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Inside Activision Blizzard’s Important Metrics in 4Q17

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Activision

Activision Blizzard (ATVI) has three primary business segments: Activision, Blizzard, and King. As you can see in the chart below, the Activision segment reported revenues of over $1.3 billion in 4Q17, which accounted for over 54% of the company’s total revenues that quarter (ended December 2017).

ATVI’s operating income came in at $634 million, indicating an operating margin of 47%, and its net revenues in 2017 reached ~$2.6 billion, with an operating income of over $1 billion. These revenues were driven by games like Call of Duty: WWII and Crash Bandicoot.

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Blizzard

ATVI’s Blizzard segment reported revenues of $599 million in 4Q17, which accounted for over 24% of the company’s total revenues during that quarter (ended December 2017). The segment’s operating income reached $160 million, indicating an operating margin of 27%, and its net revenues in 2017 reached $2.13 billion, with an operating income of over $715 million.

The Blizzard segment posted record revenues in 2017, despite no major gaming releases during the year. These revenues were driven by Overwatch, Hearthstone, and World of Warcraft.

King

ATVI’s King segment reported revenues of $516 million in 4Q17, which accounted for over 21% of the company’s total revenues for that quarter (ended December 2017). The segment’s operating income came in at $162 million, indicating an operating margin of 31%, and its net revenues in 2017 reached $2 billion, with an operating income of over $700 million.

This segment’s revenue rose 7% YoY (year-over-year) in 2017, while its operating income rose 12% for the year. The Candy Crush franchise continued to drive revenues with its focus on improving player engagement and player investment.

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