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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported):
November 17, 2022
Activision Blizzard, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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001-15839
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95-4803544
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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2701 Olympic Boulevard, Building B
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Santa Monica,
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CA |
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90404
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(Address of Principal Executive Offices) |
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(Zip Code) |
(Registrant's telephone number, including area code):
(310) 255-2000
(Former Name or Former Address, if Changed Since Last
Report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see
General Instruction A.2. below): ☐
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☐
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Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the
Act:
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Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered |
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Common Stock, par value $.000001 per share |
ATVI |
The Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
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Item 8.01 Other Events.
Activision Blizzard, Inc (“Activision Blizzard”) currently has
licensing agreements with NetEase, Inc. covering the publication of
several Blizzard Entertainment, Inc. ("Blizzard") titles in China.
These agreements, which contributed approximately 3% of Activision
Blizzard’s consolidated net revenues in 2021, are set to expire in
January 2023. Activision Blizzard has engaged in good faith
discussions to extend our existing agreements with NetEase, Inc. in
China, but did not reach a deal that is consistent with our
operating principles and commitments to our players and employees.
We now expect the agreements to expire, which will affect our
business in China.
Activision Blizzard is committed to finding alternative ways to
serve the community in China affected by the expiry of these
agreements, and continues to see substantial long-term growth
opportunities for its business in the country. Co-development and
publishing of Diablo Immortal®
is covered by a separate agreement. Call of Duty®:
Mobile is governed by agreements with other third parties that are
unaffected.
Activision Blizzard continues to expect to expand its global
audience, deepen community engagement, and deliver renewed growth
in player investment in the fourth quarter and beyond. Activision
Blizzard’s business has continued to perform well since the third
quarter earnings release, and Activision Blizzard continues to
expect fourth quarter GAAP revenue to be 5% lower year-over-year or
better, with net bookings and total segment operating income
growing at least 20% year-over-year.
Cautionary Note Regarding Forward-looking Statements:
The statements contained herein that are not historical facts are
forward-looking statements including, but not limited to statements
about: (1) projections of revenues, expenses, income or loss,
earnings or loss per share, cash flow, or other financial items;
(2) statements of our plans and objectives, including those related
to releases of products or services; (3) statements of future
financial or operating performance, including the impact of tax
items thereon; and (4) statements of assumptions underlying such
statements. Activision Blizzard, Inc. generally uses words such as
“outlook,” “forecast,” “will,” “could,” “should,” “would,” “to be,”
“plan,” “aims,” “believes,” “may,” “might,” “expects,” “intends,”
“seeks,” “anticipates,” “estimate,” “future,” “positioned,”
“potential,” “project,” “remain,” “scheduled,” “set to,” “subject
to,” “upcoming,” and the negative version of these words and other
similar words and expressions to help identify forward-looking
statements. Forward-looking statements are subject to business and
economic risks, reflect management’s current expectations,
estimates, and projections about our business, and are inherently
uncertain and difficult to predict.
We caution that a number of important factors, many of which are
beyond our control, could cause our actual future results and other
future circumstances to differ materially from those expressed in
any forward-looking statements. Such factors include, but are not
limited to: the expected effect of the expiration of the agreement
with NetEase, Inc.; the risk that the proposed transaction with
Microsoft may not be completed in a timely manner or at all, which
may adversely affect our business and the price of our common
stock; the failure to satisfy the conditions to the consummation of
the proposed transaction with Microsoft, including the receipt of
certain governmental and regulatory approvals; the occurrence of
any event, change, or other circumstance that could give rise to
the termination of the Agreement and Plan of Merger, dated as of
January 18, 2022, by and among Activision Blizzard, Microsoft
Corporation (“Microsoft”), and Anchorage Merger Sub Inc., a wholly
owned subsidiary of Microsoft (the “Merger Agreement”); the effect
of the announcement or pendency of the proposed transaction with
Microsoft on our business relationships, operating results, and
business generally; risks that the proposed transaction with
Microsoft disrupts our current plans and operations and potential
difficulties in employee retention as a result of the proposed
transaction with Microsoft; risks related to diverting management’s
attention from ongoing business operations; the outcome of any
legal proceedings that have been or may be instituted against us
related to the Merger Agreement or the transactions contemplated
thereby; restrictions during the pendency of the proposed
transaction with Microsoft that may impact our ability to pursue
certain business opportunities or strategic transactions; the
potential for receipt of alternative acquisition proposals from
potential acquirors; the global impact of the ongoing COVID-19
pandemic and other macroeconomic factors (including, without
limitation, the potential for significant short- and long-term
global unemployment and economic weakness and a resulting impact on
global discretionary spending; potential strain on the retailers,
distributors, and manufacturers who sell our physical products to
customers and the platform providers on whose networks and consoles
certain of our games are available; effects on our ability to
release our content in a timely manner and with effective quality
control; effects on our ability to prevent cyber-security incidents
while our workforce is dispersed; effects on the operations of our
professional esports leagues; the impact of rising interest rates
as a result of large-scale intervention by the Federal Reserve and
other central banks around the world and other economic factors;
increased demand for our games due to stay-at-home orders and
curtailment of other forms of entertainment, which may not be
sustained and may fluctuate as stay-at-home orders are reduced,
lifted, and/or reinstated; macroeconomic impacts arising from the
long duration of the COVID-19 pandemic, including labor shortages
and supply chain disruptions; and volatility in
foreign
exchange rates); our ability to consistently deliver popular,
high-quality titles in a timely manner, which has been made more
difficult as a result of the COVID-19 pandemic; our ability to
satisfy the expectations of consumers with respect to our brands,
games, services, and/or business practices; negative impacts on our
business from concerns regarding our workplace; our ability to
attract, retain, and motivate skilled personnel; competition;
concentration of revenue among a small number of franchises;
negative impacts from unionization or attempts to unionize by our
workforce; rapid changes in technology and industry standards;
increasing importance of revenues derived from digital distribution
channels; our ability to manage growth in the scope and complexity
of our business; substantial influence of third-party platform
providers over our products and costs; success and availability of
video game consoles manufactured by third parties, including our
ability to predict the consoles that will be most successful in the
marketplace and develop commercially-successful products for those
consoles; risks associated with the free-to-play business model,
including our dependence on a relatively small number of consumers
for a significant portion of revenues and profits from any given
game; risks and uncertainties of conducting business outside the
United States (the “U.S.”), including the need for regulatory
approval to operate, impacts on our business arising from the
current conflict between Russia and Ukraine, the relatively weaker
protection for our intellectual property rights, and the impact of
cultural differences on consumer preferences; risks associated with
the retail sales business model; difficulties in integrating
acquired businesses or otherwise realizing the anticipated benefits
of strategic transactions; the seasonality in the sale of our
products; fluctuation in our recurring business; risks relating to
behavior of our distributors, retailers, development, and licensing
partners, or other affiliated third parties that may harm our
brands or business operations; our reliance on tools and
technologies owned by third parties; risks associated with our use
of open source software; risks associated with undisclosed content
or features that may result in consumers’ refusal to buy or
retailers’ refusal to sell our products; risks associated with
objectionable consumer- or other third-party-created content;
outages, disruptions or degradations in our services, products,
and/or technological infrastructure; data breaches, fraudulent
activity, and other cybersecurity risks; significant disruption
during our live events; risks related to the impacts of
catastrophic events; climate change; provisions in our corporate
documents that may make it more difficult for any person to acquire
control of our company; ongoing legal proceedings related to
workplace concerns and otherwise, including the impact of the
complaint filed in 2021 by the California Civil Rights Department
(formerly known as the Department of Fair Employment and Housing)
alleging violations of the California Fair Employment and Housing
Act and the California Equal Pay Act and separate investigations
and complaints by other parties and regulators related to certain
employment practices and related disclosures; successful
implementation of the requirements of the court-approved consent
decree with the Equal Employment Opportunity Commission;
intellectual property claims; increasing regulation in key
territories; regulation relating to the Internet, including
potential harm from laws impacting “net neutrality;” regulation
concerning data privacy, including China’s Personal Information
Protection Law; scrutiny regarding the appropriateness of our
games’ content, including ratings assigned by third parties;
changes in tax rates and/or tax laws or exposure to additional tax
liabilities; fluctuations in currency exchange rates; impacts of
changes in financial accounting standards; insolvency or business
failure of any of our business partners, which has been magnified
as a result of the COVID-19 pandemic; risks associated with our
reliance on consumer discretionary spending; risks associated with
increased inflation on our costs and the impacts on consumer
discretionary spending; and the other factors included in Part I,
Item 1A “Risk Factors” of our Annual Report on Form 10-K for the
year ended December 31, 2021, filed with the U.S. Securities and
Exchange Commission.
The forward-looking statements contained herein are based on
information available to Activision Blizzard, Inc. as of the date
of this filing, and we assume no obligation to update any such
forward-looking statements. Actual events or results may differ
from those expressed in forward-looking statements. As such, you
should not rely on forward-looking statements as predictions of
future events. We have based the forward-looking statements
contained herein primarily on our current expectations and
projections about future events and trends that we believe may
affect our business, financial condition, operating results,
prospects, strategy, and financial needs. These statements are not
guarantees of our future performance and are subject to risks,
uncertainties, and other factors, some of which are beyond our
control and may cause actual results to differ materially from
current expectations.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly
authorized.
Date: November 17, 2022
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ACTIVISION BLIZZARD, INC. |
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By:
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/s/ Armin Zerza |
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Name: |
Armin Zerza |
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Title: |
Chief Financial Officer |
Activision Blizzard (NASDAQ:ATVI)
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