Activision Blizzard

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Activision Blizzard, Inc.
Public
Traded as
ISIN US00507V1098
Industry Video game industry
Founded July 10, 2008; 10 years ago (2008-07-10)[1]
Headquarters Santa Monica, California, U.S.
Key people
Products
Revenue Increase US$7.017 billion[2] (2017)
Decrease US$1.309 billion[2] (2017)
Decrease US$0.274 billion[2] (2017)
Total assets Increase US$18.668 billion[2] (2017)
Total equity Increase US$9.462 billion[2] (2017)
Number of employees
Increase 9,625[3] (2018)
Subsidiaries
Website activisionblizzard.com

Activision Blizzard, Inc. is an American video game holding company.[4] Headquartered in Santa Monica, California and founded in 2008[5] through the merger of Activision and Vivendi's games operatings, the company is traded on the NASDAQ stock exchange under the ticker symbol NASDAQATVI,[6] and since 2015 has been one of the stocks that make up the S&P 500.[5] Activision Blizzard currently includes five business units:[7] Activision, Blizzard Entertainment, Major League Gaming,[8] Activision Blizzard Studios,[9][10] and King.[11]

The company owns and operates additional studios under an independent studios model, including Treyarch, Infinity Ward, High Moon Studios and Toys for Bob,[7] and its titles have broken a number of release records.[12] Call of Duty: Black Ops III grossed $550 million in worldwide sales during its opening weekend in 2015, making it the biggest entertainment launch of the year.[13][14] The company's franchises also include Activision's Call of Duty,[15] Destiny,[16] and Skylanders;[17] Blizzard Entertainment's World of Warcraft, StarCraft,[7] Diablo, Hearthstone, Heroes of the Storm, and Overwatch; and King's Candy Crush Saga, Pet Rescue Saga, and Farm Heroes Saga.[11] As of March 2018, it is the largest game company in the Americas and Europe in terms of revenue and market capitalization.[18]

History[edit]

Formation (2007–08)[edit]

In December 2007, Activision announced that the company and its assets would merge with fellow games developer and publisher Vivendi Games. At the time, Vivendi was best known as the holding company for the game studios Sierra Entertainment and Blizzard Entertainment. The new company was to be named Activision Blizzard, and would retain its central headquarters in California. Bobby Kotick of Activision was announced as the new president and CEO, while René Penisson of Vivendi was appointed chairman.[19] The European Commission permitted the merger to take place in April 2008, approving that there weren't any antitrust issues in the merger deal.[20] On July 8, 2008, Activision announced that stockholders had agreed to merge, and the deal closed the next day for an estimated transaction amount of US$18.9 billion.[21]

Vivendi was the majority shareholder, with a 52% stake in the company.[21][22] The rest of the shares were held by institutional and private investors, and were to be left open for trading on the NASDAQ stock market for a time under NASDAQATVID, and subsequently as NASDAQATVI (Activision's stock ticker). At this point, Jean-Bernard Levy replaced René Penisson as chairman of Activision Blizzard.[6] The merger made Activision Blizzard the parent company of Vivendi Games' former divisions.[23] While Blizzard retained its autonomy and corporate leadership in the merger, other Vivendi Games divisions such as Sierra ceased operation.[24] With the merger, Kotick was quoted stating if a Sierra product did not meet Activision's requirements, they "won't likely be retained."[24] However, a number of Sierra's games such as Crash Bandicoot, Spyro the Dragon and Prototype were retained and are now published by Activision.[25]

New titles and sales records (2009–12)[edit]

Activision Blizzard does not publish games under its central name and instead uses its studios to publish games.[26] In early 2010, the independent studio Bungie entered into a 10-year publishing agreement with Activision Blizzard.[27][28] By the end of 2010, Activision Blizzard was the largest video games publisher in the world.[29] The 2011 release of Activision Blizzard's Call of Duty: Modern Warfare 3 grossed $400 million in the US and UK alone in its first 24 hours, making it the biggest entertainment launch of all time.[15] It was also the third consecutive year the Call of Duty series broke the biggest launch record; 2010's Call of Duty: Black Ops grossed $360 million on day one; and 2009's Call of Duty: Modern Warfare 2 brought in $310 million.[12] Call of Duty: Black Ops III grossed $550 million in worldwide sales during its opening weekend in 2015, making it the biggest entertainment launch of the year.[13][14]

In 2011, Activision Blizzard debuted its Skylanders franchise,[17] which led to the press crediting the company with inventing and popularizing a new toys-to-life category.[17][30][31] The first release Skylanders: Spyro's Adventure was nominated for two Toy Industry Association awards in 2011: "Game of the Year" and "Innovative Toy of the Year".[32] Skylanders: Spyro's Adventure and its sequels were released for major consoles and PC, and many were released on mobile devices as well.[17]

Split from Vivendi and growth (2013–14)[edit]

Activision Blizzard at Gamescom 2013, where the company exhibited 2013 titles such as Call of Duty: Ghosts and Skylanders: Swap Force.

On July 25, 2013, Activision Blizzard announced the purchase of 429 million shares from owner Vivendi for $5.83 billion, dropping the shareholder from a 63% stake to 11.8% by the end of the deal in September.[33] At the conclusion of the deal, Vivendi was no longer Activision Blizzard's parent company,[34] and Activision Blizzard became an independent company as a majority of the shares became owned by the public. Bobby Kotick and Brian Kelly retained a 24.4% stake in the company overall. In addition, Kotick remained the president and CEO, with Brian Kelly taking over as chairman.[33] On October 12, 2013, shortly after approval from the Delaware Supreme Court, the company completed the buyback, along the lines of the original plan.[35] Vivendi sold half its remaining stake on May 22, 2014, reducing its ownership to 5.8%.[36] and completely exited two years later.[37]

Activision Blizzard released a new title, Destiny, on September 9, 2014. The game made over $500 million in retail sales on the first day of release, setting a record for the biggest first day launch of a new gaming franchise.[16] On November 5, 2013, the company released Call of Duty: Ghosts, which was written by screenwriter Stephen Gaghan.[38] On its first release day the game sold $1 billion into retail.[16] In 2014, Activision Blizzard was the fifth largest gaming company by revenue worldwide,[39] with total assets of US $14.746 billion and total equity estimated at US $7.513 billion.[40]

S&P 500 and new divisions (2015–16)[edit]

Activision Blizzard joined the S&P 500 on August 28, 2015, becoming one of only two companies on the list related to gaming, alongside Electronic Arts.[5] The company released the next iteration of the Skylanders franchise in September 2015, which added vehicles to the "toys to life" category.[41] On September 15, 2015, Activision and Bungie released Destiny: The Taken King, the follow up to the Destiny saga. Two days later, Sony announced that the game broke the record for the most downloaded day-one game in PlayStation history, in terms of both total players and peak online concurrency.[42]

Activision Blizzard announced on November 2, 2015 that it would acquire social gaming company King, creator of the popular casual game Candy Crush Saga, for $5.9 billion.[11] At an Investor Day presentation on November 6, 2015, in the wake of the Warcraft feature film, Activision Blizzard announced the formation of Activision Blizzard Studios, a film production division dedicated to creating original television series and films. Headed by producer Stacey Sher and former The Walt Disney Company executive Nick van Dyk, Activision Blizzard Studios would look to produce an animated television series based on Skylanders called Skylanders Academy and films based on the Call of Duty franchise,[10] and partner with Legendary Pictures on possible sequels to the Warcraft movie.

Activision Blizzard owns the Call of Duty and Starcraft franchises, both of which have been popular as esports.[8][43] On October 21, 2015, Activision Blizzard announced the upcoming establishment of a new e-sports division.[9] Named Activision Blizzard Media Networks, the division is led by sports executive Steve Bornstein and Major League Gaming (MLG) co-founder Mike Sepso, with assets from the acquisition of the now defunct IGN Pro League. Bornstein was appointed the new division's chairman.[8][43] On December 31, 2015, it was reported that "substantially all" of Major League Gaming's assets would be acquired by Activision Blizzard.[8][43] The New York Times reported that the acquisition was intended to bolster Activision Blizzard's push into e-sports, as well as its plan to develop an e-sports cable channel.[44] Reports indicated that MLG would be shuttered, and that the majority of the purchase price would go towards paying off the company's debt.[8][43] Activision Blizzard acquired MLG on January 4, 2016[44] for $46 million.[8][43] In November 2016, it announced the Overwatch League. In June 2017, it joined the Fortune 500 becoming the third gaming company in history to make the list after Atari, and Electronic Arts.[45]

Products[edit]

Legal[edit]

In 2009, Business Insider reported that Worlds.com was claiming it owned the patent to "the idea of a scalable virtual world with thousands of users," with the company's CEO asserting that "he intends to sue anyone who refuses to enter into licensing negotiations - including giants such as Second Life and World of Warcraft.[46] On March 30, 2012, Worlds Inc. filed a patent infringement lawsuit in Massachusetts Federal Court alleging Activision Blizzard had infringed on two patents involving 3-D virtual environments.[47] The lawsuit focused on the Call of Duty and World of Warcraft franchises,[48] and during pre-trial oral arguments, Activision Blizzard lead counsel was quoted stating "billions were at stake."[49] Activision Publishing filed a separate patent infringement lawsuit in California on October 4, 2013,[47] asserting that Worlds, Inc. was using two Activision-owned patents in its Worlds Player software.[50]

In March 2014,[51] a Boston court ruled that Activision was not required to pay Worlds.com "for using talking avatars in popular online titles like World of Warcraft," with the judge clarifying that "the patents belonging to Worlds Inc. appear invalid because the inventions they describe already appeared in public before the patents were filed." Worlds Inc. was limited to only suing Activision Blizzard for "future acts of infringement." Indeed, the Patents themselves at that time were not deemed invalid, rather the Certificate of Correction issued by the USPTO (United States Patent and Trade Office) to cure a defect in the prosecution (filed after the Lawsuit started) required that the Federal Lawsuit be refiled in order to take advantage of the earlier patent priority date. Worlds opted to allow the case to move forward, preserving the timeline and eliminating Activision Blizzards opportunity to directly file a USPTO Patent and Appeal Board challenge. Activision had not exercised its right to file a USPTO appeal to challenge the patents in question during the 1 year statutory time period. In response, Worlds.com announced they would instead be pursuing the recent release Call of Duty: Ghosts for damages.[52] The Worlds, Inc. case against Activision Blizzard was heard on October 3, 2014, with results still unannounced by the end of the year.[53] On June 26, 2015, the Massachusetts courts released a ruling that clarified technical terms for the lawsuit.[54] On November 28, 2016, the United States Patent and Appeal Board ruled claims 5 and 7 valid on US Patent 7493558.[55] The challenge of the US Patent 7493558 was instituted by Bungie.[56]

See also[edit]

References[edit]

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External links[edit]