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Inside the Performance of Activision’s Business Segments

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Rising revenues from Blizzard in 2Q16

Activision Blizzard (ATVI) has three business segments: Blizzard, Activision, and King. In fiscal 2Q16, revenues from Blizzard rose by 92% YoY (year-over-year) to $738 million. The launch of Blizzard’s game franchise Overwatch drove user engagement and led to Blizzard’s largest revenue quarter ever. The operating income for this segment nearly tripled YoY in 2Q16.

Other popular games that drove revenues in this segment included World of Warcraft and Hearthstone, which are quickly gaining popularity in Asian markets such as China (FXI) and Korea. While Overwatch was the fastest-selling PC game ever in China, Warcraft the movie also had the biggest-ever Hollywood launch in China.

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Rising revenues from Activision and King

In 2Q16, revenues from Activision rose by 6.1% YoY (year-over-year) to $332 million. Activision also delivered record MAU’s (monthly active users) and operating income in 2Q16 and 1H16, driven by the popularity of the Call of Duty franchise and digital in-game content.

In 2Q16, revenues from King rose by 134% QoQ (quarter-over-quarter) to $484 million. The Candy Crush franchise continues to drive user engagement for King Digital (KING). Operating income in 2Q16 also rose QoQ in this business segment.

Improvement in operating margins

The rise in digital revenues for Activision (ATVI) was one of the major highlights in 2Q16. Driven by digital performance, the operating margin for Activision rose to 37% in 2Q16 from 28% in 1Q16 and 23% in 2Q15.

Continue to the next part for more on Activision’s MAU growth.

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