs incurred in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract. The new guidance requires customers to capitalize implementation costs for these arrangements by applying the same criteria that are utilized for existing internal-use software guidance. The capitalized costs are required to be amortized over the associated term of the arrangement, generally on a straight-line basis, with amortization of these costs presented in the same financial statement line item as other costs associated with the arrangement. We adopted the new standard under a prospective approach during the first quarter of 2020 and it did not have a material impact on our condensed consolidated financial statements. Goodwill In January 2017, the FASB issued new guidance that eliminates Step 2 from the goodwill impairment test. Instead, if an entity forgoes a Step 0 test, that entity will be required to perform its annual or interim goodwill impairment test by (1) comparing the fair value of a reporting unit, as determined in Step 1 from the goodwill impairment test, with its carrying amount and (2) recognizing an impairment charge, if any, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. We adopted the new standard under a prospective approach during the first quarter of 2020 and it did not have a material impact on our condensed consolidated financial statements. Financial Instruments - Credit Losses In June 2016, the FASB issued new guidance related to accounting for credit losses on financial instruments. The update replaces the existing incurred loss impairment model with a methodology that reflects a current expected credit losses model which requires the use of historical and forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will generally result in earlier recognition of credit losses. We adopted the new standard under a modified retrospective basis, with the cumulative effect of adoption recorded as an adjustment to retained earnings during the first quarter of 2020. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Simplifying the Accounting for Income Taxes In December 2019, the FASB issued new guidance which is intended to simplify various aspects of accounting for income taxes by removing certain exceptions to the general principles in Topic 740 f or recognizing deferred taxes for investments, performing an intraperiod allocation and calculating income taxes in interim periods . The amendment also clarifies and amends certain areas of existing guidance to reduce complexity and improve consistency in the application of Topic 740. The new standard is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. Generally, the topics must be applied prospectively upon adoption, with the exception of certain topics which are required to be applied on a retrospective or modified retrospective basis. We are evaluating the impact, if any, of adopting this new accounting guidance on our financial statements. |
Software Development and Intell
Software Development and Intellectual Property Licenses | 9 Months Ended |
Sep. 30, 2020 | |
Software Development Costs and Intellectual Property Licenses | |
Software Development and Intellectual Property Licenses | Software Development and Intellectual Property Licenses The following table summarizes the components of our capitalized software development costs (amounts in millions): At September 30, 2020 At December 31, 2019 Internally-developed software costs $ 510 $ 345 Payments made to third-party software developers 33 31 Total software development costs $ 543 $ 376 As of both September 30, 2020 and December 31, 2019, capitalized intellectual property licenses were not material. Amortization of capitalized software development costs and intellectual property licenses was as follows (amounts in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Amortization of capitalized software development costs and intellectual property licenses $ 37 $ 11 $ 149 $ 175 |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net Intangible assets, net, consist of the following (amounts in millions): At September 30, 2020 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: Internally-developed franchises 3 - 11 years $ 1,154 $ (1,139) $ 15 Developed software 2 - 5 years 601 (600) 1 Trade names 7 years 54 (36) 18 Other 1 - 10 years 19 (17) 2 Total definite-lived intangible assets $ 1,828 $ (1,792) $ 36 Acquired indefinite-lived intangible assets: Activision trademark Indefinite 386 Acquired trade names Indefinite 47 Total indefinite-lived intangible assets $ 433 Total intangible assets, net $ 469 At December 31, 2019 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: Internally-developed franchises 3 - 11 years $ 1,154 $ (1,105) $ 49 Developed software 2 - 5 years 601 (579) 22 Trade names 7 - 10 years 54 (30) 24 Other 1 - 15 years 19 (16) 3 Total definite-lived intangible assets $ 1,828 $ (1,730) $ 98 Acquired indefinite-lived intangible assets: Activision trademark Indefinite 386 Acquired trade names Indefinite 47 Total indefinite-lived intangible assets $ 433 Total intangible assets, net $ 531 Amortization expense of our intangible assets was $16 million and $62 million for the three and nine months ended September 30, 2020, respectively. Amortization expense of our intangible assets was $50 million and $152 million for the three and nine months ended September 30, 2019, respectively. At September 30, 2020, future amortization of definite-lived intangible assets is estimated as follows (amounts in millions): For the years ending December 31, 2020 (remaining three months) $ 17 2021 10 2022 7 2023 1 2024 — Thereafter 1 Total $ 36 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The carrying amount of goodwill by reportable segment at both September 30, 2020 and December 31, 2019 was as follows (amounts in millions): Activision Blizzard King Total Goodwill $ 6,898 $ 190 $ 2,676 $ 9,764 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The FASB literature regarding fair value measurements for certain assets and liabilities establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of “observable inputs” and minimize the use of “unobservable inputs.” The three levels of inputs used to measure fair value are as follows: • Level 1—Quoted prices in active markets for identical assets or liabilities; • Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data; and • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. Fair Value Measurements on a Recurring Basis The table below segregates all of our financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date (amounts in millions): Fair Value Measurements at September 30, 2020 Using As of September 30, 2020 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Balance Sheet Classification Financial Assets: Recurring fair value measurements: Money market funds $ 7,121 $ 7,121 $ — $ — Cash and cash equivalents Foreign government treasury bills 33 33 — — Cash and cash equivalents U.S. treasuries and government agency securities 187 187 — — Other current assets Total recurring fair value measurements $ 7,341 $ 7,341 $ — $ — Financial Liabilities: Foreign currency forward contracts not designated as hedges $ (1) $ — $ (1) $ — Accrued expenses and other liabilities Foreign currency forward contracts designated as hedges $ (18) $ — $ (18) $ — Accrued expenses and other liabilities Fair Value Measurements at December 31, 2019 Using As of December 31, 2019 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Balance Sheet Classification Financial Assets: Recurring fair value measurements: Money market funds $ 5,320 $ 5,320 $ — $ — Cash and cash equivalents Foreign government treasury bills 37 37 — — Cash and cash equivalents U.S. treasuries and government agency securities 65 65 — — Other current assets Total recurring fair value measurements $ 5,422 $ 5,422 $ — $ — Financial Liabilities: Foreign currency forward contracts not designated as hedges $ (2) $ — $ (2) $ — Accrued expenses and other liabilities Foreign currency forward contracts designated as hedges $ (2) $ — $ (2) $ — Accrued expenses and other liabilities Foreign Currency Forward Contracts Foreign Currency Forward Contracts Designated as Hedges (“Cash Flow Hedges”) The total gross notional amounts and fair values of our Cash Flow Hedges, all of which have remaining maturities of 13 months or less as of September 30, 2020, are as follows (amounts in millions): As of September 30, 2020 As of December 31, 2019 Notional amount Fair value gain (loss) Notional amount Fair value gain (loss) Foreign Currency: Buy USD, Sell Euro $ 608 $ (18) $ 350 $ (2) The amount of pre-tax net realized gains (losses) associated with our Cash Flow Hedges that were reclassified out of “Accumulated other comprehensive income (loss)” and into earnings was as follows (amounts in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, Statement of Operations Classification 2020 2019 2020 2019 Cash Flow Hedges $ (5) $ 7 $ 7 $ 24 Net revenues Foreign Currency Forward Contracts Not Designated as Hedges The gross notional amounts and fair values of our foreign currency forward contracts not designated as hedges are as follows (amounts in millions): As of September 30, 2020 As of December 31, 2019 Notional amount Fair value gain (loss) Notional amount Fair value gain (loss) Foreign Currency: Buy USD, Sell GBP $ 61 $ (1) $ 25 $ (2) For the three and nine months ended September 30, 2020 and 2019, pre-tax net gains (losses) associated with these forward contracts were recorded in “General and administrative expenses” and were not material. |
Deferred revenues
Deferred revenues | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenues | Deferred revenues We record deferred revenues when cash payments are received or due in advance of the fulfillment of our associated performance obligations. The aggregate of the current and non-current balances of deferred revenues as of December 31, 2019 and September 30, 2020, were $1.4 billion and $1.1 billion, respectively. For the nine months ended September 30, 2020, the additions to our deferred revenues balance were primarily due to cash payments received or due in advance of satisfying our performance obligations, while the reductions to our deferred revenues balance were primarily due to the recognition of revenues upon fulfillment of our performance obligations, all of which were in the ordinary course of business. During the three and nine months ended September 30, 2020, $54 million and $1.3 billion of revenues, respectively, were recognized that were included in the deferred revenues balance at December 31, 2019. During the three and nine months ended September 30, 2019, $0.1 billion and $1.4 billion of revenues, respectively, were recognized that were included in the deferred revenues balance at December 31, 2018. As of September 30, 2020, the aggregate amount of contracted revenues allocated to our unsatisfied performance obligations was $1.9 billion, which included our deferred revenues balances and amounts to be invoiced and recognized as revenue in future periods. We expect to recognize approximately $1.4 billion over the next 12 months, $0.4 billion in the subsequent 12-month period, and the remainder thereafter. This balance did not include an estimate for variable consideration arising from sales-based royalty license revenue in excess of the contractual minimum guarantee or any estimated amounts of variable consideration that are subject to constraint in accordance with the new revenue standard. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facilities As of September 30, 2020 and December 31, 2019, we had $1.5 billion available under a revolving credit facility (the “Revolver”) pursuant to a credit agreement entered into on October 11, 2013 (as amended thereafter and from time to time, the “Credit Agreement”). To date, we have not drawn on the Revolver and we were in compliance with the terms of the Credit Agreement as of September 30, 2020. Refer to Note 13 contained in our Annual Report on Form 10-K for the year ended December 31, 2019 for further details regarding the Credit Agreement, its key terms, and previous amendments made to it. Unsecured Senior Notes As of September 30, 2020 and December 31, 2019, we had $3.7 billion and $2.7 billion, respectively, of gross unsecured senior notes outstanding. A summary of our outstanding unsecured senior notes is as follows (amounts in millions): At September 30, 2020 At December 31, 2019 Unsecured Senior Notes Interest Rate Semi-Annual Interest Payments Due On Maturity Principal Fair Value Principal Fair Value 2021 Notes 2.30% Mar. 15 & Sept. 15 Sept. 2021 $ — — $ 650 $ 653 2022 Notes 2.60% Jun. 15 & Dec. 15 Jun. 2022 — — 400 405 2026 Notes 3.40% Mar. 15 & Sept. 15 Sept. 2026 850 968 850 893 2027 Notes 3.40% Jun. 15 & Dec. 15 Jun. 2027 400 453 400 417 2030 Notes 1.35% Mar. 15 & Sept. 15 Sept. 2030 500 488 — — 2047 Notes 4.50% Jun. 15 & Dec. 15 Jun. 2047 400 508 400 456 2050 Notes 2.50% Mar. 15 & Sept. 15 Sept. 2050 1,500 1,386 — — Total gross long-term debt $ 3,650 $ 2,700 Unamortized discount and deferred financing costs (46) (25) Total net carrying amount $ 3,604 $ 2,675 On August 5, 2020, we issued the 2030 Notes and 2050 Notes in a public underwritten offering, for an aggregate principal amount of $2.0 billion in new debt. In connection with the issuance, we incurred approximately $26 million of debt discount and financing costs that were capitalized and recorded within "Long-term debt, net" in our condensed consolidated balance sheet. On September 4, 2020, we redeemed all of our outstanding 2021 Notes and 2022 Notes at a redemption price equal to 100% of their respective principal amounts plus (1) a “make-whole” premium of $28 million and (2) accrued and unpaid interest to the redemption date. The redemption of the 2021 Notes and 2022 Notes resulted in a “Loss on extinguishment of debt” recorded in the condensed consolidated statement of operations of $31 million. We may redeem some or all of the 2030 Notes and 2050 Notes, in whole or in part, at any time on or after June 15, 2030 and March 15, 2050, respectively, in each case at 100% of the aggregate principal amount thereof plus accrued and unpaid interest. In addition, we may redeem some or all of the 2030 Notes and the 2050 Notes prior to June 15, 2030 and March 15, 2050, respectively, in each case at a price equal to 100% of the aggregate principal amount thereof plus a “make-whole” premium and accrued and unpaid interest. The other terms and covenants associated with the 2030 Notes and the 2050 Notes are generally consistent with those associated with the 2026 Notes, 2027 Notes and 2047 Notes. We were in compliance with the terms of the notes outstanding as of September 30, 2020. As of September 30, 2020, we have no contractual principal repayments of our long-term debt within the next five years. Refer to Note 13 contained in our Annual Report on Form 10-K for the year ended December 31, 2019 for further details regarding key terms under our indentures that govern the 2026 Notes, 2027 Notes and 2047 Notes. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) were as follows (amounts in millions): For the Nine Months Ended September 30, 2020 Foreign currency translation adjustments Unrealized gain (loss) on forward contracts Unrealized gain (loss) on available-for-sale securities Total Balance at December 31, 2019 $ (624) $ 8 $ (3) $ (619) Other comprehensive income (loss) before reclassifications 13 (19) — (6) Amounts reclassified from accumulated other comprehensive income (loss) into earnings (2) (7) 1 (8) Balance at September 30, 2020 $ (613) $ (18) $ (2) $ (633) For the Nine Months Ended September 30, 2019 Foreign currency translation adjustments Unrealized gain (loss) on forward contracts Unrealized gain (loss) on available-for-sale securities Total Balance at December 31, 2018 $ (629) $ 23 $ 5 $ (601) Other comprehensive income (loss) before reclassifications (5) 28 3 26 Amounts reclassified from accumulated other comprehensive income (loss) into earnings — (24) (8) (32) Balance at September 30, 2019 $ (634) $ 27 $ — $ (607) |
Operating Segments and Geograph
Operating Segments and Geographic Region | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Operating Segments and Geographic Region | Operating Segments and Geographic Region We have three reportable segments—Activision, Blizzard, and King. Our operating segments are consistent with the manner in which our operations are reviewed and managed by our Chief Executive Officer, who is our chief operating decision maker (“CODM”). The CODM reviews segment performance exclusive of: the impact of the change in deferred revenues and related cost of revenues with respect to certain of our online-enabled games; share-based compensation expense; amortization of intangible assets as a result of purchase price accounting; fees and other expenses (including legal fees, expenses, and accruals) related to acquisitions, associated integration activities, and financings; certain restructuring and related costs; and certain other non-cash charges. The CODM does not review any information regarding total assets on an operating segment basis, and accordingly, no disclosure is made with respect thereto. Our operating segments are also consistent with our internal organizational structure, the way we assess operating performance and allocate resources, and the availability of separate financial information. We do not aggregate operating segments. Information on reportable segment net revenues and operating income for the three months ended September 30, 2020 and 2019, are presented below (amounts in millions): Three Months Ended September 30, 2020 Activision Blizzard King Total Segment Net Revenues Net revenues from external customers $ 773 $ 393 $ 536 $ 1,702 Intersegment net revenues (1) — 18 — 18 Segment net revenues $ 773 $ 411 $ 536 $ 1,720 Segment operating income $ 345 $ 133 $ 248 $ 726 Three Months Ended September 30, 2019 Activision Blizzard King Total Segment Net Revenues Net revenues from external customers $ 209 $ 392 $ 500 $ 1,101 Intersegment net revenues (1) — 2 — 2 Segment net revenues $ 209 $ 394 $ 500 $ 1,103 Segment operating income $ 26 $ 74 $ 194 $ 294 Information on reportable segment net revenues and operating income for the nine months ended September 30, 2020 and 2019, are presented below (amounts in millions): Nine Months Ended September 30, 2020 Activision Blizzard King Total Segment Net Revenues Net revenues from external customers $ 2,285 $ 1,264 $ 1,587 $ 5,136 Intersegment net revenues (1) — 62 — 62 Segment net revenues $ 2,285 $ 1,326 $ 1,587 $ 5,198 Segment operating income $ 1,088 $ 533 $ 615 $ 2,236 Nine Months Ended September 30, 2019 Activision Blizzard King Total Segment Net Revenues Net revenues from external customers $ 794 $ 1,113 $ 1,527 $ 3,434 Intersegment net revenues (1) — 9 — 9 Segment net revenues $ 794 $ 1,122 $ 1,527 $ 3,443 Segment operating income $ 153 $ 204 $ 543 $ 900 (1) Intersegment revenues reflect licensing and service fees charged between segments. Reconciliations of total segment net revenues and total segment operating income to consolidated net revenues and consolidated income before income tax expense are presented in the table below (amounts in millions): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Reconciliation to consolidated net revenues: Segment net revenues $ 1,720 $ 1,103 $ 5,198 $ 3,443 Revenues from non-reportable segments (1) 65 113 232 245 Net effect from recognition (deferral) of deferred net revenues (2) 187 68 306 824 Elimination of intersegment revenues (3) (18) (2) (62) (9) Consolidated net revenues $ 1,954 $ 1,282 $ 5,674 $ 4,503 Reconciliation to consolidated income before income tax expense: Segment operating income $ 726 $ 294 $ 2,236 $ 900 Operating income (loss) from non-reportable segments (1) (20) 5 (27) 10 Net effect from recognition (deferral) of deferred net revenues and related cost of revenues (2) 150 53 169 629 Share-based compensation expense (53) (27) (138) (127) Amortization of intangible assets (16) (50) (62) (151) Restructuring and related costs (4) (9) (28) (39) (108) Consolidated operating income 778 247 2,139 1,153 Interest and other expense (income), net 25 (2) 55 (33) Loss on extinguishment of debt 31 — 31 — Consolidated income before income tax expense $ 722 $ 249 $ 2,053 $ 1,186 (1) Includes other income and expenses from operating segments managed outside the reportable segments, including our Distribution business. Also includes unallocated corporate income and expenses. (2) Reflects the net effect from recognition (deferral) of deferred net revenues, along with related cost of revenues, on certain of our online-enabled products. (3) Intersegment revenues reflect licensing and service fees charged between segments. (4) Reflects restructuring initiatives, which include severance and other restructuring-related costs. Net revenues by distribution channel, including a reconciliation to each of our reportable segment’s revenues, for the three months ended September 30, 2020 and 2019, were as follows (amounts in millions): Three Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by distribution channel: Digital online channels (1) $ 826 $ 405 $ 540 $ — $ (18) $ 1,753 Retail channels 110 7 — — — 117 Other (2) 8 11 — 65 — 84 Total consolidated net revenues $ 944 $ 423 $ 540 $ 65 $ (18) $ 1,954 Change in deferred revenues: Digital online channels (1) $ (130) $ (14) $ (4) $ — $ — $ (148) Retail channels (41) 2 — — — (39) Other (2) — — — — — — Total change in deferred revenues $ (171) $ (12) $ (4) $ — $ — $ (187) Segment net revenues: Digital online channels (1) $ 696 $ 391 $ 536 $ — $ (18) $ 1,605 Retail channels 69 9 — — — 78 Other (2) 8 11 — 65 — 84 Total segment net revenues $ 773 $ 411 $ 536 $ 65 $ (18) $ 1,767 Three Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by distribution channel: Digital online channels (1) $ 179 $ 335 $ 502 $ — $ (2) $ 1,014 Retail channels 73 20 — — — 93 Other (2) — 62 — 113 — 175 Total consolidated net revenues $ 252 $ 417 $ 502 $ 113 $ (2) $ 1,282 Change in deferred revenues: Digital online channels (1) $ (16) $ (21) $ (2) $ — $ — $ (39) Retail channels (27) (2) — — — (29) Other (2) — — — — — — Total change in deferred revenues $ (43) $ (23) $ (2) $ — $ — $ (68) Segment net revenues: Digital online channels (1) $ 163 $ 314 $ 500 $ — $ (2) $ 975 Retail channels 46 18 — — — 64 Other (2) — 62 — 113 — 175 Total segment net revenues $ 209 $ 394 $ 500 $ 113 $ (2) $ 1,214 Net revenues by distribution channel, including a reconciliation to each of our reportable segment’s revenues, for the nine months ended September 30, 2020 and 2019, were as follows (amounts in millions): Nine Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by distribution channel: Digital online channels (1) $ 2,054 $ 1,203 $ 1,587 $ — $ (62) $ 4,782 Retail channels 485 23 1 — — 509 Other (2) 55 87 — 241 — 383 Total consolidated net revenues $ 2,594 $ 1,313 $ 1,588 $ 241 $ (62) $ 5,674 Change in deferred revenues: Digital online channels (1) $ (16) $ 16 $ (1) $ — $ — $ (1) Retail channels (293) (2) — — — (295) Other (2) — (1) — (9) — (10) Total change in deferred revenues $ (309) $ 13 $ (1) $ (9) $ — $ (306) Segment net revenues: Digital online channels (1) $ 2,038 $ 1,219 $ 1,586 $ — $ (62) $ 4,781 Retail channels 192 21 1 — — 214 Other (2) 55 86 — 232 — 373 Total segment net revenues $ 2,285 $ 1,326 $ 1,587 $ 232 $ (62) $ 5,368 Nine Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by distribution channel: Digital online channels (1) $ 894 $ 1,081 $ 1,527 $ — $ (9) $ 3,493 Retail channels 548 51 — — — 599 Other (2) — 157 — 254 — 411 Total consolidated net revenues $ 1,442 $ 1,289 $ 1,527 $ 254 $ (9) $ 4,503 Change in deferred revenues: Digital online channels (1) $ (285) $ (159) $ — $ — $ — $ (444) Retail channels (363) (10) — — — (373) Other (2) — 2 — (9) — (7) Total change in deferred revenues $ (648) $ (167) $ — $ (9) $ — $ (824) Segment net revenues: Digital online channels (1) $ 609 $ 922 $ 1,527 $ — $ (9) $ 3,049 Retail channels 185 41 — — — 226 Other (2) — 159 — 245 — 404 Total segment net revenues $ 794 $ 1,122 $ 1,527 $ 245 $ (9) $ 3,679 (1) Net revenues from “Digital online channels” include revenues from digitally-distributed subscriptions, downloadable content, microtransactions, and products, as well as licensing royalties. (2) Net revenues from “Other” include revenues from our Distribution business, the Overwatch League, and the Call of Duty League. (3) Intersegment revenues reflect licensing and service fees charged between segments. Geographic information presented below is based on the location of the paying customer. Net revenues by geographic region, including a reconciliation to each of our reportable segment’s net revenues, for the three months ended September 30, 2020 and 2019, were as follows (amounts in millions): Three Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (2) Total Net revenues by geographic region: Americas $ 595 $ 192 $ 350 $ — $ (10) $ 1,127 EMEA (1) 263 131 136 65 (6) 589 Asia Pacific 86 100 54 — (2) 238 Total consolidated net revenues $ 944 $ 423 $ 540 $ 65 $ (18) $ 1,954 Change in deferred revenues: Americas $ (77) $ (4) $ (4) $ — $ (1) $ (86) EMEA (1) (68) (8) — — 1 (75) Asia Pacific (26) — — — — (26) Total change in deferred revenues $ (171) $ (12) $ (4) $ — $ — $ (187) Segment net revenues: Americas $ 518 $ 188 $ 346 $ — $ (11) $ 1,041 EMEA (1) 195 123 136 65 (5) 514 Asia Pacific 60 100 54 — (2) 212 Total segment net revenues $ 773 $ 411 $ 536 $ 65 $ (18) $ 1,767 Three Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (2) Total Net revenues by geographic region: Americas $ 141 $ 204 $ 311 $ — $ (1) $ 655 EMEA (1) 79 124 137 113 (1) 452 Asia Pacific 32 89 54 — — 175 Total consolidated net revenues $ 252 $ 417 $ 502 $ 113 $ (2) $ 1,282 Change in deferred revenues: Americas $ (20) $ (11) $ (2) $ — $ — $ (33) EMEA (1) (16) (10) — — — (26) Asia Pacific (7) (2) — — — (9) Total change in deferred revenues $ (43) $ (23) $ (2) $ — $ — $ (68) Segment net revenues: Americas $ 121 $ 193 $ 309 $ — $ (1) $ 622 EMEA (1) 63 114 137 113 (1) 426 Asia Pacific 25 87 54 — — 166 Total segment net revenues $ 209 $ 394 $ 500 $ 113 $ (2) $ 1,214 Net revenues by geographic region, including a reconciliation to each of our reportable segment’s net revenues, for the nine months ended September 30, 2020 and 2019, were as follows (amounts in millions): Nine Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (2) Total Net revenues by geographic region: Americas $ 1,615 $ 580 $ 1,024 $ — $ (31) $ 3,188 EMEA (1) 750 393 407 241 (21) 1,770 Asia Pacific 229 340 157 — (10) 716 Total consolidated net revenues $ 2,594 $ 1,313 $ 1,588 $ 241 $ (62) $ 5,674 Change in deferred revenues: Americas $ (124) $ 18 $ — $ — $ — $ (106) EMEA (1) (146) (3) (1) (9) — (159) Asia Pacific (39) (2) — — — (41) Total change in deferred revenues $ (309) $ 13 $ (1) $ (9) $ — $ (306) Segment net revenues: Americas $ 1,491 $ 598 $ 1,024 $ — $ (31) $ 3,082 EMEA (1) 604 390 406 232 (21) 1,611 Asia Pacific 190 338 157 — (10) 675 Total segment net revenues $ 2,285 $ 1,326 $ 1,587 $ 232 $ (62) $ 5,368 Nine Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (2) Total Net revenues by geographic region: Americas $ 852 $ 613 $ 946 $ — $ (5) $ 2,406 EMEA (1) 457 400 417 254 (3) 1,525 Asia Pacific 133 276 164 — (1) 572 Total consolidated net revenues $ 1,442 $ 1,289 $ 1,527 $ 254 $ (9) $ 4,503 Change in deferred revenues: Americas $ (390) $ (80) $ 1 $ — $ — $ (469) EMEA (1) (205) (71) — (9) — (285) Asia Pacific (53) (16) (1) — — (70) Total change in deferred revenues $ (648) $ (167) $ — $ (9) $ — $ (824) Segment net revenues: Americas $ 462 $ 533 $ 947 $ — $ (5) $ 1,937 EMEA (1) 252 329 417 245 (3) 1,240 Asia Pacific 80 260 163 — (1) 502 Total segment net revenues $ 794 $ 1,122 $ 1,527 $ 245 $ (9) $ 3,679 (1) “EMEA” consists of the Europe, Middle East, and Africa geographic regions. (2) Intersegment revenues reflect licensing and service fees charged between segments. The Company’s net revenues in the U.S. were 50% and 46% of consolidated net revenues for the three months ended September 30, 2020 and 2019, respectively. The Company’s net revenues in the United Kingdom (the “U.K.”) were 9% and 13% of consolidated net revenues for the three months ended September 30, 2020 and 2019, respectively. No other country’s net revenues exceeded 10% of consolidated net revenues for either the three months ended September 30, 2020 or 2019. The Company’s net revenues in the U.S. were 50% and 48% of consolidated net revenues for the nine months ended September 30, 2020 and 2019, respectively. The Company’s net revenues in the U.K. were 10% of consolidated net revenues for both the nine months ended September 30, 2020 and 2019. No other country’s net revenues exceeded 10% of consolidated net revenues for either the nine months ended September 30, 2020 or 2019. Net revenues by platform, including a reconciliation to each of our reportable segment’s net revenues, for the three months ended September 30, 2020 and 2019, were as follows (amounts in millions): Three Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by platform: Console $ 664 $ 31 $ — $ — $ — $ 695 PC 152 357 23 — (18) 514 Mobile and ancillary (1) 120 24 517 — — 661 Other (2) 8 11 — 65 — 84 Total consolidated net revenues $ 944 $ 423 $ 540 $ 65 $ (18) $ 1,954 Change in deferred revenues: Console $ (125) $ (4) $ — $ — $ — $ (129) PC (35) (9) (1) — — (45) Mobile and ancillary (1) (11) 1 (3) — — (13) Other (2) — — — — — — Total change in deferred revenues $ (171) $ (12) $ (4) $ — $ — $ (187) Segment net revenues: Console $ 539 $ 27 $ — $ — $ — $ 566 PC 117 348 22 — (18) 469 Mobile and ancillary (1) 109 25 514 — — 648 Other (2) 8 11 — 65 — 84 Total segment net revenues $ 773 $ 411 $ 536 $ 65 $ (18) $ 1,767 Three Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by platform: Console $ 214 $ 27 $ — $ — $ — $ 241 PC 29 286 28 — (2) 341 Mobile and ancillary (1) 9 42 474 — — 525 Other (2) — 62 — 113 — 175 Total consolidated net revenues $ 252 $ 417 $ 502 $ 113 $ (2) $ 1,282 Change in deferred revenues: Console $ (36) $ (9) $ — $ — $ — $ (45) PC (7) (14) — — — (21) Mobile and ancillary (1) — — (2) — — (2) Other (2) — — — — — — Total change in deferred revenues $ (43) $ (23) $ (2) $ — $ — $ (68) Segment net revenues: Console $ 178 $ 18 $ — $ — $ — $ 196 PC 22 272 28 — (2) 320 Mobile and ancillary (1) 9 42 472 — — 523 Other (2) — 62 — 113 — 175 Total segment net revenues $ 209 $ 394 $ 500 $ 113 $ (2) $ 1,214 Net revenues by platform, including a reconciliation to each of our reportable segment’s net revenues, for the nine months ended September 30, 2020 and 2019, were as follows (amounts in millions): Nine Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by platform: Console $ 1,855 $ 89 $ — $ — $ — $ 1,944 PC 423 1,060 73 — (62) 1,494 Mobile and ancillary (1) 261 77 1,515 — — 1,853 Other (2) 55 87 — 241 — 383 Total consolidated net revenues $ 2,594 $ 1,313 $ 1,588 $ 241 $ (62) $ 5,674 Change in deferred revenues: Console $ (295) $ (6) $ — $ — $ — $ (301) PC (50) 24 (1) — — (27) Mobile and ancillary (1) 36 (4) — — — 32 Other (2) — (1) — (9) — (10) Total change in deferred revenues $ (309) $ 13 $ (1) $ (9) $ — $ (306) Segment net revenues: Console $ 1,560 $ 83 $ — $ — $ — $ 1,643 PC 373 1,084 72 — (62) 1,467 Mobile and ancillary (1) 297 73 1,515 — — 1,885 Other (2) 55 86 — 232 — 373 Total segment net revenues $ 2,285 $ 1,326 $ 1,587 $ 232 $ (62) $ 5,368 Nine Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by platform: Console $ 1,222 $ 102 $ — $ — $ — $ 1,324 PC 204 909 92 — (9) 1,196 Mobile and ancillary (1) 16 121 1,435 — — 1,572 Other (2) — 157 — 254 — 411 Total consolidated net revenues $ 1,442 $ 1,289 $ 1,527 $ 254 $ (9) $ 4,503 Change in deferred revenues: Console $ (563) $ (26) $ — $ — $ — $ (589) PC (84) (133) (1) — — (218) Mobile and ancillary (1) (1) (10) 1 — — (10) Other (2) — 2 — (9) — (7) Total change in deferred revenues $ (648) $ (167) $ — $ (9) $ — $ (824) Segment net revenues: Console $ 659 $ 76 $ — $ — $ — $ 735 PC 120 776 91 — (9) 978 Mobile and ancillary (1) 15 111 1,436 — — 1,562 Other (2) — 159 — 245 — 404 Total segment net revenues $ 794 $ 1,122 $ 1,527 $ 245 $ (9) $ 3,679 (1) Net revenues from “Mobile and ancillary” include revenues from mobile devices, as well as non-platform specific game-related revenues, such as standalone sales of physical merchandise and accessories. (2) Net revenues from “Other” include revenues from our Distribution business, the Overwatch League, and the Call of Duty League. (3) Intersegment revenues reflect licensing and service fees charged between segments. Long-lived assets by geographic region were as follows (amounts in millions): At September 30, 2020 At December 31, 2019 Long-lived assets (1) by geographic region: Americas $ 269 $ 322 EMEA 174 142 Asia Pacific 16 21 Total long-lived assets by geographic region $ 459 $ 485 (1) The only long-lived assets that we classify by region are our long-term tangible fixed assets, which consist of property, plant, and equipment assets, and our lease right-of-use assets; all other long-term assets are not allocated by location. |
Interest and Other Expense (Inc
Interest and Other Expense (Income), Net | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Interest and Other Expense (Income), Net | Interest and Other Expense (Income), Net Interest and other expense (income), net is comprised of the following (amounts in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Interest income $ (1) $ (20) $ (20) $ (61) Interest expense from debt and amortization of debt discount and deferred financing costs 27 23 72 68 Unrealized gain on equity investment (3) — (3) (38) Other expense (income), net 2 (5) 6 (2) Interest and other expense (income), net $ 25 $ (2) $ 55 $ (33) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We account for our provision for income taxes in accordance with ASC 740, Income Taxes , which requires an estimate of the annual effective tax rate for the full year to be applied to the interim period, taking into account year-to-date amounts and projected results for the full year. The provision for income taxes represents federal, foreign, state, and local income taxes. Our effective tax rate could be different from the statutory U.S. income tax rate due to: the effect of state and local income taxes; tax rates that apply to our foreign income (including U.S. tax on foreign income); research and development credits; and certain nondeductible expenses. Our effective tax rate could fluctuate significantly from quarter to quarter based on recurring and nonrecurring factors including, but not limited to: variations in the estimated and actual level of pre-tax income or loss by jurisdiction; changes in enacted tax laws and regulations, and interpretations thereof, including with respect to tax credits and state and local income taxes; developments in tax audits and other matters; recognition of excess tax benefits and tax deficiencies from share-based payments; and certain nondeductible expenses. Changes in judgment from the evaluation of new information resulting in the recognition, derecognition, or remeasurement of a tax position taken in a prior annual period are recognized separately in the quarter of the change. The income tax expense of $118 million for the three months ended September 30, 2020, reflects an effective tax rate of 16%, which is lower than the effective tax rate of 18% for the three months ended September 30, 2019. This decrease is primarily due to discrete tax benefits recognized in the current quarter for the remeasurement of deferred tax assets, partially offset by an increase in taxes on foreign earnings. The income tax expense of $365 million for the nine months ended September 30, 2020, reflects, an effective tax rate of 18%, which is comparable to effective tax rate of 18% for the nine months ended September 30, 2019. Discrete tax benefits recognized in the current year for the remeasurement of deferred tax assets were offset by an increase in taxes on foreign earnings. The effective tax rates of 16% and 18% for the three and nine months ended September 30, 2020, are lower than the U.S. statutory rate of 21% primarily due to discrete tax benefits recognized for the remeasurement of deferred tax assets and the recognition of excess tax benefits from share-based payments. During the quarter ended September 30, 2020, the U.S. Treasury Department issued tax regulations under various provisions of the 2017 Tax Cuts and Jobs Act, including the global intangible low-taxed income high tax exclusion. While these regulations did not result in a material impact to our financial statements in the current quarter, we will continue to assess their impact on future periods. Activision Blizzard’s tax years after 2008 remain open to examination by certain major taxing jurisdictions to which we are subject. The Internal Revenue Service is currently examining our federal tax returns for the 2012 through 2016 tax years. We also have several state and non-U.S. audits pending. In addition, King’s pre-acquisition tax returns remain open in various jurisdictions, primarily as a result of transfer pricing matters. We anticipate resolving King’s transfer pricing for both pre- and post-acquisition tax years through a collaborative multilateral process with the tax authorities in the relevant jurisdictions, which include the U.K. and Sweden. While the outcome of this process remains uncertain, it could result in an agreement that changes the allocation of profits and losses between these and other relevant jurisdictions or a failure to reach an agreement that results in unilateral adjustments to the amount and timing of taxable income in the jurisdictions in which King operates. In December 2018, we received a decision from the Swedish Tax Agency (“STA”) informing us of an audit assessment of a Swedish subsidiary of King for the 2016 tax year (“Initial Decision”). The Initial Decision described the basis for issuing a transfer pricing assessment of approximately 3.5kr billion (approximately $386 million), primarily concerning an alleged intercompany asset transfer. On June 17, 2019, we received a reassessment from the STA (the “Reassessment”) which changed the Initial Decision based on a revision of the transfer pricing approach reflected in King’s 2016 Swedish tax return and removal of the alleged intercompany asset transfer that was the basis of the Initial Decision. The STA also, at the same time, reassessed the 2017 tax year on the same transfer pricing basis as 2016. The transfer pricing approach reflected in the Reassessment for both 2016 and 2017 remains subject to further review by taxing authorities in other jurisdictions. In July 2019, the Company made a payment to the STA for the Reassessment for the 2016 and 2017 tax years, which did not result in a significant impact to our condensed consolidated financial statements. In December 2017, we received a Notice of Reassessment from the French Tax Authority (“FTA”) related to transfer pricing for intercompany transactions involving one of our French subsidiaries for the 2011 through 2013 tax years. The total assessment, including penalties and interest, was approximately €571 million (approximately $666 million). In December 2019, the Company reached a settlement with the FTA for the 2011 through 2018 tax years, resulting in the recognition of $54 million of tax expense in the period ended December 31, 2019, and a tax payment of €161 million (approximately $188 million), including interest and penalties, in January 2020. In addition, certain of our subsidiaries are under examination or investigation, or may be subject to examination or investigation, by tax authorities in various jurisdictions. These proceedings may lead to adjustments or proposed adjustments to our taxes or provisions for uncertain tax positions. Such proceedings may have a material adverse effect on the Company’s consolidated financial position, liquidity, or results of operations in the earlier of the period or periods in which the matters are resolved and in which appropriate tax provisions are taken into account in our financial statements. If we were to receive a materially adverse assessment from a taxing jurisdiction, we would plan to vigorously contest it and consider all of our options, including the pursuit of judicial remedies. We regularly assess the likelihood of adverse outcomes resulting from these examinations and monitor the progress of ongoing discussions with tax authorities in determining the appropriateness of our tax provisions. The final resolution of the Company’s global tax disputes is uncertain. There is significant judgment required in the analysis of disputes, including the probability determination and estimation of the potential exposure. Based on current information, in the opinion of the Company’s management, the ultimate resolution of these matters is not expected to have a material adverse effect on the Company’s consolidated financial position, liquidity or results of operations, except as noted above. |
Computation of Basic_Diluted Ea
Computation of Basic/Diluted Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic/Diluted Earnings Per Common Share | Computation of Basic/Diluted Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per common share (amounts in millions, except per share data): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Consolidated net income $ 604 $ 204 $ 1,688 $ 978 Denominator: Denominator for basic earnings per common share—weighted-average common shares outstanding 772 767 771 766 Effect of potential dilutive common shares under the treasury stock method—employee stock options and awards 7 4 6 4 Denominator for basic earnings per common share—weighted-average dilutive common shares outstanding 779 771 777 770 Basic earnings per common share $ 0.78 $ 0.27 $ 2.19 $ 1.28 Diluted earnings per common share $ 0.78 $ 0.26 $ 2.17 $ 1.27 The vesting of certain of our employee-related restricted stock units and options is contingent upon the satisfaction of pre-defined performance measures. The shares underlying these equity awards are included in the weighted-average dilutive common shares only if the performance measures are met as of the end of the reporting period. Additionally, potential common shares are not included in the denominator of the diluted earnings per common share calculation when the inclusion of such shares would be anti-dilutive. Weighted-average shares excluded from the computation of diluted earnings per share were as follows (amounts in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Restricted stock units and options with performance measures not yet met 3 4 2 3 Anti-dilutive employee stock options — 6 1 6 |
Capital Transactions
Capital Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Capital Transactions | Capital Transactions Repurchase Program On January 31, 2019, our Board of Directors authorized a stock repurchase program under which we are authorized to repurchase up to $1.5 billion of our common stock from February 14, 2019, until the earlier of February 13, 2021, and a determination by the Board of Directors to discontinue the repurchase program. As of September 30, 2020, we have not repurchased any shares under this program. Dividends On February 6, 2020, our Board of Directors declared a cash dividend of $0.41 per common share. On May 6, 2020, we made an aggregate cash dividend payment of $316 million to shareholders of record at the close of business on April 15, 2020. On February 12, 2019, our Board of Directors declared a cash dividend of $0.37 per common share. On May 9, 2019, we made an aggregate cash dividend payment of $283 million to shareholders of record at the close of business on March 28, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings We are party to routine claims, suits, investigations, audits, and other proceedings arising from the ordinary course of business, including with respect to intellectual property rights, contractual claims, labor and employment matters, regulatory matters, tax matters, unclaimed property matters, compliance matters, and collection matters. In the opinion of management, after consultation with legal counsel, such routine claims and lawsuits are not significant, and we do not expect them to have a material adverse effect on our business, financial condition, results of operations, or liquidity. |
Description of Business and B_2
Description of Business and Basis of Consolidation and Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation and Presentation | Basis of Consolidation and Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim reporting. Accordingly, certain notes or other information that are normally required by U.S. GAAP have been condensed or omitted if they substantially duplicate the disclosures contained in our annual audited consolidated financial statements. Additionally, the year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. Accordingly, the unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Generally, making these estimates and developing our assumptions requires consideration of forecasted information, which, in context of the COVID-19 pandemic, involves additional uncertainty. While there was no material impact to our estimates in the current period, in future periods, facts and circumstances (including, without limitation, the impact of the ongoing global COVID-19 pandemic) could change and impact our estimates. Additionally, actual results could differ from these estimates and assumptions. In the opinion of management, all adjustments considered necessary for the fair statement of our financial position and results of operations in accordance with U.S. GAAP (consisting of normal recurring adjustments) have been included in the accompanying unaudited condensed consolidated financial statements. The accompanying condensed consolidated financial statements include the accounts and operations of the Company. All intercompany accounts and transactions have been eliminated. Certain reclassifications have been made to prior-year amounts to conform to the current period presentation. |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Cloud Computing Arrangements In August 2018, the Financial Accounting Standards Board (“FASB”) issued new guidance related to a customer’s accounting for implementation costs incurred in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract. The new guidance requires customers to capitalize implementation costs for these arrangements by applying the same criteria that are utilized for existing internal-use software guidance. The capitalized costs are required to be amortized over the associated term of the arrangement, generally on a straight-line basis, with amortization of these costs presented in the same financial statement line item as other costs associated with the arrangement. We adopted the new standard under a prospective approach during the first quarter of 2020 and it did not have a material impact on our condensed consolidated financial statements. Goodwill In January 2017, the FASB issued new guidance that eliminates Step 2 from the goodwill impairment test. Instead, if an entity forgoes a Step 0 test, that entity will be required to perform its annual or interim goodwill impairment test by (1) comparing the fair value of a reporting unit, as determined in Step 1 from the goodwill impairment test, with its carrying amount and (2) recognizing an impairment charge, if any, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. We adopted the new standard under a prospective approach during the first quarter of 2020 and it did not have a material impact on our condensed consolidated financial statements. Financial Instruments - Credit Losses In June 2016, the FASB issued new guidance related to accounting for credit losses on financial instruments. The update replaces the existing incurred loss impairment model with a methodology that reflects a current expected credit losses model which requires the use of historical and forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will generally result in earlier recognition of credit losses. We adopted the new standard under a modified retrospective basis, with the cumulative effect of adoption recorded as an adjustment to retained earnings during the first quarter of 2020. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Simplifying the Accounting for Income Taxes In December 2019, the FASB issued new guidance which is intended to simplify various aspects of accounting for income taxes by removing certain exceptions to the general principles in Topic 740 f or recognizing deferred taxes for investments, performing an intraperiod allocation and calculating income taxes in interim periods . The amendment also clarifies and amends certain areas of existing guidance to reduce complexity and improve consistency in the application of Topic 740. The new standard is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. Generally, the topics must be applied prospectively upon adoption, with the exception of certain topics which are required to be applied on a retrospective or modified retrospective basis. We are evaluating the impact, if any, of adopting this new accounting guidance on our financial statements. |
Software Development and Inte_2
Software Development and Intellectual Property Licenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Software Development Costs and Intellectual Property Licenses | |
Summary of the components of capitalized software development | The following table summarizes the components of our capitalized software development costs (amounts in millions): At September 30, 2020 At December 31, 2019 Internally-developed software costs $ 510 $ 345 Payments made to third-party software developers 33 31 Total software development costs $ 543 $ 376 |
Amortization of capitalized software development costs and intellectual property licenses | Amortization of capitalized software development costs and intellectual property licenses was as follows (amounts in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Amortization of capitalized software development costs and intellectual property licenses $ 37 $ 11 $ 149 $ 175 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of finite-lived intangible assets | Intangible assets, net, consist of the following (amounts in millions): At September 30, 2020 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: Internally-developed franchises 3 - 11 years $ 1,154 $ (1,139) $ 15 Developed software 2 - 5 years 601 (600) 1 Trade names 7 years 54 (36) 18 Other 1 - 10 years 19 (17) 2 Total definite-lived intangible assets $ 1,828 $ (1,792) $ 36 Acquired indefinite-lived intangible assets: Activision trademark Indefinite 386 Acquired trade names Indefinite 47 Total indefinite-lived intangible assets $ 433 Total intangible assets, net $ 469 At December 31, 2019 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: Internally-developed franchises 3 - 11 years $ 1,154 $ (1,105) $ 49 Developed software 2 - 5 years 601 (579) 22 Trade names 7 - 10 years 54 (30) 24 Other 1 - 15 years 19 (16) 3 Total definite-lived intangible assets $ 1,828 $ (1,730) $ 98 Acquired indefinite-lived intangible assets: Activision trademark Indefinite 386 Acquired trade names Indefinite 47 Total indefinite-lived intangible assets $ 433 Total intangible assets, net $ 531 |
Schedule of indefinite-lived intangible assets | Intangible assets, net, consist of the following (amounts in millions): At September 30, 2020 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: Internally-developed franchises 3 - 11 years $ 1,154 $ (1,139) $ 15 Developed software 2 - 5 years 601 (600) 1 Trade names 7 years 54 (36) 18 Other 1 - 10 years 19 (17) 2 Total definite-lived intangible assets $ 1,828 $ (1,792) $ 36 Acquired indefinite-lived intangible assets: Activision trademark Indefinite 386 Acquired trade names Indefinite 47 Total indefinite-lived intangible assets $ 433 Total intangible assets, net $ 469 At December 31, 2019 Estimated useful lives Gross carrying amount Accumulated amortization Net carrying amount Acquired definite-lived intangible assets: Internally-developed franchises 3 - 11 years $ 1,154 $ (1,105) $ 49 Developed software 2 - 5 years 601 (579) 22 Trade names 7 - 10 years 54 (30) 24 Other 1 - 15 years 19 (16) 3 Total definite-lived intangible assets $ 1,828 $ (1,730) $ 98 Acquired indefinite-lived intangible assets: Activision trademark Indefinite 386 Acquired trade names Indefinite 47 Total indefinite-lived intangible assets $ 433 Total intangible assets, net $ 531 |
Schedule of finite lived intangible assets, future amortization expense | At September 30, 2020, future amortization of definite-lived intangible assets is estimated as follows (amounts in millions): For the years ending December 31, 2020 (remaining three months) $ 17 2021 10 2022 7 2023 1 2024 — Thereafter 1 Total $ 36 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The carrying amount of goodwill by reportable segment at both September 30, 2020 and December 31, 2019 was as follows (amounts in millions): Activision Blizzard King Total Goodwill $ 6,898 $ 190 $ 2,676 $ 9,764 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value, assets measured on a recurring and/or non-recurring basis | The table below segregates all of our financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date (amounts in millions): Fair Value Measurements at September 30, 2020 Using As of September 30, 2020 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Balance Sheet Classification Financial Assets: Recurring fair value measurements: Money market funds $ 7,121 $ 7,121 $ — $ — Cash and cash equivalents Foreign government treasury bills 33 33 — — Cash and cash equivalents U.S. treasuries and government agency securities 187 187 — — Other current assets Total recurring fair value measurements $ 7,341 $ 7,341 $ — $ — Financial Liabilities: Foreign currency forward contracts not designated as hedges $ (1) $ — $ (1) $ — Accrued expenses and other liabilities Foreign currency forward contracts designated as hedges $ (18) $ — $ (18) $ — Accrued expenses and other liabilities Fair Value Measurements at December 31, 2019 Using As of December 31, 2019 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Balance Sheet Classification Financial Assets: Recurring fair value measurements: Money market funds $ 5,320 $ 5,320 $ — $ — Cash and cash equivalents Foreign government treasury bills 37 37 — — Cash and cash equivalents U.S. treasuries and government agency securities 65 65 — — Other current assets Total recurring fair value measurements $ 5,422 $ 5,422 $ — $ — Financial Liabilities: Foreign currency forward contracts not designated as hedges $ (2) $ — $ (2) $ — Accrued expenses and other liabilities Foreign currency forward contracts designated as hedges $ (2) $ — $ (2) $ — Accrued expenses and other liabilities |
Foreign currency forward contracts | The total gross notional amounts and fair values of our Cash Flow Hedges, all of which have remaining maturities of 13 months or less as of September 30, 2020, are as follows (amounts in millions): As of September 30, 2020 As of December 31, 2019 Notional amount Fair value gain (loss) Notional amount Fair value gain (loss) Foreign Currency: Buy USD, Sell Euro $ 608 $ (18) $ 350 $ (2) The gross notional amounts and fair values of our foreign currency forward contracts not designated as hedges are as follows (amounts in millions): As of September 30, 2020 As of December 31, 2019 Notional amount Fair value gain (loss) Notional amount Fair value gain (loss) Foreign Currency: Buy USD, Sell GBP $ 61 $ (1) $ 25 $ (2) |
Net realized gains (losses) reclassified out of accumulated other comprehensive income (loss) | The amount of pre-tax net realized gains (losses) associated with our Cash Flow Hedges that were reclassified out of “Accumulated other comprehensive income (loss)” and into earnings was as follows (amounts in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, Statement of Operations Classification 2020 2019 2020 2019 Cash Flow Hedges $ (5) $ 7 $ 7 $ 24 Net revenues |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Summary of debt | A summary of our outstanding unsecured senior notes is as follows (amounts in millions): At September 30, 2020 At December 31, 2019 Unsecured Senior Notes Interest Rate Semi-Annual Interest Payments Due On Maturity Principal Fair Value Principal Fair Value 2021 Notes 2.30% Mar. 15 & Sept. 15 Sept. 2021 $ — — $ 650 $ 653 2022 Notes 2.60% Jun. 15 & Dec. 15 Jun. 2022 — — 400 405 2026 Notes 3.40% Mar. 15 & Sept. 15 Sept. 2026 850 968 850 893 2027 Notes 3.40% Jun. 15 & Dec. 15 Jun. 2027 400 453 400 417 2030 Notes 1.35% Mar. 15 & Sept. 15 Sept. 2030 500 488 — — 2047 Notes 4.50% Jun. 15 & Dec. 15 Jun. 2047 400 508 400 456 2050 Notes 2.50% Mar. 15 & Sept. 15 Sept. 2050 1,500 1,386 — — Total gross long-term debt $ 3,650 $ 2,700 Unamortized discount and deferred financing costs (46) (25) Total net carrying amount $ 3,604 $ 2,675 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The components of accumulated other comprehensive income (loss) were as follows (amounts in millions): For the Nine Months Ended September 30, 2020 Foreign currency translation adjustments Unrealized gain (loss) on forward contracts Unrealized gain (loss) on available-for-sale securities Total Balance at December 31, 2019 $ (624) $ 8 $ (3) $ (619) Other comprehensive income (loss) before reclassifications 13 (19) — (6) Amounts reclassified from accumulated other comprehensive income (loss) into earnings (2) (7) 1 (8) Balance at September 30, 2020 $ (613) $ (18) $ (2) $ (633) For the Nine Months Ended September 30, 2019 Foreign currency translation adjustments Unrealized gain (loss) on forward contracts Unrealized gain (loss) on available-for-sale securities Total Balance at December 31, 2018 $ (629) $ 23 $ 5 $ (601) Other comprehensive income (loss) before reclassifications (5) 28 3 26 Amounts reclassified from accumulated other comprehensive income (loss) into earnings — (24) (8) (32) Balance at September 30, 2019 $ (634) $ 27 $ — $ (607) |
Operating Segments and Geogra_2
Operating Segments and Geographic Region (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of operating segments and reconciliations of total net revenues and total segment operating income to consolidated net revenues from external customers and consolidated income before income tax expense | Information on reportable segment net revenues and operating income for the three months ended September 30, 2020 and 2019, are presented below (amounts in millions): Three Months Ended September 30, 2020 Activision Blizzard King Total Segment Net Revenues Net revenues from external customers $ 773 $ 393 $ 536 $ 1,702 Intersegment net revenues (1) — 18 — 18 Segment net revenues $ 773 $ 411 $ 536 $ 1,720 Segment operating income $ 345 $ 133 $ 248 $ 726 Three Months Ended September 30, 2019 Activision Blizzard King Total Segment Net Revenues Net revenues from external customers $ 209 $ 392 $ 500 $ 1,101 Intersegment net revenues (1) — 2 — 2 Segment net revenues $ 209 $ 394 $ 500 $ 1,103 Segment operating income $ 26 $ 74 $ 194 $ 294 Information on reportable segment net revenues and operating income for the nine months ended September 30, 2020 and 2019, are presented below (amounts in millions): Nine Months Ended September 30, 2020 Activision Blizzard King Total Segment Net Revenues Net revenues from external customers $ 2,285 $ 1,264 $ 1,587 $ 5,136 Intersegment net revenues (1) — 62 — 62 Segment net revenues $ 2,285 $ 1,326 $ 1,587 $ 5,198 Segment operating income $ 1,088 $ 533 $ 615 $ 2,236 Nine Months Ended September 30, 2019 Activision Blizzard King Total Segment Net Revenues Net revenues from external customers $ 794 $ 1,113 $ 1,527 $ 3,434 Intersegment net revenues (1) — 9 — 9 Segment net revenues $ 794 $ 1,122 $ 1,527 $ 3,443 Segment operating income $ 153 $ 204 $ 543 $ 900 (1) Intersegment revenues reflect licensing and service fees charged between segments. Reconciliations of total segment net revenues and total segment operating income to consolidated net revenues and consolidated income before income tax expense are presented in the table below (amounts in millions): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Reconciliation to consolidated net revenues: Segment net revenues $ 1,720 $ 1,103 $ 5,198 $ 3,443 Revenues from non-reportable segments (1) 65 113 232 245 Net effect from recognition (deferral) of deferred net revenues (2) 187 68 306 824 Elimination of intersegment revenues (3) (18) (2) (62) (9) Consolidated net revenues $ 1,954 $ 1,282 $ 5,674 $ 4,503 Reconciliation to consolidated income before income tax expense: Segment operating income $ 726 $ 294 $ 2,236 $ 900 Operating income (loss) from non-reportable segments (1) (20) 5 (27) 10 Net effect from recognition (deferral) of deferred net revenues and related cost of revenues (2) 150 53 169 629 Share-based compensation expense (53) (27) (138) (127) Amortization of intangible assets (16) (50) (62) (151) Restructuring and related costs (4) (9) (28) (39) (108) Consolidated operating income 778 247 2,139 1,153 Interest and other expense (income), net 25 (2) 55 (33) Loss on extinguishment of debt 31 — 31 — Consolidated income before income tax expense $ 722 $ 249 $ 2,053 $ 1,186 (1) Includes other income and expenses from operating segments managed outside the reportable segments, including our Distribution business. Also includes unallocated corporate income and expenses. (2) Reflects the net effect from recognition (deferral) of deferred net revenues, along with related cost of revenues, on certain of our online-enabled products. (3) Intersegment revenues reflect licensing and service fees charged between segments. (4) Reflects restructuring initiatives, which include severance and other restructuring-related costs. |
Schedule of net revenues by distribution channels | Net revenues by distribution channel, including a reconciliation to each of our reportable segment’s revenues, for the three months ended September 30, 2020 and 2019, were as follows (amounts in millions): Three Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by distribution channel: Digital online channels (1) $ 826 $ 405 $ 540 $ — $ (18) $ 1,753 Retail channels 110 7 — — — 117 Other (2) 8 11 — 65 — 84 Total consolidated net revenues $ 944 $ 423 $ 540 $ 65 $ (18) $ 1,954 Change in deferred revenues: Digital online channels (1) $ (130) $ (14) $ (4) $ — $ — $ (148) Retail channels (41) 2 — — — (39) Other (2) — — — — — — Total change in deferred revenues $ (171) $ (12) $ (4) $ — $ — $ (187) Segment net revenues: Digital online channels (1) $ 696 $ 391 $ 536 $ — $ (18) $ 1,605 Retail channels 69 9 — — — 78 Other (2) 8 11 — 65 — 84 Total segment net revenues $ 773 $ 411 $ 536 $ 65 $ (18) $ 1,767 Three Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by distribution channel: Digital online channels (1) $ 179 $ 335 $ 502 $ — $ (2) $ 1,014 Retail channels 73 20 — — — 93 Other (2) — 62 — 113 — 175 Total consolidated net revenues $ 252 $ 417 $ 502 $ 113 $ (2) $ 1,282 Change in deferred revenues: Digital online channels (1) $ (16) $ (21) $ (2) $ — $ — $ (39) Retail channels (27) (2) — — — (29) Other (2) — — — — — — Total change in deferred revenues $ (43) $ (23) $ (2) $ — $ — $ (68) Segment net revenues: Digital online channels (1) $ 163 $ 314 $ 500 $ — $ (2) $ 975 Retail channels 46 18 — — — 64 Other (2) — 62 — 113 — 175 Total segment net revenues $ 209 $ 394 $ 500 $ 113 $ (2) $ 1,214 Net revenues by distribution channel, including a reconciliation to each of our reportable segment’s revenues, for the nine months ended September 30, 2020 and 2019, were as follows (amounts in millions): Nine Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by distribution channel: Digital online channels (1) $ 2,054 $ 1,203 $ 1,587 $ — $ (62) $ 4,782 Retail channels 485 23 1 — — 509 Other (2) 55 87 — 241 — 383 Total consolidated net revenues $ 2,594 $ 1,313 $ 1,588 $ 241 $ (62) $ 5,674 Change in deferred revenues: Digital online channels (1) $ (16) $ 16 $ (1) $ — $ — $ (1) Retail channels (293) (2) — — — (295) Other (2) — (1) — (9) — (10) Total change in deferred revenues $ (309) $ 13 $ (1) $ (9) $ — $ (306) Segment net revenues: Digital online channels (1) $ 2,038 $ 1,219 $ 1,586 $ — $ (62) $ 4,781 Retail channels 192 21 1 — — 214 Other (2) 55 86 — 232 — 373 Total segment net revenues $ 2,285 $ 1,326 $ 1,587 $ 232 $ (62) $ 5,368 Nine Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by distribution channel: Digital online channels (1) $ 894 $ 1,081 $ 1,527 $ — $ (9) $ 3,493 Retail channels 548 51 — — — 599 Other (2) — 157 — 254 — 411 Total consolidated net revenues $ 1,442 $ 1,289 $ 1,527 $ 254 $ (9) $ 4,503 Change in deferred revenues: Digital online channels (1) $ (285) $ (159) $ — $ — $ — $ (444) Retail channels (363) (10) — — — (373) Other (2) — 2 — (9) — (7) Total change in deferred revenues $ (648) $ (167) $ — $ (9) $ — $ (824) Segment net revenues: Digital online channels (1) $ 609 $ 922 $ 1,527 $ — $ (9) $ 3,049 Retail channels 185 41 — — — 226 Other (2) — 159 — 245 — 404 Total segment net revenues $ 794 $ 1,122 $ 1,527 $ 245 $ (9) $ 3,679 (1) Net revenues from “Digital online channels” include revenues from digitally-distributed subscriptions, downloadable content, microtransactions, and products, as well as licensing royalties. (2) Net revenues from “Other” include revenues from our Distribution business, the Overwatch League, and the Call of Duty League. (3) Intersegment revenues reflect licensing and service fees charged between segments. |
Schedule of net revenues by geographic region | Geographic information presented below is based on the location of the paying customer. Net revenues by geographic region, including a reconciliation to each of our reportable segment’s net revenues, for the three months ended September 30, 2020 and 2019, were as follows (amounts in millions): Three Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (2) Total Net revenues by geographic region: Americas $ 595 $ 192 $ 350 $ — $ (10) $ 1,127 EMEA (1) 263 131 136 65 (6) 589 Asia Pacific 86 100 54 — (2) 238 Total consolidated net revenues $ 944 $ 423 $ 540 $ 65 $ (18) $ 1,954 Change in deferred revenues: Americas $ (77) $ (4) $ (4) $ — $ (1) $ (86) EMEA (1) (68) (8) — — 1 (75) Asia Pacific (26) — — — — (26) Total change in deferred revenues $ (171) $ (12) $ (4) $ — $ — $ (187) Segment net revenues: Americas $ 518 $ 188 $ 346 $ — $ (11) $ 1,041 EMEA (1) 195 123 136 65 (5) 514 Asia Pacific 60 100 54 — (2) 212 Total segment net revenues $ 773 $ 411 $ 536 $ 65 $ (18) $ 1,767 Three Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (2) Total Net revenues by geographic region: Americas $ 141 $ 204 $ 311 $ — $ (1) $ 655 EMEA (1) 79 124 137 113 (1) 452 Asia Pacific 32 89 54 — — 175 Total consolidated net revenues $ 252 $ 417 $ 502 $ 113 $ (2) $ 1,282 Change in deferred revenues: Americas $ (20) $ (11) $ (2) $ — $ — $ (33) EMEA (1) (16) (10) — — — (26) Asia Pacific (7) (2) — — — (9) Total change in deferred revenues $ (43) $ (23) $ (2) $ — $ — $ (68) Segment net revenues: Americas $ 121 $ 193 $ 309 $ — $ (1) $ 622 EMEA (1) 63 114 137 113 (1) 426 Asia Pacific 25 87 54 — — 166 Total segment net revenues $ 209 $ 394 $ 500 $ 113 $ (2) $ 1,214 Net revenues by geographic region, including a reconciliation to each of our reportable segment’s net revenues, for the nine months ended September 30, 2020 and 2019, were as follows (amounts in millions): Nine Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (2) Total Net revenues by geographic region: Americas $ 1,615 $ 580 $ 1,024 $ — $ (31) $ 3,188 EMEA (1) 750 393 407 241 (21) 1,770 Asia Pacific 229 340 157 — (10) 716 Total consolidated net revenues $ 2,594 $ 1,313 $ 1,588 $ 241 $ (62) $ 5,674 Change in deferred revenues: Americas $ (124) $ 18 $ — $ — $ — $ (106) EMEA (1) (146) (3) (1) (9) — (159) Asia Pacific (39) (2) — — — (41) Total change in deferred revenues $ (309) $ 13 $ (1) $ (9) $ — $ (306) Segment net revenues: Americas $ 1,491 $ 598 $ 1,024 $ — $ (31) $ 3,082 EMEA (1) 604 390 406 232 (21) 1,611 Asia Pacific 190 338 157 — (10) 675 Total segment net revenues $ 2,285 $ 1,326 $ 1,587 $ 232 $ (62) $ 5,368 Nine Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (2) Total Net revenues by geographic region: Americas $ 852 $ 613 $ 946 $ — $ (5) $ 2,406 EMEA (1) 457 400 417 254 (3) 1,525 Asia Pacific 133 276 164 — (1) 572 Total consolidated net revenues $ 1,442 $ 1,289 $ 1,527 $ 254 $ (9) $ 4,503 Change in deferred revenues: Americas $ (390) $ (80) $ 1 $ — $ — $ (469) EMEA (1) (205) (71) — (9) — (285) Asia Pacific (53) (16) (1) — — (70) Total change in deferred revenues $ (648) $ (167) $ — $ (9) $ — $ (824) Segment net revenues: Americas $ 462 $ 533 $ 947 $ — $ (5) $ 1,937 EMEA (1) 252 329 417 245 (3) 1,240 Asia Pacific 80 260 163 — (1) 502 Total segment net revenues $ 794 $ 1,122 $ 1,527 $ 245 $ (9) $ 3,679 (1) “EMEA” consists of the Europe, Middle East, and Africa geographic regions. (2) Intersegment revenues reflect licensing and service fees charged between segments. |
Schedule of net revenues by platform | Net revenues by platform, including a reconciliation to each of our reportable segment’s net revenues, for the three months ended September 30, 2020 and 2019, were as follows (amounts in millions): Three Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by platform: Console $ 664 $ 31 $ — $ — $ — $ 695 PC 152 357 23 — (18) 514 Mobile and ancillary (1) 120 24 517 — — 661 Other (2) 8 11 — 65 — 84 Total consolidated net revenues $ 944 $ 423 $ 540 $ 65 $ (18) $ 1,954 Change in deferred revenues: Console $ (125) $ (4) $ — $ — $ — $ (129) PC (35) (9) (1) — — (45) Mobile and ancillary (1) (11) 1 (3) — — (13) Other (2) — — — — — — Total change in deferred revenues $ (171) $ (12) $ (4) $ — $ — $ (187) Segment net revenues: Console $ 539 $ 27 $ — $ — $ — $ 566 PC 117 348 22 — (18) 469 Mobile and ancillary (1) 109 25 514 — — 648 Other (2) 8 11 — 65 — 84 Total segment net revenues $ 773 $ 411 $ 536 $ 65 $ (18) $ 1,767 Three Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by platform: Console $ 214 $ 27 $ — $ — $ — $ 241 PC 29 286 28 — (2) 341 Mobile and ancillary (1) 9 42 474 — — 525 Other (2) — 62 — 113 — 175 Total consolidated net revenues $ 252 $ 417 $ 502 $ 113 $ (2) $ 1,282 Change in deferred revenues: Console $ (36) $ (9) $ — $ — $ — $ (45) PC (7) (14) — — — (21) Mobile and ancillary (1) — — (2) — — (2) Other (2) — — — — — — Total change in deferred revenues $ (43) $ (23) $ (2) $ — $ — $ (68) Segment net revenues: Console $ 178 $ 18 $ — $ — $ — $ 196 PC 22 272 28 — (2) 320 Mobile and ancillary (1) 9 42 472 — — 523 Other (2) — 62 — 113 — 175 Total segment net revenues $ 209 $ 394 $ 500 $ 113 $ (2) $ 1,214 Net revenues by platform, including a reconciliation to each of our reportable segment’s net revenues, for the nine months ended September 30, 2020 and 2019, were as follows (amounts in millions): Nine Months Ended September 30, 2020 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by platform: Console $ 1,855 $ 89 $ — $ — $ — $ 1,944 PC 423 1,060 73 — (62) 1,494 Mobile and ancillary (1) 261 77 1,515 — — 1,853 Other (2) 55 87 — 241 — 383 Total consolidated net revenues $ 2,594 $ 1,313 $ 1,588 $ 241 $ (62) $ 5,674 Change in deferred revenues: Console $ (295) $ (6) $ — $ — $ — $ (301) PC (50) 24 (1) — — (27) Mobile and ancillary (1) 36 (4) — — — 32 Other (2) — (1) — (9) — (10) Total change in deferred revenues $ (309) $ 13 $ (1) $ (9) $ — $ (306) Segment net revenues: Console $ 1,560 $ 83 $ — $ — $ — $ 1,643 PC 373 1,084 72 — (62) 1,467 Mobile and ancillary (1) 297 73 1,515 — — 1,885 Other (2) 55 86 — 232 — 373 Total segment net revenues $ 2,285 $ 1,326 $ 1,587 $ 232 $ (62) $ 5,368 Nine Months Ended September 30, 2019 Activision Blizzard King Non-reportable segments Elimination of intersegment revenues (3) Total Net revenues by platform: Console $ 1,222 $ 102 $ — $ — $ — $ 1,324 PC 204 909 92 — (9) 1,196 Mobile and ancillary (1) 16 121 1,435 — — 1,572 Other (2) — 157 — 254 — 411 Total consolidated net revenues $ 1,442 $ 1,289 $ 1,527 $ 254 $ (9) $ 4,503 Change in deferred revenues: Console $ (563) $ (26) $ — $ — $ — $ (589) PC (84) (133) (1) — — (218) Mobile and ancillary (1) (1) (10) 1 — — (10) Other (2) — 2 — (9) — (7) Total change in deferred revenues $ (648) $ (167) $ — $ (9) $ — $ (824) Segment net revenues: Console $ 659 $ 76 $ — $ — $ — $ 735 PC 120 776 91 — (9) 978 Mobile and ancillary (1) 15 111 1,436 — — 1,562 Other (2) — 159 — 245 — 404 Total segment net revenues $ 794 $ 1,122 $ 1,527 $ 245 $ (9) $ 3,679 (1) Net revenues from “Mobile and ancillary” include revenues from mobile devices, as well as non-platform specific game-related revenues, such as standalone sales of physical merchandise and accessories. (2) Net revenues from “Other” include revenues from our Distribution business, the Overwatch League, and the Call of Duty League. (3) Intersegment revenues reflect licensing and service fees charged between segments. |
Long-lived assets by geographic region | Long-lived assets by geographic region were as follows (amounts in millions): At September 30, 2020 At December 31, 2019 Long-lived assets (1) by geographic region: Americas $ 269 $ 322 EMEA 174 142 Asia Pacific 16 21 Total long-lived assets by geographic region $ 459 $ 485 (1) The only long-lived assets that we classify by region are our long-term tangible fixed assets, which consist of property, plant, and equipment assets, and our lease right-of-use assets; all other long-term assets are not allocated by location. |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Accrued Restructuring Included in Accrued Expenses and Other Liabilities and Charges by Reportable Segment | The following table summarizes accrued restructuring and related costs included in “Accrued expenses and other liabilities” in our condensed consolidated balance sheet and the cumulative charges incurred (amounts in millions): Severance and employee-related costs Facilities and related costs Other costs Total Balance at December 31, 2019 $ 32 $ — $ 3 $ 35 Costs charged to expense 23 — — 23 Cash payments (6) — (2) (8) Balance at March 31, 2020 $ 49 $ — $ 1 $ 50 Costs charged to expense 3 — 1 4 Cash payments (3) — (2) (5) Balance at June 30, 2020 $ 49 $ — $ — $ 49 Costs charged to expense 6 3 — 9 Cash payments (7) — — (7) Non-cash charge adjustment (1) — (3) — (3) Balance at September 30, 2020 $ 48 $ — $ — $ 48 Cumulative charges incurred through September 30, 2020 $ 108 $ 32 $ 33 $ 173 (1) Adjustments relate to non-cash charges included in “Costs charged to expense” for the write-down of assets for our lease facilities that were vacated. |
Schedule of Restructuring and Related Costs by Segment and Expected Pre-tax Restructuring Charges | Total restructuring and related costs by segment are (amounts in millions): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Activision $ 1 $ 1 $ 5 $ 12 Blizzard 7 12 30 52 King 1 4 (1) 17 Other segments (1) — 7 2 23 Total $ 9 $ 24 $ 36 $ 104 (1) Includes charges related to operating segments managed outside the reportable segments, including our Distribution business. Also includes restructuring charges for our corporate and administrative functions. The total charges incurred through September 30, 2020 and total expected pre-tax restructuring charges related to the $190 million restructuring plan, by segment, inclusive of amounts already incurred, are presented below (amounts in millions): Total Charges Incurred Through September 30, 2020 Total Charges Expected as of September 30, 2020 Activision $ 24 $ 25 Blizzard 103 105 King 19 20 Other segments (1) 27 40 Total $ 173 $ 190 (1) Includes charges related to operating segments managed outside the reportable segments, including our Distribution business. Also includes restructuring charges for our corporate and administrative functions. |
Interest and Other Expense (I_2
Interest and Other Expense (Income), Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Interest and other investment income (expense) | Interest and other expense (income), net is comprised of the following (amounts in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Interest income $ (1) $ (20) $ (20) $ (61) Interest expense from debt and amortization of debt discount and deferred financing costs 27 23 72 68 Unrealized gain on equity investment (3) — (3) (38) Other expense (income), net 2 (5) 6 (2) Interest and other expense (income), net $ 25 $ (2) $ 55 $ (33) |
Computation of Basic_Diluted _2
Computation of Basic/Diluted Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of computation of earnings per share | The following table sets forth the computation of basic and diluted earnings per common share (amounts in millions, except per share data): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Consolidated net income $ 604 $ 204 $ 1,688 $ 978 Denominator: Denominator for basic earnings per common share—weighted-average common shares outstanding 772 767 771 766 Effect of potential dilutive common shares under the treasury stock method—employee stock options and awards 7 4 6 4 Denominator for basic earnings per common share—weighted-average dilutive common shares outstanding 779 771 777 770 Basic earnings per common share $ 0.78 $ 0.27 $ 2.19 $ 1.28 Diluted earnings per common share $ 0.78 $ 0.26 $ 2.17 $ 1.27 |
Schedule of antidilutive securities excluded from computation of earnings per share | Weighted-average shares excluded from the computation of diluted earnings per share were as follows (amounts in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Restricted stock units and options with performance measures not yet met 3 4 2 3 Anti-dilutive employee stock options — 6 1 6 |
Description of Business and B_3
Description of Business and Basis of Consolidation and Presentation (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Software Development and Inte_3
Software Development and Intellectual Property Licenses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Software development and intellectual property licenses: | |||||
Internally-developed software costs | $ 510 | $ 510 | $ 345 | ||
Payments made to third-party software developers | 33 | 33 | 31 | ||
Total software development costs | 543 | 543 | $ 376 | ||
Amortization: | |||||
Amortization of capitalized software development costs and intellectual property licenses | $ 37 | $ 11 | $ 149 | $ 175 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets | |||||
Gross carrying amount, definite-lived intangible assets | $ 1,828 | $ 1,828 | $ 1,828 | ||
Accumulated amortization, definite-lived intangible assets | (1,792) | (1,792) | (1,730) | ||
Net carrying amount, definite-lived intangible assets | 36 | 36 | 98 | ||
Indefinite Lived Intangible Assets | |||||
Net carrying amount, indefinite-lived intangible assets | 433 | 433 | 433 | ||
Total intangible assets, net | 469 | 469 | 531 | ||
Amortization Expense Disclosure | |||||
Amortization expense | 16 | $ 50 | 62 | $ 152 | |
Activision trademark | |||||
Indefinite Lived Intangible Assets | |||||
Net carrying amount, indefinite-lived intangible assets | 386 | 386 | 386 | ||
Acquired trade names | |||||
Indefinite Lived Intangible Assets | |||||
Net carrying amount, indefinite-lived intangible assets | 47 | 47 | 47 | ||
Internally-developed franchises | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount, definite-lived intangible assets | 1,154 | 1,154 | 1,154 | ||
Accumulated amortization, definite-lived intangible assets | (1,139) | (1,139) | (1,105) | ||
Net carrying amount, definite-lived intangible assets | 15 | $ 15 | $ 49 | ||
Internally-developed franchises | Minimum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 3 years | 3 years | |||
Internally-developed franchises | Maximum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 11 years | 11 years | |||
Developed software | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount, definite-lived intangible assets | 601 | $ 601 | $ 601 | ||
Accumulated amortization, definite-lived intangible assets | (600) | (600) | (579) | ||
Net carrying amount, definite-lived intangible assets | 1 | $ 1 | $ 22 | ||
Developed software | Minimum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 2 years | 2 years | |||
Developed software | Maximum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 5 years | 5 years | |||
Acquired trade names | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 7 years | ||||
Gross carrying amount, definite-lived intangible assets | 54 | $ 54 | $ 54 | ||
Accumulated amortization, definite-lived intangible assets | (36) | (36) | (30) | ||
Net carrying amount, definite-lived intangible assets | 18 | 18 | $ 24 | ||
Acquired trade names | Minimum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 7 years | ||||
Acquired trade names | Maximum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 10 years | ||||
Other | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount, definite-lived intangible assets | 19 | 19 | $ 19 | ||
Accumulated amortization, definite-lived intangible assets | (17) | (17) | (16) | ||
Net carrying amount, definite-lived intangible assets | $ 2 | $ 2 | $ 3 | ||
Other | Minimum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 1 year | 1 year | |||
Other | Maximum | |||||
Finite-Lived Intangible Assets | |||||
Estimated useful life | 10 years | 15 years |
Intangible Assets, Net - Sche_2
Intangible Assets, Net - Schedule of Future Amortization (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Definite-lived intangible assets, future amortization expense disclosure | ||
2020 (remaining three months) | $ 17 | |
2021 | 10 | |
2022 | 7 | |
2023 | 1 | |
2024 | 0 | |
Thereafter | 1 | |
Net carrying amount, definite-lived intangible assets | $ 36 | $ 98 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | ||
Goodwill | $ 9,764 | $ 9,764 |
Activision | ||
Goodwill [Line Items] | ||
Goodwill | 6,898 | 6,898 |
Blizzard | ||
Goodwill [Line Items] | ||
Goodwill | 190 | 190 |
King | ||
Goodwill [Line Items] | ||
Goodwill | $ 2,676 | $ 2,676 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | $ 7,341 | $ 5,422 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 7,341 | 5,422 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 0 | 0 |
Cash and cash equivalents | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 7,121 | 5,320 |
Cash and cash equivalents | Foreign government treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 33 | 37 |
Cash and cash equivalents | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 7,121 | 5,320 |
Cash and cash equivalents | Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign government treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 33 | 37 |
Cash and cash equivalents | Significant Other Observable Inputs (Level 2) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 0 | 0 |
Cash and cash equivalents | Significant Other Observable Inputs (Level 2) | Foreign government treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 0 | 0 |
Cash and cash equivalents | Significant Unobservable Inputs (Level 3) | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 0 | 0 |
Cash and cash equivalents | Significant Unobservable Inputs (Level 3) | Foreign government treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 0 | 0 |
Other current assets | U.S. treasuries and government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 187 | 65 |
Other current assets | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. treasuries and government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 187 | 65 |
Other current assets | Significant Other Observable Inputs (Level 2) | U.S. treasuries and government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 0 | 0 |
Other current assets | Significant Unobservable Inputs (Level 3) | U.S. treasuries and government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total assets at fair value | 0 | 0 |
Accrued expenses and other liabilities | Foreign currency forward contracts | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total liabilities at fair value | (1) | (2) |
Accrued expenses and other liabilities | Foreign currency forward contracts | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total liabilities at fair value | (18) | (2) |
Accrued expenses and other liabilities | Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign currency forward contracts | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total liabilities at fair value | 0 | 0 |
Accrued expenses and other liabilities | Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign currency forward contracts | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total liabilities at fair value | 0 | 0 |
Accrued expenses and other liabilities | Significant Other Observable Inputs (Level 2) | Foreign currency forward contracts | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total liabilities at fair value | (1) | (2) |
Accrued expenses and other liabilities | Significant Other Observable Inputs (Level 2) | Foreign currency forward contracts | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total liabilities at fair value | (18) | (2) |
Accrued expenses and other liabilities | Significant Unobservable Inputs (Level 3) | Foreign currency forward contracts | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total liabilities at fair value | 0 | 0 |
Accrued expenses and other liabilities | Significant Unobservable Inputs (Level 3) | Foreign currency forward contracts | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total liabilities at fair value | $ 0 | $ 0 |
Fair Value Measurements - Forei
Fair Value Measurements - Foreign Currency Forward Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Derivatives, Fair Value [Line Items] | |||||
Net revenues | $ 1,954 | $ 1,282 | $ 5,674 | $ 4,503 | |
Buy USD, Sell Euro | Designated as Hedging Instrument | Cash Flow Hedging | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional amount | 608 | 608 | $ 350 | ||
Fair value gain (loss) | (18) | (18) | (2) | ||
Foreign currency forward contracts | Cash Flow Hedging | Reclassification out of Accumulated Other Comprehensive Income | |||||
Derivatives, Fair Value [Line Items] | |||||
Net revenues | (5) | $ 7 | $ 7 | $ 24 | |
Foreign currency forward contracts | Designated as Hedging Instrument | Cash Flow Hedging | |||||
Derivatives, Fair Value [Line Items] | |||||
Contract maturity (or less) | 13 months | ||||
Buy USD, Sell GBP | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional amount | 61 | $ 61 | 25 | ||
Fair value gain (loss) | $ (1) | $ (1) | $ (2) |
Deferred revenues (Details)
Deferred revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||||
Deferred revenues | $ 1,100 | $ 1,100 | $ 1,400 | ||
Revenue recognized included in beginning deferred revenue | $ 54 | $ 100 | $ 1,300 | $ 1,400 |
Deferred revenues - Remaining P
Deferred revenues - Remaining Performance Obligation (Details) $ in Billions | Sep. 30, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contracted not recognized revenue | $ 1.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contracted not recognized revenue | $ 1.4 |
Contracted not recognized revenue, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contracted not recognized revenue | $ 0.4 |
Contracted not recognized revenue, period | 1 year |
Debt - Credit Facilities (Detai
Debt - Credit Facilities (Details) - Revolver - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 1,500 | $ 1,500 |
Long-term line of credit | $ 0 |
Debt - Unsecured Senior Notes (
Debt - Unsecured Senior Notes (Details) - USD ($) $ in Millions | Sep. 04, 2020 | Aug. 05, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||||
Amount outstanding | $ 3,650 | $ 3,650 | $ 2,700 | ||||
Amount of new debt raised | 1,994 | $ 0 | |||||
Debt discount and financing costs | 46 | 46 | $ 25 | ||||
Loss on extinguishment of debt | $ 31 | $ 0 | $ 31 | $ 0 | |||
Unsecured Debt | Unsecured 2030 and 2050 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Amount of new debt raised | $ 2,000 | ||||||
Debt discount and financing costs | $ 26 | ||||||
Unsecured Debt | Unsecured 2030 and 2050 Notes | Debt Instrument, Redemption, Period One | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 100.00% | ||||||
Unsecured Debt | Unsecured 2030 and 2050 Notes | Debt Instrument, Redemption, Period Two | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 100.00% | ||||||
Unsecured Debt | Unsecured 2021 and 2022 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price percentage | 100.00% | ||||||
Make-whole premium | $ 28 | ||||||
Loss on extinguishment of debt | $ 31 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Total gross long-term debt | $ 3,650 | $ 2,700 |
Unamortized discount and deferred financing costs | (46) | (25) |
Total net carrying amount | $ 3,604 | $ 2,675 |
Unsecured Debt | Unsecured 2021 Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.30% | |
Total gross long-term debt | $ 650 | |
Unsecured Debt | Unsecured 2021 Notes | Significant Other Observable Inputs (Level 2) | ||
Debt Instrument [Line Items] | ||
Fair Value (Level 2) | $ 653 | |
Unsecured Debt | Unsecured 2022 Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.60% | |
Total gross long-term debt | $ 400 | |
Unsecured Debt | Unsecured 2022 Notes | Significant Other Observable Inputs (Level 2) | ||
Debt Instrument [Line Items] | ||
Fair Value (Level 2) | $ 405 | |
Unsecured Debt | Unsecured 2026 Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.40% | 3.40% |
Total gross long-term debt | $ 850 | $ 850 |
Unsecured Debt | Unsecured 2026 Notes | Significant Other Observable Inputs (Level 2) | ||
Debt Instrument [Line Items] | ||
Fair Value (Level 2) | $ 968 | $ 893 |
Unsecured Debt | Unsecured 2027 Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.40% | 3.40% |
Total gross long-term debt | $ 400 | $ 400 |
Unsecured Debt | Unsecured 2027 Notes | Significant Other Observable Inputs (Level 2) | ||
Debt Instrument [Line Items] | ||
Fair Value (Level 2) | $ 453 | $ 417 |
Unsecured Debt | Unsecured 2030 Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.35% | |
Total gross long-term debt | $ 500 | |
Unsecured Debt | Unsecured 2030 Notes | Significant Other Observable Inputs (Level 2) | ||
Debt Instrument [Line Items] | ||
Fair Value (Level 2) | $ 488 | |
Unsecured Debt | Unsecured 2047 Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.50% | 4.50% |
Total gross long-term debt | $ 400 | $ 400 |
Unsecured Debt | Unsecured 2047 Notes | Significant Other Observable Inputs (Level 2) | ||
Debt Instrument [Line Items] | ||
Fair Value (Level 2) | $ 508 | $ 456 |
Unsecured Debt | Unsecured 2050 Notes | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.50% | |
Total gross long-term debt | $ 1,500 | |
Unsecured Debt | Unsecured 2050 Notes | Significant Other Observable Inputs (Level 2) | ||
Debt Instrument [Line Items] | ||
Fair Value (Level 2) | $ 1,386 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | $ 12,805 | $ 11,392 |
Other comprehensive income (loss) before reclassifications | (6) | 26 |
Amounts reclassified from accumulated other comprehensive income (loss) into earnings | (8) | (32) |
Ending balance | 14,382 | 12,235 |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (624) | (629) |
Other comprehensive income (loss) before reclassifications | 13 | (5) |
Amounts reclassified from accumulated other comprehensive income (loss) into earnings | (2) | 0 |
Ending balance | (613) | (634) |
Unrealized gain (loss) on forward contracts | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | 8 | 23 |
Other comprehensive income (loss) before reclassifications | (19) | 28 |
Amounts reclassified from accumulated other comprehensive income (loss) into earnings | (7) | (24) |
Ending balance | (18) | 27 |
Unrealized gain (loss) on available-for-sale securities | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (3) | 5 |
Other comprehensive income (loss) before reclassifications | 0 | 3 |
Amounts reclassified from accumulated other comprehensive income (loss) into earnings | 1 | (8) |
Ending balance | (2) | 0 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (619) | (601) |
Ending balance | $ (633) | $ (607) |
Operating Segments and Geogra_3
Operating Segments and Geographic Region (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 3 | ||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | $ 1,767 | $ 1,214 | $ 5,368 | $ 3,679 | |
Operating income | 778 | 247 | 2,139 | 1,153 | |
Net effect from recognition (deferral) of deferred net revenues | (187) | (68) | (306) | (824) | |
Net revenues | 1,954 | 1,282 | 5,674 | 4,503 | |
Amortization of intangible assets | (16) | (50) | (62) | (152) | |
Restructuring costs | (9) | (24) | (39) | (104) | |
Interest and other expense (income), net (Note 12) | 25 | (2) | 55 | (33) | |
Loss on extinguishment of debt | 31 | 0 | 31 | 0 | |
Income before income tax expense | 722 | 249 | 2,053 | 1,186 | |
Long-lived assets | 459 | 459 | $ 485 | ||
Digital online channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 1,605 | 975 | 4,781 | 3,049 | |
Net effect from recognition (deferral) of deferred net revenues | (148) | (39) | (1) | (444) | |
Net revenues | 1,753 | 1,014 | 4,782 | 3,493 | |
Retail channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 78 | 64 | 214 | 226 | |
Net effect from recognition (deferral) of deferred net revenues | (39) | (29) | (295) | (373) | |
Net revenues | 117 | 93 | 509 | 599 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 84 | 175 | 373 | 404 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | (10) | (7) | |
Net revenues | 84 | 175 | 383 | 411 | |
Console | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 566 | 196 | 1,643 | 735 | |
Net effect from recognition (deferral) of deferred net revenues | (129) | (45) | (301) | (589) | |
Net revenues | 695 | 241 | 1,944 | 1,324 | |
PC | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 469 | 320 | 1,467 | 978 | |
Net effect from recognition (deferral) of deferred net revenues | (45) | (21) | (27) | (218) | |
Net revenues | 514 | 341 | 1,494 | 1,196 | |
Mobile and ancillary | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 648 | 523 | 1,885 | 1,562 | |
Net effect from recognition (deferral) of deferred net revenues | (13) | (2) | 32 | (10) | |
Net revenues | 661 | 525 | 1,853 | 1,572 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 84 | 175 | 373 | 404 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | (10) | (7) | |
Net revenues | 84 | 175 | 383 | 411 | |
Americas | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 1,041 | 622 | 3,082 | 1,937 | |
Net effect from recognition (deferral) of deferred net revenues | (86) | (33) | (106) | (469) | |
Net revenues | 1,127 | $ 655 | 3,188 | $ 2,406 | |
Long-lived assets | $ 269 | $ 269 | 322 | ||
US | Revenues | Geographic Concentration Risk | |||||
Segment Reporting Information [Line Items] | |||||
Revenues as a percentage of consolidated net revenues | 50.00% | 46.00% | 50.00% | 48.00% | |
EMEA | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | $ 514 | $ 426 | $ 1,611 | $ 1,240 | |
Net effect from recognition (deferral) of deferred net revenues | (75) | (26) | (159) | (285) | |
Net revenues | 589 | $ 452 | 1,770 | $ 1,525 | |
Long-lived assets | $ 174 | $ 174 | 142 | ||
UK | Revenues | Geographic Concentration Risk | |||||
Segment Reporting Information [Line Items] | |||||
Revenues as a percentage of consolidated net revenues | 9.00% | 13.00% | 10.00% | 10.00% | |
Asia Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | $ 212 | $ 166 | $ 675 | $ 502 | |
Net effect from recognition (deferral) of deferred net revenues | (26) | (9) | (41) | (70) | |
Net revenues | 238 | 175 | 716 | 572 | |
Long-lived assets | 16 | 16 | $ 21 | ||
Reportable segments | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 1,720 | 1,103 | 5,198 | 3,443 | |
Operating income | 726 | 294 | 2,236 | 900 | |
Reportable segments | Net revenues from external customers | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 1,702 | 1,101 | 5,136 | 3,434 | |
Reportable segments | Intersegment net revenues | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 18 | 2 | 62 | 9 | |
Reportable segments | Activision | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 773 | 209 | 2,285 | 794 | |
Operating income | 345 | 26 | 1,088 | 153 | |
Net effect from recognition (deferral) of deferred net revenues | (171) | (43) | (309) | (648) | |
Net revenues | 944 | 252 | 2,594 | 1,442 | |
Reportable segments | Activision | Net revenues from external customers | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 773 | 209 | 2,285 | 794 | |
Reportable segments | Activision | Intersegment net revenues | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Reportable segments | Activision | Digital online channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 696 | 163 | 2,038 | 609 | |
Net effect from recognition (deferral) of deferred net revenues | (130) | (16) | (16) | (285) | |
Net revenues | 826 | 179 | 2,054 | 894 | |
Reportable segments | Activision | Retail channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 69 | 46 | 192 | 185 | |
Net effect from recognition (deferral) of deferred net revenues | (41) | (27) | (293) | (363) | |
Net revenues | 110 | 73 | 485 | 548 | |
Reportable segments | Activision | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 8 | 0 | 55 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 8 | 0 | 55 | 0 | |
Reportable segments | Activision | Console | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 539 | 178 | 1,560 | 659 | |
Net effect from recognition (deferral) of deferred net revenues | (125) | (36) | (295) | (563) | |
Net revenues | 664 | 214 | 1,855 | 1,222 | |
Reportable segments | Activision | PC | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 117 | 22 | 373 | 120 | |
Net effect from recognition (deferral) of deferred net revenues | (35) | (7) | (50) | (84) | |
Net revenues | 152 | 29 | 423 | 204 | |
Reportable segments | Activision | Mobile and ancillary | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 109 | 9 | 297 | 15 | |
Net effect from recognition (deferral) of deferred net revenues | (11) | 0 | 36 | (1) | |
Net revenues | 120 | 9 | 261 | 16 | |
Reportable segments | Activision | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 8 | 0 | 55 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 8 | 0 | 55 | 0 | |
Reportable segments | Activision | Americas | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 518 | 121 | 1,491 | 462 | |
Net effect from recognition (deferral) of deferred net revenues | (77) | (20) | (124) | (390) | |
Net revenues | 595 | 141 | 1,615 | 852 | |
Reportable segments | Activision | EMEA | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 195 | 63 | 604 | 252 | |
Net effect from recognition (deferral) of deferred net revenues | (68) | (16) | (146) | (205) | |
Net revenues | 263 | 79 | 750 | 457 | |
Reportable segments | Activision | Asia Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 60 | 25 | 190 | 80 | |
Net effect from recognition (deferral) of deferred net revenues | (26) | (7) | (39) | (53) | |
Net revenues | 86 | 32 | 229 | 133 | |
Reportable segments | Blizzard | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 411 | 394 | 1,326 | 1,122 | |
Operating income | 133 | 74 | 533 | 204 | |
Net effect from recognition (deferral) of deferred net revenues | (12) | (23) | 13 | (167) | |
Net revenues | 423 | 417 | 1,313 | 1,289 | |
Reportable segments | Blizzard | Net revenues from external customers | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 393 | 392 | 1,264 | 1,113 | |
Reportable segments | Blizzard | Intersegment net revenues | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 18 | 2 | 62 | 9 | |
Reportable segments | Blizzard | Digital online channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 391 | 314 | 1,219 | 922 | |
Net effect from recognition (deferral) of deferred net revenues | (14) | (21) | 16 | (159) | |
Net revenues | 405 | 335 | 1,203 | 1,081 | |
Reportable segments | Blizzard | Retail channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 9 | 18 | 21 | 41 | |
Net effect from recognition (deferral) of deferred net revenues | 2 | (2) | (2) | (10) | |
Net revenues | 7 | 20 | 23 | 51 | |
Reportable segments | Blizzard | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 11 | 62 | 86 | 159 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | (1) | 2 | |
Net revenues | 11 | 62 | 87 | 157 | |
Reportable segments | Blizzard | Console | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 27 | 18 | 83 | 76 | |
Net effect from recognition (deferral) of deferred net revenues | (4) | (9) | (6) | (26) | |
Net revenues | 31 | 27 | 89 | 102 | |
Reportable segments | Blizzard | PC | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 348 | 272 | 1,084 | 776 | |
Net effect from recognition (deferral) of deferred net revenues | (9) | (14) | 24 | (133) | |
Net revenues | 357 | 286 | 1,060 | 909 | |
Reportable segments | Blizzard | Mobile and ancillary | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 25 | 42 | 73 | 111 | |
Net effect from recognition (deferral) of deferred net revenues | 1 | 0 | (4) | (10) | |
Net revenues | 24 | 42 | 77 | 121 | |
Reportable segments | Blizzard | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 11 | 62 | 86 | 159 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | (1) | 2 | |
Net revenues | 11 | 62 | 87 | 157 | |
Reportable segments | Blizzard | Americas | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 188 | 193 | 598 | 533 | |
Net effect from recognition (deferral) of deferred net revenues | (4) | (11) | 18 | (80) | |
Net revenues | 192 | 204 | 580 | 613 | |
Reportable segments | Blizzard | EMEA | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 123 | 114 | 390 | 329 | |
Net effect from recognition (deferral) of deferred net revenues | (8) | (10) | (3) | (71) | |
Net revenues | 131 | 124 | 393 | 400 | |
Reportable segments | Blizzard | Asia Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 100 | 87 | 338 | 260 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | (2) | (2) | (16) | |
Net revenues | 100 | 89 | 340 | 276 | |
Reportable segments | King | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 536 | 500 | 1,587 | 1,527 | |
Operating income | 248 | 194 | 615 | 543 | |
Net effect from recognition (deferral) of deferred net revenues | (4) | (2) | (1) | 0 | |
Net revenues | 540 | 502 | 1,588 | 1,527 | |
Reportable segments | King | Net revenues from external customers | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 536 | 500 | 1,587 | 1,527 | |
Reportable segments | King | Intersegment net revenues | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Reportable segments | King | Digital online channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 536 | 500 | 1,586 | 1,527 | |
Net effect from recognition (deferral) of deferred net revenues | (4) | (2) | (1) | 0 | |
Net revenues | 540 | 502 | 1,587 | 1,527 | |
Reportable segments | King | Retail channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 1 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 1 | 0 | |
Reportable segments | King | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Reportable segments | King | Console | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Reportable segments | King | PC | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 22 | 28 | 72 | 91 | |
Net effect from recognition (deferral) of deferred net revenues | (1) | 0 | (1) | (1) | |
Net revenues | 23 | 28 | 73 | 92 | |
Reportable segments | King | Mobile and ancillary | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 514 | 472 | 1,515 | 1,436 | |
Net effect from recognition (deferral) of deferred net revenues | (3) | (2) | 0 | 1 | |
Net revenues | 517 | 474 | 1,515 | 1,435 | |
Reportable segments | King | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Reportable segments | King | Americas | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 346 | 309 | 1,024 | 947 | |
Net effect from recognition (deferral) of deferred net revenues | (4) | (2) | 0 | 1 | |
Net revenues | 350 | 311 | 1,024 | 946 | |
Reportable segments | King | EMEA | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 136 | 137 | 406 | 417 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | (1) | 0 | |
Net revenues | 136 | 137 | 407 | 417 | |
Reportable segments | King | Asia Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 54 | 54 | 157 | 163 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | (1) | |
Net revenues | 54 | 54 | 157 | 164 | |
Non-reportable segments | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 65 | 113 | 232 | 245 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | (9) | (9) | |
Net revenues | 65 | 113 | 241 | 254 | |
Non-reportable segments | Digital online channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Non-reportable segments | Retail channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Non-reportable segments | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 65 | 113 | 232 | 245 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | (9) | (9) | |
Net revenues | 65 | 113 | 241 | 254 | |
Non-reportable segments | Console | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Non-reportable segments | PC | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Non-reportable segments | Mobile and ancillary | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Non-reportable segments | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 65 | 113 | 232 | 245 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | (9) | (9) | |
Net revenues | 65 | 113 | 241 | 254 | |
Non-reportable segments | Americas | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Non-reportable segments | EMEA | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 65 | 113 | 232 | 245 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | (9) | (9) | |
Net revenues | 65 | 113 | 241 | 254 | |
Non-reportable segments | Asia Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Elimination of intersegment revenues | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | (18) | (2) | (62) | (9) | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | (18) | (2) | (62) | (9) | |
Elimination of intersegment revenues | Digital online channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | (18) | (2) | (62) | (9) | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | (18) | (2) | (62) | (9) | |
Elimination of intersegment revenues | Retail channels | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Elimination of intersegment revenues | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Elimination of intersegment revenues | Console | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Elimination of intersegment revenues | PC | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | (18) | (2) | (62) | (9) | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | (18) | (2) | (62) | (9) | |
Elimination of intersegment revenues | Mobile and ancillary | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Elimination of intersegment revenues | Other | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | 0 | 0 | 0 | 0 | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | 0 | 0 | 0 | 0 | |
Elimination of intersegment revenues | Americas | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | (11) | (1) | (31) | (5) | |
Net effect from recognition (deferral) of deferred net revenues | (1) | 0 | 0 | 0 | |
Net revenues | (10) | (1) | (31) | (5) | |
Elimination of intersegment revenues | EMEA | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | (5) | (1) | (21) | (3) | |
Net effect from recognition (deferral) of deferred net revenues | 1 | 0 | 0 | 0 | |
Net revenues | (6) | (1) | (21) | (3) | |
Elimination of intersegment revenues | Asia Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenues | (2) | 0 | (10) | (1) | |
Net effect from recognition (deferral) of deferred net revenues | 0 | 0 | 0 | 0 | |
Net revenues | (2) | 0 | (10) | (1) | |
Reconciling items | |||||
Segment Reporting Information [Line Items] | |||||
Net effect from recognition (deferral) of deferred net revenues | 187 | 68 | 306 | 824 | |
Net effect from recognition (deferral) of deferred net revenues and related cost of revenues | 150 | 53 | 169 | 629 | |
Share-based compensation expense | (53) | (27) | (138) | (127) | |
Amortization of intangible assets | (16) | (50) | (62) | (151) | |
Restructuring costs | (9) | (28) | (39) | (108) | |
Reconciling items | Other segments | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | $ (20) | $ 5 | $ (27) | $ 10 |
Restructuring - Schedule of Acc
Restructuring - Schedule of Accrued Restructuring Included in Accrued Expenses and Other Liabilities by Cost Type (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 21 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | |
Restructuring Reserve [Roll Forward] | |||||||
Costs charged to expense | $ 9 | $ 24 | $ 39 | $ 104 | |||
Costs charged to expense | 9 | 24 | 39 | 104 | |||
2019 Restructuring | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Balance, beginning | 49 | $ 50 | $ 35 | 35 | |||
Costs charged to expense | 9 | 4 | 23 | 24 | 36 | 104 | $ 173 |
Cash payments | (7) | (5) | (8) | ||||
Non-cash charge adjustment | (3) | ||||||
Balance, ending | 48 | 49 | 50 | 48 | 48 | ||
Costs charged to expense | 9 | 4 | 23 | $ 24 | 36 | $ 104 | 173 |
2019 Restructuring | Severance and employee-related costs | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Balance, beginning | 49 | 49 | 32 | 32 | |||
Costs charged to expense | 6 | 3 | 23 | 108 | |||
Cash payments | (7) | (3) | (6) | ||||
Non-cash charge adjustment | 0 | ||||||
Balance, ending | 48 | 49 | 49 | 48 | 48 | ||
Costs charged to expense | 6 | 3 | 23 | 108 | |||
2019 Restructuring | Facilities and related costs | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Balance, beginning | 0 | 0 | 0 | 0 | |||
Costs charged to expense | 3 | 0 | 0 | 32 | |||
Cash payments | 0 | 0 | 0 | ||||
Non-cash charge adjustment | (3) | ||||||
Balance, ending | 0 | 0 | 0 | 0 | 0 | ||
Costs charged to expense | 3 | 0 | 0 | 32 | |||
2019 Restructuring | Other costs | |||||||
Restructuring Reserve [Roll Forward] | |||||||
Balance, beginning | 0 | 1 | 3 | 3 | |||
Costs charged to expense | 0 | 1 | 0 | 33 | |||
Cash payments | 0 | (2) | (2) | ||||
Non-cash charge adjustment | 0 | ||||||
Balance, ending | 0 | 0 | 1 | $ 0 | 0 | ||
Costs charged to expense | $ 0 | $ 1 | $ 0 | $ 33 |
Restructuring - Total Restructu
Restructuring - Total Restructuring and Related Costs by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 21 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | $ 9 | $ 24 | $ 39 | $ 104 | |||
2019 Restructuring | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | 9 | $ 4 | $ 23 | 24 | 36 | 104 | $ 173 |
2019 Restructuring | Activision | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | 1 | 1 | 5 | 12 | 24 | ||
2019 Restructuring | Blizzard | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | 7 | 12 | 30 | 52 | 103 | ||
2019 Restructuring | King | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | 1 | 4 | (1) | 17 | 19 | ||
2019 Restructuring | Other segments | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | $ 0 | $ 7 | $ 2 | $ 23 | $ 27 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - 2019 Restructuring - USD ($) $ in Millions | Oct. 27, 2020 | Sep. 30, 2020 |
Restructuring Cost and Reserve [Line Items] | ||
Total expected pre-tax restructuring charges | $ 190 | |
Subsequent Event | ||
Restructuring Cost and Reserve [Line Items] | ||
Total expected pre-tax restructuring charges | $ 310 | |
Percentage expected to be paid with cash on hand | 70.00% | |
Severance and employee-related costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Percentage of aggregate charge | 60.00% | |
Severance and employee-related costs | Subsequent Event | ||
Restructuring Cost and Reserve [Line Items] | ||
Percentage of aggregate charge | 60.00% | |
Facilities and related costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Percentage of aggregate charge | 20.00% | |
Facilities and related costs | Subsequent Event | ||
Restructuring Cost and Reserve [Line Items] | ||
Percentage of aggregate charge | 20.00% | |
Other costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Percentage of aggregate charge | 20.00% | |
Other costs | Subsequent Event | ||
Restructuring Cost and Reserve [Line Items] | ||
Percentage of aggregate charge | 20.00% |
Restructuring - Schedule of Tot
Restructuring - Schedule of Total Expected Pre-tax Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 21 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | $ 9 | $ 24 | $ 39 | $ 104 | |||
2019 Restructuring | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | 9 | $ 4 | $ 23 | 24 | 36 | 104 | $ 173 |
Total Charges Expected as of September 30, 2020 | 190 | 190 | 190 | ||||
2019 Restructuring | Activision | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | 1 | 1 | 5 | 12 | 24 | ||
Total Charges Expected as of September 30, 2020 | 25 | 25 | 25 | ||||
2019 Restructuring | Blizzard | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | 7 | 12 | 30 | 52 | 103 | ||
Total Charges Expected as of September 30, 2020 | 105 | 105 | 105 | ||||
2019 Restructuring | King | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | 1 | 4 | (1) | 17 | 19 | ||
Total Charges Expected as of September 30, 2020 | 20 | 20 | 20 | ||||
2019 Restructuring | Other segments | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related costs | 0 | $ 7 | 2 | $ 23 | 27 | ||
Total Charges Expected as of September 30, 2020 | $ 40 | $ 40 | $ 40 |
Interest and Other Expense (I_3
Interest and Other Expense (Income), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | ||||
Interest income | $ (1) | $ (20) | $ (20) | $ (61) |
Interest expense from debt and amortization of debt discount and deferred financing costs | 27 | 23 | 72 | 68 |
Unrealized gain on equity investment | (3) | 0 | (3) | (38) |
Other expense (income), net | 2 | (5) | 6 | (2) |
Interest and other expense (income), net | $ 25 | $ (2) | $ 55 | $ (33) |
Income Taxes (Details)
Income Taxes (Details) € in Millions, $ in Millions, kr in Billions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2020USD ($) | Jan. 31, 2020EUR (€) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018SEK (kr) | Dec. 31, 2017USD ($) | Dec. 31, 2017EUR (€) | |
Income Tax [Line Items] | |||||||||||
Income tax expense | $ 118 | $ 45 | $ 365 | $ 208 | |||||||
Effective tax rate (in percent) | 16.00% | 18.00% | 18.00% | 18.00% | |||||||
Statutory income tax rate (in percent) | 21.00% | ||||||||||
Swedish Tax Agency | |||||||||||
Income Tax [Line Items] | |||||||||||
Total assessment, including penalties and interest, not recorded | $ 386 | kr 3.5 | |||||||||
French Tax Authority | |||||||||||
Income Tax [Line Items] | |||||||||||
Total assessment, including penalties and interest, not recorded | $ 666 | € 571 | |||||||||
Tax expense related to tax settlement | $ 54 | ||||||||||
Tax payments, including interest and penalties | $ 188 | € 161 |
Computation of Basic_Diluted _3
Computation of Basic/Diluted Earnings Per Common Share - Computation EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||||||
Consolidated net income | $ 604 | $ 580 | $ 505 | $ 204 | $ 328 | $ 447 | $ 1,688 | $ 978 |
Denominator: | ||||||||
Denominator for basic earnings per common share - weighted-average common shares outstanding (in shares) | 772 | 767 | 771 | 766 | ||||
Employee stock options and awards (in shares) | 7 | 4 | 6 | 4 | ||||
Denominator for diluted earnings per common share - weighted-average common shares outstanding plus dilutive common shares under treasury stock method (in shares) | 779 | 771 | 777 | 770 | ||||
Basic earnings per common share (in dollars per share) | $ 0.78 | $ 0.27 | $ 2.19 | $ 1.28 | ||||
Diluted earnings per common share (in dollars per share) | $ 0.78 | $ 0.26 | $ 2.17 | $ 1.27 |
Computation of Basic_Diluted _4
Computation of Basic/Diluted Earnings Per Common Share - Weighted-Average Shares Excluded from the Computation of Diluted Earnings Per Share (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Restricted stock units and options with underlying performance measures that had not yet been met (in shares) | 3 | 4 | 2 | 3 |
Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive options to purchase shares of common stock (in shares) | 0 | 6 | 1 | 6 |
Capital Transactions - Repurcha
Capital Transactions - Repurchase Program (Details) - Share Repurchase Program 2019 - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Jan. 31, 2019 | |
Share Repurchase Program [Line Items] | ||
Share repurchase program, dollar amount authorized | $ 1,500,000,000 | |
Shares of common stock repurchased (in shares) | 0 | |
Cost of common stock repurchased under the stock repurchase program | $ 0 |
Capital Transactions - Dividend
Capital Transactions - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | May 06, 2020 | Feb. 06, 2020 | May 09, 2019 | Feb. 12, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Dividends | ||||||||
Dividends per common share (in dollars per share) | $ 0.41 | $ 0.37 | $ 0.41 | $ 0.37 | ||||
Cash dividend payment | $ 316 | $ 283 | $ 316 | $ 283 |