Activision Blizzard Announces Better-Than-Expected Q3 2014 Financial Results

Destiny and World of Warcraft Drive Record Third Quarter Non-GAAP Net Revenue and EPS

Company Increases CY 2014 Full-Year Revenue and Non-GAAP EPS Outlook

Santa Monica, CA – November 4, 2014 – Activision Blizzard, Inc. (Nasdaq: ATVI) today announced better-than-expected financial results for the third quarter of 2014.

Activision Blizzard Announces Better-Than-Expected Q3 2014 Financial Results

Third Quarter

Prior

(in millions, except EPS)                         2014                   Prior Outlook*                                 2013
GAAP
Net Revenues                                             $ 753                       $ 650                                            $ 691
EPS                                                              $ (0.03)                   $ (0.07)                                       $ 0.05
Non-GAAP
Net Revenues                                            $ 1,170                      $ 975                                            $ 657
EPS                                                             $ 0.23                       $ 0.11                                            $ 0.08

*Prior outlook was provided by the company on August 5, 2014 in its earnings release

For the quarter ended September 30, 2014, Activision Blizzard’s GAAP net revenues were $753 million, as compared with $691 million for the third quarter of 2013. On a non-GAAP basis, the company’s net revenues were a record $1.17 billion, as compared with $657 million for the third quarter of 2013. For the third quarter of 2014, GAAP net revenues from digital channels represented a record 67% of the company’s total revenues. On a non-GAAP basis, net revenues from digital channels represented 43% of the company’s total revenues.

For the quarter ended September 30, 2014, Activision Blizzard’s GAAP loss per diluted share was ($0.03), as compared with GAAP earnings per diluted share of $0.05 for the third quarter of 2013. On a non-GAAP basis, the company’s earnings per diluted share were a record $0.23 for the third quarter of 2014, as compared with $0.08 for the third quarter of 2013.

Selected Business Highlights:

 For the third quarter, Activision Publishing’s Destiny was the largest new franchise launch in videogame history and ranks among the top 10 largest videogame launches of all time in the U.S.² To date, Destiny has more than 9.5 million registered users and our active players are playing the game an average of more than three hours per day.

 Blizzard Entertainment’s World of Warcraft remains the #1 subscription-based MMORPG, with more than 7.4 million subscribers as of September 30, 2014, ahead of the upcoming World of Warcraft: Warlords of Draenor release.

 During the quarter, Blizzard Entertainment’s newest franchise, Hearthstone: Heroes of Warcraft, exceeded 20 million registered users life to date.

 In North America and Europe combined, for the third quarter, Blizzard Entertainment’s Diablo III: Reaper of Souls – Ultimate Evil Edition was the #4 best-selling console title², and year to date, Diablo III: Reaper of Souls remained the #2 PC game in dollars.

 In North America and Europe combined, for the first nine months of 2014, Activision Publishing’s Skylanders SWAP Force™ was the #4 best-selling console and handheld game overall in dollars, and in North America and Europe, Skylanders toys outsold the #1 action figure line.

 On November 7 and 8, 2014, Blizzard Entertainment will host its eighth BlizzCon gaming convention at the Anaheim Convention Center. For new product announcements and information please visit www.blizzcon.com

Source: Press Release