Activision Blizzard today announced better-than-expected financial results for the third quarter of 2011

Company Raises 2011 Net Revenues and EPS Outlook

• 2011 Nine-Month Net Revenues from Digital Channels Up Over 16% From Prior Year
• Company Generated Record 2011 Nine-Month EPS
• Company Expects Record 2011 GAAP EPS of $0.76 and Non-GAAP EPS of $0.85
• Online-Enabled Product Slate Expected to Drive Profitable Growth in 2012

For the quarter ended September 30, 2011, the company delivered GAAP net revenues of $754 million, as compared with $745 million for the third quarter of 2010. On a non-GAAP basis, the company's net revenues were $627 million, as compared with $857 million for the third quarter of 2010. The company delivered record third-quarter GAAP net revenues from digital channels, accounting for more than 57% of the company's total net revenues. On a non-GAAP basis, the company also delivered record third-quarter net revenues from digital channels, accounting for more than 62% of the quarter's total net revenues.

For the quarter ended September 30, 2011, Activision Blizzard's GAAP earnings per diluted share were $0.13, as compared with $0.04 for the third quarter of 2010. On a non-GAAP basis, the company's earnings per diluted share were $0.07, as compared with $0.12 for the third quarter of 2010.

The company reports results on both a GAAP and a non-GAAP basis. Please refer to the tables at the back of this press release for a reconciliation of the company's GAAP and non-GAAP results.

Robert Kotick, Chief Executive Officer, Activision Blizzard, said, "Today, we launched Call of Duty: Modern Warfare 3 , which is perhaps the most anticipated video game in history and Call of Duty Elite, our new online service that makes playing together easier and more fun than ever before. Call of Duty Elite is a truly new form of entertainment combining Facebook-like social networking features and online television shows, offering the most accessible way to play Call of Duty games with other people."

Kotick continued, "We continue to strengthen our position as the worldwide leader in interactive entertainment and the broadening of our audiences is confirmation that games are becoming as important as film and television as a mass-market form of entertainment. Our record nine-month results were driven the by the continued strength of our online-enabled franchises. Based on our third-quarter performance, stronger than expected consumer response to our new entertainment property, Skylanders: Spyro's Adventures ,and Call of Duty: Modern Warfare 3, we are raising our full-year financial outlook and expect once again to deliver record operating margins and the highest earnings per share in our company's history."

Kotick continued, "One of Activision Blizzard's greatest skills is the creation and introduction of new intellectual properties. On October 16, we released Skylanders: Spyro's Adventures — a uniquely immersive entertainment experience that integrates the world of toys, video games and online play. The game has received terrific reviews and sales so far are exceeding our expectations. Millions of Skylander toys are already in kids' hands, and we expect the game will be a great holiday success."

Kotick added, "As we focus on 2012, we have a strong product pipeline which features a minimum of two highly-anticipated new titles from Blizzard Entertainment, including Diablo III, and a new Call of Duty game from Activision Publishing. As a result, we expect to deliver another year of profitable growth. I believe our unyielding commitment to excellence and our creative talent around the globe will continue to position Activision Blizzard as the leader in interactive entertainment."

Selected Financial Highlights

• Q3 GAAP net revenues from digital channels were a record $427 million, accounting for 57% of total net revenues
• Q3 non-GAAP net revenues from digital channels were a record $386 million, accounting for 62% of total net revenues
• Year to date, GAAP net revenues from digital channels grew 25% to $1.28 billion, accounting for 38% of total net revenues
• Year to date, non-GAAP net revenues from digital channels grew 16% to $1.25 billion, accounting for 60% of total net revenues
• Year to date, the company has generated record operating margin and EPS
• Trailing twelve-month operating cash flow exceeded $1 billion

Selected Business Highlights

• Activision Publishing's Call of Duty: Black Ops has been the #1 best-selling title in dollars in aggregate across all platforms in the U.S. and Europe for each of the first three quarters of 2011. (1)
• To date, Call of Duty: Black Ops players have logged more than 2.8 billion hours of online gameplay. (2)
• Total unique online gamers playing Call of Duty: Black Ops were more than 29% greater than the total unique online gamers who played Call of Duty: Modern Warfare 2 during the first eleven months after each game's release. (2)
• For the third quarter, Blizzard Entertainment had two top-10 PC games in the U.S. and Europe with World of Warcraft: Cataclysm and StarCraft I I : Wings of Liberty.(1)
• For the first nine months of the calendar year, StarCraft I I : Wings of Liber ty was the #1 best-selling game sku in dollars on the PC in the U.S. and Europe. (1)
• As of September 30, 2011, Activision Blizzard had purchased approximately 45 million shares of its common stock, for an aggregate price of approximately $502 million, under the $1.5 billion stock repurchase program authorized by its Board of Directors in February 2011.
• On October 21, 2011, Blizzard Entertainment announced plans for the fourth World of Warcraft expansion, World of Warcraft: Mists of Pandaria

Company Outlook

On October 4, 2011, Activision Publishing released Spider-Man: Edge of Time and on October 16, 2011, Activision Publishing launched its innovative new entertainment property, Skylanders: Spyro's Adventure. Additionally, on November 1, 2011, Activision Publishing shipped GoldenEye 007: Reloaded Double 'O' Edition and two new console titles from its popular Cabela's franchise—Cabela's Survival: Shadows of Katmai and Cabela's Adventure Camp. Today, Activision Publishing released its highly anticipated Call of Duty: Modern Warfare 3 and its innovative new digital platform, Call of Duty Elite, both of which we expect to set new standards for multiplayer gaming.

Based on third-quarter performance, stronger than expected consumer response to the new entertainment property, Skylanders: Spyro's Adventures, and an unprecedented level of pre-orders for Call of Duty: Modern Warfare 3, Activision Blizzard is raising its outlook for calendar year 2011 from the estimates it provided on August 3, 2011.

Activision Blizzard's financial outlook is subject to significant risks and uncertainties, including declines in demand for its products, competition, fluctuations in foreign exchange and tax rates, and counterparty risks relating to customers, licensees, licensors and manufacturers. The company's outlook is also based on assumptions about sell-through rates for its products, and the launch timing, success and pricing of its slate of new products. Current macroeconomic conditions increase those risks and uncertainties. As a result of these and other factors, actual results may deviate materially from the outlook presented above.