今年 4 月 4 日，微软迎来了五十岁「生日」。五十年来，从最初的电脑软件再到如今的人工智能，微软的业务不断扩展外延，这其中也离不开与其他公司 的合作乃至并购。 不久前，少数派更新了一篇《那些被 Apple 收购的公司，现在怎么样了？》，下面评论区里便有人提到「想看看微软的」，不得不说这个选题极大吸引了 我的兴趣。的确，无论苹果、微软还是其他科技公司，其发展都离不开与其他公司的合作乃至并购。 而在微软收购的公司中，有些在收购前就已为人所知，比如较早的 Hotmail，以及后来的 Skype、Mojang，以及近些年的 GitHub、动视暴雪等等，有些则 是在被微软收购后才以微软的产品为人们所知。一些收购给微软带来了收益，但其中也不乏一些失败的收购。正值微软五十周年之际，下面就整理了一些 微软具有代表性的收购事件，也算是从一个侧面记录微软五十年来的发展历程。 微软五十周年纪念宣传画。来源：微软网站 ▍Forethought Forethought 这家公司可能听说的人不多，但提起它的一款产品相信大家一定都知道：PowerPoint。 1983 年末，Rob Campbell和 Taylor Pohlman 成立 ...

Financial Performance - Consolidated net revenues for Q2 2023 increased 34% to $2.2 billion, with operating income rising 72% to $583 million compared to Q2 2022[149]. - For the first half of 2023, consolidated net revenues increased 35% to $4.6 billion, and operating income increased 69% to $1.4 billion compared to the same period in 2022[149]. - Diluted earnings per share for Q2 2023 increased 106% to $0.74, and for the first half of 2023, it increased 94% to $1.67 compared to 2022[149]. - Cash flows from operating activities for the first half of 2023 were approximately $1.2 billion, an increase of 39% compared to $0.8 billion in 2022[149]. - Consolidated net revenues for Q2 2023 reached $2.207 billion, a 34% increase from $1.644 billion in Q2 2022[182]. - Total net revenues for Q2 2023 were $2.207 billion, a 34% increase from $1.644 billion in Q2 2022, with in-game and subscription revenues making up 76% of total revenues[179]. - The company reported a total of $4,590 million in consolidated net revenues for the six months ended June 30, 2023, up from $3,412 million in the same period of 2022, representing a 34.4% increase[202]. - For the six months ended June 30, 2023, consolidated net revenues increased by $1.3 billion, primarily driven by higher revenues from key franchises including Call of Duty and Diablo[185]. Merger and Legal Matters - The company has a merger agreement with Microsoft for $95.00 per share, with a potential reverse termination fee of $3.0 billion, increasing to $3.5 billion after August 29, 2023[134][135]. - The United Kingdom Competition and Markets Authority has blocked the merger, citing competition concerns, and Microsoft is appealing this decision[141]. - The company is subject to legal proceedings regarding workplace matters, which are impacting its operations[143]. Revenue Breakdown - Net bookings for Q2 2023 reached $2.461 billion, a 30% increase from $1.637 billion in Q2 2022, driven by significant contributions from Blizzard, Activision, and King[159]. - In-game net bookings for Q2 2023 were $1.562 billion, up 30% from $1.197 billion in Q2 2022, with Blizzard's Diablo IV being a major driver[161]. - For the six months ended June 30, 2023, net bookings totaled $4.316 billion, a 30% increase from $3.119 billion in the same period of 2022[159]. - The company's three franchises—Call of Duty, Warcraft, and Candy Crush—accounted for 79% of consolidated net revenues in 2022, highlighting their importance to overall performance[171]. - Activision segment net revenues for Q2 2023 were $574 million, while Blizzard and King segments reported $1.058 billion and $747 million respectively[190]. - Segment operating income for Activision was $167 million, Blizzard $409 million, and King $266 million for Q2 2023[190]. Costs and Expenses - Total cost of revenues for the six months ended June 30, 2023, was $1,321 million, a 37% increase from $964 million for the same period in 2022[217]. - Product costs for the six months ended June 30, 2023, increased by $80 million to $252 million, representing 21% of associated net revenues[219]. - Game operations and distribution costs for the six months ended June 30, 2023, increased by $131 million to $736 million, maintaining 22% of associated net revenues[219]. - Product development costs for the six months ended June 30, 2023, were $807 million, an increase of $149 million from $658 million in the same period in 2022[223]. - Sales and marketing expenses for the six months ended June 30, 2023, increased by $97 million to $611 million, representing 13% of consolidated net revenues[227]. - General and administrative expenses for the six months ended June 30, 2023, were $468 million, a slight increase of $9 million from $459 million in the same period in 2022[230]. Workplace and Diversity Initiatives - The company has made significant progress towards its workplace excellence goals, including a commitment of $250 million to accelerate opportunities for diverse talent within gaming and technology over the next ten years[263]. - The Company established an $18 million fund as part of a settlement with the EEOC to address claims related to workplace misconduct, with 15,176 individuals covered by the consent decree[276]. - The EEOC conducted a comprehensive investigation involving surveys from over 6,000 current and former employees regarding gender harassment from 2018 to 2021[273]. - The Company intends to release its "Transparency Report" annually, detailing data related to harassment, discrimination, and retaliation[271]. - The Company has taken significant steps to maintain a safe and inclusive workplace culture, with the Board holding ten discussions focused on workplace culture in three quarters of 2022[290]. Cash and Investments - As of June 30, 2023, the company held cash and cash equivalents of $10.77 billion, an increase of $3.71 billion from $7.06 billion as of December 31, 2022[245]. - Net cash provided by operating activities for the six months ended June 30, 2023, was $1.17 billion, up from $840 million for the same period in 2022, reflecting an increase of $327 million[246]. - Net cash provided by investing activities for the six months ended June 30, 2023, was $2.63 billion, compared to a net cash used of $253 million in the same period of 2022, marking an increase of $2.88 billion[249]. - The total gross long-term debt remained stable at $3.65 billion as of June 30, 2023, with a weighted average interest rate of 2.87%[252]. Currency and Interest Rate Risks - The Company is exposed to foreign currency exchange rate risks, with a hypothetical 10% adverse movement potentially leading to a decline in net income of approximately $80 million[296]. - The Company does not hold foreign currency forward contracts for trading or speculative purposes, focusing instead on hedging activities[295]. - Material movements in short-term interest rates by the U.S. Federal Reserve can significantly impact the Company's future interest income[298].

Financial Performance - Consolidated net revenues for the three months ended March 31, 2023, increased 35% to $2.4 billion, compared to $1.8 billion in 2022[130] - Consolidated operating income for the same period increased 67% to $800 million, up from $479 million in 2022[130] - Diluted earnings per common share rose 86% to $0.93, compared to $0.50 in 2022[130] - For the three months ended March 31, 2023, total net revenues increased by 35% to $2,383 million compared to $1,768 million for the same period in 2022[156] - In-game net revenues rose by 26% to $1,430 million for the three months ended March 31, 2023, up from $1,134 million in the prior year[157] - The increase in consolidated net revenues was primarily driven by higher revenues from Call of Duty: Modern Warfare II, Diablo Immortal, World of Warcraft, Overwatch 2, and the Candy Crush franchise, totaling an increase of $734 million[158] - Operating income for the three months ended March 31, 2023, was $800 million, representing a 67% increase from $479 million in the same period of 2022[154] - Segment net revenues for Activision increased to $1,762 million, driven by higher revenues from Call of Duty: Modern Warfare II compared to Call of Duty: Vanguard[169] - Blizzard's segment net revenues rose due to higher revenues from Diablo Immortal, Overwatch 2, and World of Warcraft, although operating income remained comparable to the previous year[170] - King's segment net revenues increased primarily from in-game purchases in the Candy Crush franchise, but operating income was similar to the prior year due to higher costs[171] User Engagement - Monthly active users (MAUs) totaled 368 million as of March 31, 2023, a decrease of 21 million or 5% from 389 million in December 2022[142] - Blizzard's MAUs decreased to 27 million from 45 million in December 2022, primarily due to lower engagement with Overwatch 2[142] - Activision's MAUs fell to 98 million from 111 million in December 2022, driven by lower engagement in the Call of Duty franchise[142] - King’s MAUs increased to 243 million from 233 million in December 2022, supported by the Candy Crush franchise[142] Costs and Expenses - Total costs and expenses for the three months ended March 31, 2023, were $1,583 million, which is 66% of total net revenues, compared to 73% in the same period of 2022[154] - Total cost of revenues increased to $665 million, representing 28% of associated net revenues, up from 27% in the previous year[183] - Product development costs rose to $402 million, accounting for 17% of consolidated net revenues, compared to 20% in the prior year[186] - Sales and marketing expenses increased to $278 million, representing 12% of consolidated net revenues, driven by higher spending for the Candy Crush franchise and Diablo IV[187] - General and administrative expenses increased to $238 million for the three months ended March 31, 2023, representing 10% of consolidated net revenues, up from $212 million in the same period of 2022[188] Cash Flow and Investments - Cash and cash equivalents increased to $9.236 billion as of March 31, 2023, compared to $7.060 billion as of December 31, 2022, marking an increase of $2.176 billion[195] - Net cash provided by operating activities was $577 million for the three months ended March 31, 2023, down from $642 million in the same period of 2022, a decrease of $65 million[199] - Net cash provided by investing activities surged to $1.663 billion for the three months ended March 31, 2023, compared to $7 million in the same period of 2022, an increase of $1.656 billion[200] - Capital expenditures amounted to $37 million during the three months ended March 31, 2023, compared to $15 million in the same period of 2022[205] - The company anticipates total capital expenditures of approximately $100 million in 2023, primarily for computer hardware, leasehold improvements, and software purchases[205] Foreign Exchange and Taxation - The company experienced a negative foreign exchange impact of approximately $66 million on consolidated net revenues for the three months ended March 31, 2023, primarily due to fluctuations in the U.S. dollar against the euro and British pound[160] - Foreign exchange rates negatively impacted segment net revenues by $42 million, primarily due to changes in the value of the U.S. dollar against the euro and British pound[172] - Income tax expense rose to $155 million for the three months ended March 31, 2023, reflecting an effective tax rate of 17%, up from 15% in the same period of 2022[190] Strategic Initiatives - The company is currently involved in a merger agreement with Microsoft, with a proposed acquisition price of $95.00 per share, subject to regulatory approvals[118] - The launch of Diablo Immortal in June 2022 and the upcoming release of Call of Duty: Warzone Mobile in 2023 are part of the company's strategy to expand its mobile gaming presence[145] - The free-to-play business model has gained broader acceptance, contributing to increased player investment and engagement, as seen with Overwatch 2 and Call of Duty: Warzone 2.0 releases[146] Debt and Interest - Total gross long-term debt remained at $3.650 billion as of March 31, 2023, unchanged from December 31, 2022[203] - Interest expense from debt remained stable at $27 million for the three months ended March 31, 2023, consistent with the same period in 2022[189] - Other (income) expense, net, increased to $(122) million for the three months ended March 31, 2023, compared to $(13) million in the same period of 2022, primarily due to a $125 million increase in interest income[189] Market Trends - Digital online channels generated $2,157 million in net revenues, a 36% increase from $1,589 million in the same period last year[175] - The PC platform saw a 74% increase in net revenues, reaching $666 million, compared to $383 million in the prior year[178] - The company's franchises, including Call of Duty, Warcraft, and Candy Crush, accounted for 79% of consolidated net revenues in 2022[147] - The company continues to face challenges in attracting and retaining talent, although recent trends have shown improvement in these areas[151] - As of March 31, 2023, the composition of the investment portfolio indicates that movements in short-term interest rates by the U.S. Federal Reserve can significantly impact future interest income[215]

Merger and Acquisition - The company is in the process of a merger with Microsoft, with an all-cash transaction valued at $95.00 per share[86]. - The merger agreement includes customary closing conditions that must be satisfied or waived prior to completion, including regulatory approvals[92]. - If the merger is not completed, the company may incur a termination fee of approximately $2.27 billion[95]. - The company has experienced disruptions to its business relationships due to the pending merger, which could adversely impact its results of operations[89]. - The merger has diverted management's attention and resources, potentially affecting the execution of other strategic initiatives[90]. - The company is subject to interim covenants that restrict certain business actions until the merger is completed[87]. - The FTC has issued an administrative complaint against the company and Microsoft regarding the merger, alleging potential violations of antitrust laws[99]. - The company may incur significant costs related to the merger, including professional services and transaction costs, regardless of whether the merger is completed[95]. - The merger's completion timeline is uncertain and may be subject to delays due to regulatory approvals[92]. - The company faces risks related to employee retention and morale during the merger process, which could impact its operational capabilities[88]. - The company is in the process of a merger with Microsoft, but completion is uncertain due to conditions beyond their control[101]. - If the merger is not completed by April 18, 2023, either party may terminate the agreement[102]. Economic and Market Risks - Economic risks include inflation, rising interest rates, and political instability, which could adversely affect the company's financial condition[104]. - The company faces challenges in attracting and retaining skilled personnel, which is critical for delivering high-quality content[118]. - The ongoing impacts of COVID-19 remain uncertain, potentially affecting costs and operational results[119]. - Fluctuations in currency exchange rates could negatively impact the company's international sales and expenses[108]. - Consumer preferences are cyclical, and failure to deliver popular content may negatively impact sales[109]. - Competition from larger corporations with greater resources poses a risk to the company's market position[122]. - The company derives substantial revenues from international trade, particularly from Europe and Asia, and expects international sales to continue to be a significant portion of total revenues[144]. - The company’s reliance on a limited number of franchises for revenue means that any decline in popularity could negatively impact its business[125]. - Sales are concentrated among a small number of large customers, increasing vulnerability to collection risks if any of these customers face financial difficulties[150]. - Retail sales remain significant despite a decline in their proportion of total revenue, with potential adverse consequences from losing key retail customers[151]. Operational and Strategic Challenges - The company is increasingly dependent on free-to-play games, which exposes it to risks associated with a small number of consumers generating significant revenue[142]. - The company has experienced significant growth in its business scope, including expansions into esports, advertising, and consumer products, which may create management challenges[133]. - The company relies on third-party platforms for distribution, which can influence product availability and costs, potentially impacting profitability[134]. - The company faces risks from rapid technological changes and must adapt to new business models to remain competitive[128]. - The company may experience negative impacts from unionization efforts within its workforce, which could lead to work stoppages or strikes[126]. - The company is subject to regulatory approval processes in markets like Mainland China, which can affect the release of its products[145]. - The company engages in strategic transactions, which may involve risks such as underperformance of acquired businesses and integration challenges[153]. - The interactive entertainment industry experiences seasonality, with higher sales during the year-end holiday season, making timely product releases critical[154]. - Recurring revenue from subscriptions, such as World of Warcraft, is subject to fluctuations in consumer demand, which could negatively impact business[156]. Legal and Compliance Risks - The company is subject to legal proceedings that could have a material adverse effect on its business and reputation[115]. - The company is involved in various legal claims and investigations that may result in substantial settlements or fines, impacting financial performance[182][183]. - Regulatory changes in key territories could limit product offerings and require costly modifications to comply with new laws[186][190]. - The company is subject to evolving data privacy laws, and non-compliance could lead to significant fines and operational disruptions[192]. - Non-compliance with privacy policies and data protection laws could result in litigation, fines, and damage to the company's reputation, impacting its financial condition[195]. Cybersecurity and Technological Risks - The company has implemented cybersecurity programs to secure data and systems, but effectiveness remains uncertain due to evolving cyberattack techniques[173]. - Cybersecurity breaches could lead to significant sales losses, reputational damage, and additional costs for enhanced security measures[173]. - The company maintains insurance policies, but they may be insufficient to cover all potential losses from cybersecurity incidents or catastrophic events[177]. - Outages or disruptions in technological infrastructure could harm the reliability of products and services, negatively affecting revenue and brand reputation[170]. - The company’s games include virtual economies that are vulnerable to fraud, which can harm revenue and player experience[174]. - The company relies on third-party tools and technologies for game development, which may pose risks if these resources become unavailable[160]. - The use of open-source software carries risks of compliance issues and potential vulnerabilities that could impact proprietary products[161]. Environmental and Regulatory Risks - Climate change poses long-term risks to operations, including potential impacts on infrastructure and supply chain costs[178]. - Changes in tax laws and rates could adversely impact the company's income tax liability and effective tax rate, affecting overall business operations[201]. - The expiration of licensing agreements with NetEase, Inc. has caused interruptions in the Chinese market, allowing competitors to gain ground[159]. - The company recognizes a majority of revenues from video games with online services on a deferred basis, which may change based on evolving accounting standards[203]. - The company faces foreign currency exchange rate risks, with a hypothetical 10% adverse movement potentially leading to a decline in net income of approximately $145 million[341]. - Material movements in short-term interest rates can significantly impact the company's future interest income due to the composition of its investment portfolio[343].

Financial Performance - Total net revenues for the three months ended September 30, 2022, were $1,782 million, a decrease of 14% compared to $2,070 million for the same period in 2021[8]. - Net income for the three months ended September 30, 2022, was $435 million, down 32% from $639 million in the same period last year[10]. - Cash and cash equivalents at the end of the period were $7,769 million, a decrease from $9,736 million at the end of September 30, 2021[12]. - Total current assets increased to $13,110 million as of September 30, 2022, compared to $12,556 million at December 31, 2021[6]. - Total liabilities decreased to $6,812 million as of September 30, 2022, from $7,457 million at December 31, 2021[6]. - Operating income for the nine months ended September 30, 2022, was $1,302 million, a decline of 50% from $2,578 million in the same period of 2021[8]. - The company reported a basic earnings per share of $0.56 for the three months ended September 30, 2022, compared to $0.82 for the same period in 2021[8]. - Cash flows from operating activities for the nine months ended September 30, 2022, were $1,097 million, down from $1,753 million in the same period last year[12]. - The company incurred total costs and expenses of $1,297 million for the three months ended September 30, 2022, compared to $1,246 million for the same period in 2021[8]. - The company’s total assets increased to $25,620 million as of September 30, 2022, from $25,056 million at December 31, 2021[6]. - As of September 30, 2022, total shareholders' equity was $18.808 billion, an increase from $17.599 billion at December 31, 2021[16]. - The company reported a comprehensive income loss of $8 million for the three months ended September 30, 2022[16]. - The company declared dividends of $0.47 per common share, totaling $367 million for the three months ended September 30, 2022[16]. - The company had $1.5 billion available under a revolving credit facility as of September 30, 2022, with no draws made to date[55]. - The gross unsecured senior notes outstanding as of September 30, 2022, amounted to $3.7 billion[57]. - The total net carrying amount of long-term debt as of September 30, 2022, was $3.610 billion[57]. - The company reported segment net revenues of $1.715 billion for the three months ended September 30, 2022, compared to $1.786 billion for the same period in 2021[66]. - Consolidated net revenues for the three months ended September 30, 2022, were $1,782 million, a decrease of 14% from $2,070 million in the same period of 2021[67]. - Segment operating income for the three months ended September 30, 2022, was $616 million, down 16% from $735 million in the prior year[67]. - The company experienced a net effect from the recognition (deferral) of deferred net revenues of $(47) million for the three months ended September 30, 2022, compared to $190 million in the same period of 2021[67]. - The total change in deferred revenues for the nine months ended September 30, 2022, was $(246) million, compared to $(421) million in the same period of 2021[73]. - Total consolidated net revenues for the nine months ended September 30, 2022, were $6,640 million, compared to $6,867 million for the same period in 2021, reflecting a decrease of approximately 3.3%[83]. - The total segment net revenues for the nine months ended September 30, 2022, were $5,867 million, down from $6,200 million in the same period of 2021, indicating a decline of approximately 5.4%[83]. Business Risks and Challenges - Activision Blizzard's forward-looking statements are based on current expectations and projections, which may differ from actual results due to various risks and uncertainties[4]. - The company emphasizes the importance of regulatory approvals for the proposed transaction with Microsoft, which could impact business operations and stock price[4]. - Activision Blizzard acknowledges potential disruptions to its business from the ongoing COVID-19 pandemic and macroeconomic factors, including rising interest rates and supply chain issues[4]. - The company highlights the need to attract and retain skilled personnel amid competition and potential unionization efforts[4]. - Activision Blizzard's reliance on a small number of franchises for revenue concentration poses risks to its financial stability[4]. - The company is subject to various legal proceedings and regulatory scrutiny, which could affect its business operations and reputation[4]. - The company faces risks associated with conducting business outside the U.S., including regulatory compliance and cultural differences[4]. - Activision Blizzard's financial performance is influenced by consumer discretionary spending, which may fluctuate due to economic conditions[4]. - The company is currently under examination by the IRS for federal tax returns from 2012 to 2019, with several state and non-U.S. audits pending[112]. - The company anticipates resolving King's transfer pricing matters through a collaborative process with tax authorities, which may affect profit and loss allocations[112]. - The company is cooperating with an SEC investigation regarding disclosures on employment matters, including responding to subpoenas from the SEC[127]. - The company is involved in various legal proceedings, including a proposed consent decree with the EEOC that includes an $18 million settlement fund for eligible claimants[122]. - The company has faced multiple shareholder derivative actions related to allegations of fiduciary duty breaches and other claims, which are currently in various stages of litigation[126]. - The final resolution of the company's global tax disputes is uncertain, but management does not expect a material adverse effect on the company's consolidated financial position[114]. Mergers and Acquisitions - The company entered into a Merger Agreement with Microsoft for $95.00 per share, expected to close in Microsoft's fiscal year ending June 30, 2023[22]. - The company plans to continue its business operations in the ordinary course until the merger with Microsoft is completed[22]. - The company completed acquisitions of Proletariat Inc. and Peltarion AB for a total purchase price of $152 million, enhancing resources for the Warcraft franchise and AI capabilities[40]. Revenue Streams and Segments - Blizzard's key product offerings include popular franchises such as World of Warcraft and Candy Crush, contributing to its revenue generation through in-game sales and subscriptions[26][28]. - The company maintains a proprietary online gaming platform, Battle.net, facilitating digital distribution and user-generated content[26]. - Digital online channels generated $1,852 million in net revenues for the three months ended September 30, 2022, compared to $1,606 million in the same period of 2021, reflecting a 15% increase[72]. - The digital online channels contributed $4,668 million in net revenues for the nine months ended September 30, 2022, compared to $5,626 million in the same period of 2021, representing a decline of 17%[73]. - The Americas region contributed $999 million in net revenues, representing a 56% share of total revenues[78]. - The EMEA region generated $498 million in net revenues, showing a significant contribution to overall performance[78]. - The Asia Pacific region contributed $285 million in net revenues, indicating a stable market presence[78]. - Segment net revenues for Activision were $2.32 billion, while Blizzard and King reported $1.41 billion and $1.90 billion, respectively[76]. - The company is focusing on expanding its digital offerings and enhancing user engagement through new product developments and market strategies[76]. Upcoming Products and Market Strategies - Upcoming titles include Overwatch 2, Call of Duty: Modern Warfare II, and World of Warcraft: Dragonflight, with expected releases in Q4 2022[166]. - The company is in discussions regarding the renewal of licensing agreements for Blizzard titles in China, which contributed approximately 3% of consolidated net revenues in 2021[167]. Shareholder Returns and Stock Performance - The company declared a cash dividend of $0.47 per common share on February 3, 2022, resulting in an aggregate cash dividend payment of $367 million to shareholders on May 6, 2022[120]. - The company has a stock repurchase program authorized for up to $4 billion, but as of September 30, 2022, no shares had been repurchased under this program[118].

Financial Performance - Total net revenues for the three months ended June 30, 2022, were $1,644 million, a decrease of 28.5% compared to $2,296 million for the same period in 2021[12]. - In-game, subscription, and other revenues for the six months ended June 30, 2022, were $2,722 million, down 18.5% from $3,328 million in the prior year[12]. - Operating income for the three months ended June 30, 2022, was $338 million, a decline of 64.8% from $959 million in the same quarter of 2021[12]. - Net income for the three months ended June 30, 2022, was $280 million, down 68.1% from $876 million for the same period in 2021[12]. - Basic earnings per share for the three months ended June 30, 2022, were $0.36, compared to $1.13 for the same period in 2021, representing a decrease of 68.0%[12]. - Total costs and expenses for the three months ended June 30, 2022, were $1,306 million, a slight decrease of 2.3% from $1,337 million in the same quarter of 2021[12]. - Comprehensive income for the three months ended June 30, 2022, was $275 million, down from $883 million in the same period of 2021[14]. - Consolidated net revenues for Q2 2022 decreased by 28% to $1.6 billion, compared to $2.3 billion in Q2 2021[140]. - Diluted earnings per share for Q2 2022 decreased by 68% to $0.36, down from $1.12 in Q2 2021[140]. - The decrease in consolidated net revenues for the six months ended June 30, 2022, was primarily driven by a $1.2 billion decline in revenues from franchises like Call of Duty and World of Warcraft[169]. Assets and Liabilities - Total current assets as of June 30, 2022, were $12,507 million, a slight decrease from $12,556 million at December 31, 2021[11]. - Cash and cash equivalents increased to $10,483 million from $10,423 million[11]. - Accounts receivable decreased significantly to $572 million from $972 million, indicating a reduction in outstanding payments[11]. - Total liabilities decreased to $6,746 million from $7,457 million, reflecting improved financial health[11]. - Shareholders' equity increased to $18,248 million from $17,599 million, showing growth in company value[11]. - Long-term debt remained stable at $3,609 million compared to $3,608 million[11]. - Total long-lived assets as of June 30, 2022, were $406 million, unchanged from December 31, 2021[2]. - The fair value of money market funds was $10.095 billion as of June 30, 2022, compared to $10.035 billion as of December 31, 2021[45]. - The total fair value of financial assets measured at fair value on a recurring basis was $10.418 billion as of June 30, 2022[45]. Revenue Segments - Activision segment revenues for Q2 2022 were $490 million, a decrease of $299 million compared to the previous year[177]. - Blizzard segment revenues for Q2 2022 were $401 million, down $32 million from Q2 2021[177]. - King segment revenues for Q2 2022 were $684 million, an increase of $49 million compared to the previous year[177]. - The Activision segment reported net revenues of $943 million for the six months ended June 30, 2022, down from $1,680 million in the same period of 2021, a decline of approximately 43.8%[62]. - The Blizzard segment's net revenues for the six months ended June 30, 2022, were $675 million, compared to $916 million in the same period of 2021, reflecting a decrease of about 26.4%[62]. - The King segment achieved net revenues of $1,366 million for the six months ended June 30, 2022, down from $1,244 million in the same period of 2021, a decline of approximately 9.8%[62]. Cash Flow and Investments - Cash and cash equivalents at the end of the period were $10,510 million, an increase from $9,223 million at the end of June 30, 2021[15]. - Net cash provided by operating activities for the six months ended June 30, 2022, was $840 million, down from $1,232 million in the same period of 2021[15]. - The company reported total capitalized software development costs of $892 million as of June 30, 2022, up from $660 million at December 31, 2021[34]. - The amortization of capitalized software development costs for the three months ended June 30, 2022, was $60 million, down from $87 million for the same period in 2021[34]. - The company incurred share-based compensation expenses of $100 million for the three months ended June 30, 2022, compared to $43 million for the same period in 2021, indicating an increase of approximately 132.6%[64]. Mergers and Acquisitions - The company entered into a merger agreement with Microsoft for $95.00 per share in an all-cash transaction, expected to close in Microsoft's fiscal year ending June 30, 2023[132]. - The merger agreement with Microsoft involves an acquisition price of $95.00 per share, totaling approximately $68.7 billion based on outstanding shares[23]. - The company has agreed to conduct its business in the ordinary course during the merger process, ensuring it meets ongoing operational and capital needs[23]. - The merger remains subject to customary closing conditions, including regulatory approvals, and the company is conducting its business in the ordinary course during this period[132]. Legal and Regulatory Matters - The company is facing multiple legal proceedings related to employment practices, including a complaint filed by the California Department of Fair Employment and Housing[121]. - The company has received subpoenas from the SEC and the Department of Justice regarding trading activities related to the proposed merger with Microsoft[129]. - The company is cooperating with investigations regarding disclosures on employment matters and related issues, including responses to subpoenas from the SEC[125]. - An $18 million settlement fund was established as part of a consent decree with the EEOC to address employment practices and prevent workplace harassment[119]. Market and User Metrics - Monthly active users (MAUs) decreased by 11 million or 3% from Q1 2022 to Q2 2022, primarily due to lower MAUs for King and Activision[158]. - Digital online channels generated $1,474 million in Q2 2022, a decrease of 27.2% from $2,026 million in Q2 2021[196]. - The company reported a total of $4,571 million in consolidated net revenues for the year, with digital online channels contributing $4,031 million, which is a significant portion of the total[73]. Future Outlook - Upcoming titles include Call of Duty: Modern Warfare II launching on October 28, 2022, and Overwatch 2 expected to launch in early access on October 4, 2022[161].

Financial Performance - Total net revenues for Q1 2022 were $1,768 million, a decrease of 22.3% from $2,275 million in Q1 2021[11] - Product sales in Q1 2022 were $386 million, down 42.8% from $675 million in Q1 2021[11] - In-game, subscription, and other revenues were $1,382 million, a decline of 13.6% compared to $1,600 million in Q1 2021[11] - Operating income for Q1 2022 was $479 million, representing a 39.7% decrease from $795 million in Q1 2021[11] - Net income for Q1 2022 was $395 million, down 36.3% from $619 million in Q1 2021[11] - Basic earnings per share for Q1 2022 were $0.51, compared to $0.80 in Q1 2021, reflecting a 36.3% decline[11] - Comprehensive income for the three months ended March 31, 2022, was $387 million, down from $641 million in the same period of 2021[13] - Consolidated net income for the three months ended March 31, 2022, was $395 million, down from $619 million for the same period in 2021, representing a decrease of approximately 36.3%[90] - Diluted earnings per common share also fell to $0.50 for the three months ended March 31, 2022, down from $0.79 in the prior year, a decrease of 36.7%[90] - Consolidated net revenues decreased by 22% to $1.8 billion for the three months ended March 31, 2022, compared to $2.3 billion in 2021[116] Assets and Liabilities - Total current assets as of March 31, 2022, were $12,486 million, slightly down from $12,556 million at December 31, 2021[10] - Total liabilities decreased to $7,181 million as of March 31, 2022, from $7,457 million at December 31, 2021[10] - Cash and cash equivalents increased to $10,967 million as of March 31, 2022, from $10,423 million at December 31, 2021[10] - The company had $1.5 billion available under a revolving credit facility as of March 31, 2022, with no draws made to date[45] - Fair value measurements of financial assets as of March 31, 2022, totaled $10.818 billion, with $10.797 billion classified as Level 1 inputs[39] - Long-lived assets totaled $399 million as of March 31, 2022, a slight decrease from $406 million at December 31, 2021[70] Revenue Breakdown - The segment net revenues for Activision, Blizzard, and King were $453 million, $274 million, and $682 million respectively for the three months ended March 31, 2022, totaling $1.409 billion[53] - Segment net revenues from Activision, Blizzard, and King were $891 million, $483 million, and $609 million respectively, totaling $2,066 million[59] - Digital online channels generated $1,589 million in net revenues, a decrease of $417 million from $2,006 million in the prior year[156] - Console platform revenues fell to $484 million, down $315 million from $799 million, primarily due to lower sales of Call of Duty titles[159][161] - Mobile and ancillary revenues increased by $73 million to $807 million, driven by higher in-game purchases and advertising in the Candy Crush franchise[159][163] Deferred Revenues - The company reported a decrease in deferred revenues from $1,118 million at December 31, 2021, to $835 million at March 31, 2022[10] - Deferred revenues decreased by $278 million for the three months ended March 31, 2022, compared to a decrease of $204 million for the same period in 2021[15] - The aggregate of deferred revenues as of March 31, 2022, was $0.8 billion, a decrease from $1.1 billion as of December 31, 2021[43] - The company recognized a net effect from the deferral of deferred net revenues of $287 million for the three months ended March 31, 2022, compared to $209 million in the same period of 2021[55] Cash Flow and Expenses - Net cash provided by operating activities was $642 million for the three months ended March 31, 2022, compared to $844 million for the same period in 2021, reflecting a decrease of 24%[15] - Total cost of revenues for the three months ended March 31, 2022, was $479 million, a decrease of $99 million compared to $578 million for the same period in 2021, representing 27% of net revenues[164] - Product costs decreased by $49 million to $91 million for the three months ended March 31, 2022, compared to $140 million in the same period of 2021, which was 24% of associated net revenues[164] - General and administrative expenses decreased by $68 million to $214 million for the three months ended March 31, 2022, compared to $282 million in the same period of 2021, maintaining 12% of consolidated net revenues[169] Merger and Acquisitions - The company entered into a Merger Agreement with Microsoft, with Microsoft agreeing to acquire the company for $95.00 per share in an all-cash transaction[22] - The merger is expected to close in Microsoft's fiscal year ending June 30, 2023, subject to regulatory approvals[22] - The company has a stock repurchase program authorized for up to $4 billion, but no shares had been repurchased as of March 31, 2022, due to restrictions related to the merger agreement with Microsoft[92] Legal and Regulatory Matters - The company is subject to ongoing legal proceedings related to workplace issues, which may have adverse effects on its operations and financial condition[110] - The company is cooperating with investigations by the SEC and DOJ regarding trading activities related to the proposed merger with Microsoft[105] Market Performance - Monthly Active Users (MAUs) decreased by 63 million or 14% year-over-year to 372 million for the three months ended March 31, 2022[131] - Activision's MAUs dropped to 100 million, down from 150 million in the same period last year[130] - Blizzard's MAUs decreased to 22 million, while King's MAUs increased to 250 million, driven by the Candy Crush franchise[130] Future Outlook - Upcoming releases include Diablo Immortal on June 2, 2022, and a new premium title in the Call of Duty franchise in the second half of 2022[134] - The company plans to continue investing in advertising initiatives and mobile titles to drive long-term growth[134]

Merger and Acquisition - Activision Blizzard entered into a Merger Agreement with Microsoft Corporation for $95.00 per share in an all-cash transaction, expected to close in Microsoft's fiscal year ending June 30, 2023[9] - The company anticipates a termination fee of approximately $2.27 billion if the Merger Agreement is terminated under specified circumstances[10] - The company’s merger with Microsoft is expected to enhance its competitive position in the interactive entertainment industry, particularly in cloud computing and AI[45] Business Strategy and Revenue Generation - Activision Blizzard's strategy focuses on expanding audience reach, deepening consumer engagement, and increasing player investment[12] - The company generates revenue through multiple segments, including Activision Publishing, Blizzard Entertainment, and King Digital Entertainment, with key franchises like Call of Duty and Candy Crush[16][19] - The company aims to enhance player investment through digital revenue streams, including in-game purchases and advertising[15] - The company is focused on developing new revenue streams through esports and consumer products, which are still in early stages[15] - The company has shifted to a more consistently recurring and year-round revenue model, increasing player engagement and investment outside of premium full-game purchases[26] - For the years ended December 31, 2021, 2020, and 2019, the top three franchises—Call of Duty, Candy Crush, and Warcraft—accounted for 82%, 79%, and 72% of net revenues, respectively[41] Impact of COVID-19 - The COVID-19 pandemic initially increased demand for the company's products, but trends have moderated as stay-at-home orders have been lifted[21] - The company continues to monitor the impact of the COVID-19 pandemic on its business operations and may adjust strategies accordingly[23] Employee and Workforce Development - As of December 31, 2021, approximately 68% of the company's 9,800 employees were involved in game and technology development, representing a seven percentage point increase from 2020[58] - The company converted approximately 500 temporary workers to full-time employees at its Activision studios, enhancing its overall investment in development and operations[66] - The company is focused on developing diverse talent through performance management and leadership development opportunities[70] - The company aims to increase the percentage of women and non-binary employees in its workforce by 50% over the next five years, targeting over one-third representation[62] Corporate Social Responsibility and Diversity - The company has committed to diversity, with 20% of its Board of Directors being women and 20% from underrepresented communities as of December 31, 2021[60] - In 2021, the company committed to invest $250 million over the next 10 years to expand opportunities in gaming and technology for underrepresented communities[65] - The company placed 16,138 veterans in jobs through its support of the Call of Duty Endowment, contributing over $1 billion in positive economic impact for the veteran community[65] - The company reported that women earned slightly more than men for comparable work in 2020, indicating progress in equal pay practices[66] Environmental Sustainability - The company achieved a 60% reduction in packaging waste in 2021, surpassing its original goal of a 50% reduction by 2024[72] - The company is transitioning to a more digital business model to achieve sustainability goals, including net zero greenhouse gas emissions by 2050[72] Financial Management - The company’s significant customers included Apple and Google, each accounting for 17% of consolidated net revenues as of December 31, 2021[39] - The company’s investment portfolio primarily consists of money market funds and government securities with high credit quality and short average maturities[382] - The company anticipates that investment yields may remain low, negatively impacting future interest income, although this impact is not expected to be material to liquidity[383] - The company's outstanding debt is all at fixed rates, reducing exposure to market rate risk from interest rate changes[382] Intellectual Property and Marketing - The company is actively engaged in enforcing its intellectual property rights, including copyright and trademark protections, to prevent piracy and unauthorized use of its products[49] - The company’s marketing strategy includes direct communication with gamers through customized advertising and in-game messaging, leveraging digital platforms for distribution[31] Compensation and Workplace Policies - The company has established a "Workplace Responsibility Committee" to oversee the implementation of workplace policies and ensure accountability[51] - The company has implemented changes to its compensation structure to enhance employee equity ownership and align with industry practices[68] Currency Risk - A hypothetical adverse foreign currency exchange rate movement of 10% could have resulted in a theoretical decline of net income by approximately $184 million[381]

Financial Data and Key Metrics Changes - Activision Blizzard reported Q3 GAAP revenues of $2.07 billion, exceeding the outlook by $100 million [37] - Net bookings reached $1.88 billion, $30 million above the August outlook [38] - Operating cash flows were $521 million, more than double the year-ago levels [38] - The company ended the quarter with approximately $10 billion in cash and investments, and a net cash position of approximately $6.4 billion [38] Business Line Data and Key Metrics Changes - Activision segment revenue was $641 million, lower year-over-year due to the prior year's launch of Tony Hawk and declines in Call of Duty [39] - Blizzard's revenue grew 20% year-over-year to $493 million, driven by the successful launch of Diablo II: Resurrected [40] - King's revenue grew 22% year-over-year to $652 million, achieving record highs [41] Market Data and Key Metrics Changes - Monthly active users for Activision reached 119 million, with Call of Duty sustaining engagement well above pre-Warzone levels [21] - Blizzard's monthly active users were 26 million, with strong demand for Diablo II: Resurrected [25] - King saw a double-digit percentage increase in payer numbers year-over-year, with in-game net bookings for Candy Crush growing over 20% [31][32] Company Strategy and Development Direction - The company is focused on becoming a leader in workplace culture and has implemented various initiatives to improve employee satisfaction and retention [7][10] - There is a commitment to invest $250 million over the next 10 years to foster opportunities in gaming and technology for underrepresented communities [12] - The strategy includes geographic diversification and investment in creative talent to enhance game development [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of the company despite facing challenges such as negative media attention and increased competition for talent [15][47] - The company is planning for a substantial amount of content from Blizzard next year, although some titles like Overwatch 2 and Diablo IV will see delayed launches [20][19] - Management emphasized the importance of maintaining a safe working environment to foster creativity and professional growth [50] Other Important Information - The company announced a comprehensive agreement with the U.S. Equal Opportunity Commission to strengthen policies against harassment and discrimination [10] - Jen Oneal, co-leader of Blizzard, will leave the company at the end of the year, with Mike Ybarra taking over her responsibilities [34] Q&A Session Summary Question: Can you talk about the progress around rectifying workplace issues? - Management expressed confidence in the progress made and emphasized the importance of creating a welcoming and inclusive environment to attract and retain talent [53][55] Question: Can you provide more details on the release timeline for Overwatch 2 and Diablo IV? - Management indicated that both titles will benefit from additional development time to ensure quality, but specific release dates were not shared [60][61] Question: What are the fundamental drivers behind Candy Crush's in-app net bookings growth? - The company highlighted increased content frequency and successful live operations as key drivers for growth in Candy Crush and other titles [64][66] Question: How will Vanguard integrate with Warzone? - Management confirmed that Vanguard and Warzone will share technology and progression, enhancing the player experience across both games [71][72] Question: What has been the performance of Diablo II: Resurrected? - The reception has been strong, with record sales for a remaster, indicating a robust demand for the Diablo franchise [77][79]