Activision Blizzard Inc. (NASDAQ:ATVI)

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Area Asset Turnover: Americas

Activision Blizzard Inc.; Americas; area asset turnover calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Consolidated net revenues	4,208)	4,931)	4,434)	3,341)	3,880)
Long-lived assets	279)	264)	270)	322)	203)
Area Activity Ratio
Area asset turnover¹	15.08	18.68	16.42	10.38	19.11

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ 2022 Calculation
Area asset turnover = Consolidated net revenues ÷ Long-lived assets
= 4,208 ÷ 279 = 15.08

The asset turnover for the Americas region exhibits a volatile trajectory from 2018 through 2022, characterized by a significant contraction in 2019, a strong recovery through 2021, and a subsequent decline in 2022.

Revenue Performance: Consolidated net revenues experienced a non-linear trend, decreasing from US$ 3,880 million in 2018 to US$ 3,341 million in 2019. A period of growth followed, with revenues peaking at US$ 4,931 million in 2021, before declining to US$ 4,208 million by the end of 2022.
Long-Lived Asset Base: Long-lived assets saw a sharp increase between 2018 and 2019, rising from US$ 203 million to US$ 322 million. For the remainder of the observed period, the asset base remained relatively stable, fluctuating within a narrow range between US$ 264 million and US$ 279 million.
Area Asset Turnover Analysis: The turnover ratio reached its lowest point in 2019 at 10.38, a result of the simultaneous occurrence of declining revenues and an expanding asset base. Efficiency improved significantly over the following two years, with the ratio climbing to 18.68 in 2021, indicating a more effective utilization of assets to generate revenue. However, the ratio retreated to 15.08 in 2022, primarily driven by the contraction in consolidated net revenues despite a stable asset base.

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Area Asset Turnover: Europe, Middle East, and Africa (EMEA)

Activision Blizzard Inc.; Europe, Middle East, and Africa (EMEA); area asset turnover calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Consolidated net revenues	2,236)	2,797)	2,680)	2,239)	2,618)
Long-lived assets	103)	122)	166)	142)	62)
Area Activity Ratio
Area asset turnover¹	21.71	22.93	16.14	15.77	42.23

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ 2022 Calculation
Area asset turnover = Consolidated net revenues ÷ Long-lived assets
= 2,236 ÷ 103 = 21.71

The financial performance of the Europe, Middle East, and Africa (EMEA) region between 2018 and 2022 is characterized by significant volatility in both revenue generation and asset utilization. A sharp decline in asset efficiency was observed early in the period, followed by a moderate recovery and subsequent stabilization.

Revenue Trends: Consolidated net revenues in the EMEA region exhibited a fluctuating pattern. After a decrease from US$ 2,618 million in 2018 to US$ 2,239 million in 2019, revenues grew steadily over the next two years, reaching a peak of US$ 2,797 million in 2021. However, a notable contraction occurred in 2022, with revenues falling to US$ 2,236 million, representing a return to levels seen in 2019.
Long-lived Asset Dynamics: The asset base in the region underwent rapid expansion followed by a gradual contraction. Long-lived assets increased sharply from US$ 62 million in 2018 to a peak of US$ 166 million in 2020. From 2021 onward, a downward trend emerged, with assets decreasing to US$ 103 million by the end of 2022, suggesting a period of asset divestment or depreciation.
Area Asset Turnover Analysis: The area asset turnover ratio experienced a severe contraction from 42.23 in 2018 to 15.77 in 2019. This decline was primarily driven by the doubling of long-lived assets during a period of declining revenues. The ratio remained relatively stable in 2020 at 16.14 before improving to 22.93 in 2021, fueled by both revenue growth and a reduction in the asset base. By 2022, the ratio slightly decreased to 21.71, reflecting the impact of the revenue downturn despite the continued reduction in long-lived assets.

Overall, the data indicates that the region's asset efficiency was highly sensitive to the rapid scaling of long-lived assets between 2018 and 2020. The subsequent recovery in the turnover ratio suggests an optimization of the asset base to better align with the region's revenue-generating capacity.

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Area Asset Turnover: Asia Pacific

Activision Blizzard Inc.; Asia Pacific; area asset turnover calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Consolidated net revenues	1,084)	1,075)	972)	909)	1,002)
Long-lived assets	21)	20)	17)	21)	17)
Area Activity Ratio
Area asset turnover¹	51.62	53.75	57.18	43.29	58.94

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ 2022 Calculation
Area asset turnover = Consolidated net revenues ÷ Long-lived assets
= 1,084 ÷ 21 = 51.62

The Asia Pacific region exhibits a high-efficiency operational model characterized by minimal investment in long-lived assets relative to substantial revenue generation. The region maintains a low-capital-intensity strategy, allowing for high asset turnover rates across the analyzed five-year period.

Revenue Trends: Consolidated net revenues in the Asia Pacific region experienced a contraction between 2018 and 2019, falling from US$ 1,002 million to US$ 909 million. This decline was followed by a period of steady growth, with revenues increasing to US$ 972 million in 2020, US$ 1,075 million in 2021, and reaching US$ 1,084 million by December 31, 2022.
Long-lived Asset Stability: Investment in long-lived assets has remained consistently low and stable, fluctuating within a narrow range between US$ 17 million and US$ 21 million. This suggests that the revenue growth in the region is not dependent on significant increases in physical infrastructure or long-term capital expenditures.
Area Asset Turnover Analysis: The asset turnover ratio remains exceptionally high, reflecting extreme efficiency in utilizing regional assets to drive sales. The ratio peaked at 58.94 in 2018, dropped to a period low of 43.29 in 2019, and rebounded sharply to 57.18 in 2020. Since 2020, a moderate downward trend has emerged, with the ratio decreasing to 53.75 in 2021 and 51.62 in 2022, despite the simultaneous increase in net revenues.

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Activision Blizzard Inc., consolidated net revenues by geographic area

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Americas	4,208)	4,931)	4,434)	3,341)	3,880)
Europe, Middle East, and Africa (EMEA)	2,236)	2,797)	2,680)	2,239)	2,618)
Asia Pacific	1,084)	1,075)	972)	909)	1,002)
Total	7,528)	8,803)	8,086)	6,489)	7,500)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Consolidated net revenues exhibited significant volatility over the five-year period from 2018 to 2022. A general contraction was observed in 2019, followed by a robust recovery that peaked in 2021. By the end of 2022, total revenues receded to $7.528 billion, effectively returning to the baseline levels recorded in 2018.

Americas Market Performance: The Americas region remains the primary driver of total net revenues. Revenue in this segment fluctuated from $3.880 billion in 2018 to a peak of $4.931 billion in 2021, before declining to $4.208 billion in 2022. The trajectory of this region closely mirrors the overall corporate revenue trend.
EMEA Market Performance: Revenue from the Europe, Middle East, and Africa region demonstrated a pattern of volatility. Following a decline in 2019 to $2.239 billion, revenues grew to a high of $2.797 billion in 2021. A significant contraction occurred in 2022, with revenues falling to $2.236 billion, marking the lowest performance level within the analyzed period.
Asia Pacific Market Performance: The Asia Pacific region displayed the highest level of stability and a distinct growth trajectory. Despite a decrease to $909 million in 2019, this segment maintained a consistent upward trend from 2020 through 2022, reaching $1.084 billion. This represents the only geographic segment to achieve positive year-over-year growth in 2022.
Geographic Revenue Distribution: The distribution of revenues reveals a heavy concentration in the Americas and EMEA markets. While these two regions experienced synchronized growth between 2019 and 2021, they also underwent a simultaneous decline in 2022. Conversely, the steady increase in Asia Pacific revenues suggests a gradual improvement in geographic diversification.

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Activision Blizzard Inc., long-lived assets by geographic area

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Americas	279)	264)	270)	322)	203)
Europe, Middle East, and Africa (EMEA)	103)	122)	166)	142)	62)
Asia Pacific	21)	20)	17)	21)	17)
Total	403)	406)	453)	485)	282)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The total value of long-lived assets experienced a significant surge between 2018 and 2019, peaking at 485 million US dollars, before entering a period of gradual contraction to 403 million US dollars by the end of 2022.

Americas Region: The Americas represent the primary concentration of long-lived assets throughout the analyzed period. A substantial increase was recorded in 2019, with assets rising from 203 million to 322 million US dollars. Following this peak, the region saw a moderate decline and subsequent stabilization, ending 2022 with 279 million US dollars.
Europe, Middle East, and Africa (EMEA): The EMEA region demonstrated the most pronounced growth and subsequent decline. Assets grew rapidly from 62 million US dollars in 2018 to a peak of 166 million US dollars in 2020. This trend reversed after 2020, with a steady decrease to 103 million US dollars by the end of 2022.
Asia Pacific: Investment in long-lived assets within the Asia Pacific region remained minimal and stagnant. Values fluctuated slightly between 17 million and 21 million US dollars over the five-year period, indicating a lack of significant capital expenditure or asset expansion in this geography.
Overall Geographic Distribution: A heavy geographic concentration is observed in the Americas, which consistently held the largest share of total long-lived assets. While the EMEA region increased its proportional share of assets up until 2020, the overall trajectory since 2019 indicates a general reduction in the global long-lived asset base.

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