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Activision Blizzard’s Surprising Second Quarter

Press Release by Activision

Santa Monica, California (Aug 05, 2009) -- Activision Blizzard, Inc. today announced better-than-expected financial results for the second quarter 2009.

For the quarter ended June 30, 2009, Activision Blizzard’s GAAP net revenues were $1,038 million, and its non-GAAP net revenues were $801 million. The company’s prior GAAP net revenue outlook for the quarter was $1 billion. On a non-GAAP basis, the company’s net revenue outlook was $775 million.

For the quarter ended June 30, 2009, Activision Blizzard’s GAAP earnings per diluted share was $0.15, and the company’s non-GAAP earnings per diluted share was $0.08. The company’s prior GAAP earnings per diluted share outlook was $0.10. On a non-GAAP basis, the company’s earnings per diluted share outlook was $0.06.

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, CEO of Activision Blizzard, stated, “Since our merger one year ago, we have delivered better-than-expected financial performance for four consecutive quarters. Our second quarter over performance was driven by Activision Publishing’s PROTOTYPE, Transformers(R): Revenge of the Fallen, X-Men Origins: Wolverine and the Guitar Hero(R) and Call of Duty(R) franchises, as well as Blizzard Entertainment(R)’s World of Warcraft(R). During a challenging economic climate, Activision Blizzard grew its quarterly North American and European market share 2.8 points across all platforms to 12.7% from 9.9% for the previous year and was the #1 North American third-party console and handheld publisher for the quarter and first six months of the calendar year, according to the NPD Group, Charttrack and Gfk.”

Business Highlights:

-For the second quarter, Activision Publishing was the #1 U.S. third-party console and handheld publisher and had three of the top-10 best-selling titles in the U.S., PROTOTYPE, Guitar Hero World Tour and Wolverine, according to the NPD Group.-For the first six months of the calendar year, Activision Publishing had two of the top-five best-selling titles in North America and Europe – Guitar Hero World Tour and Call of Duty: World at War – and grew its North American and European market share of the music/dance category 8 points to 53% as compared to the same period last year, according to the NPD Group, Charttrack and Gfk.- On July 31, 2009, Activision Blizzard’s Board of Directors authorized an increase of $250 million to the company’s stock repurchase program bringing the total authorization to $1.25 billion. As of June 30, 2009, Activision Blizzard had purchased $668 million, or approximately 64 million shares, of common stock at an average price of $10.41, under its stock repurchase program.

Company Outlook:

For the third quarter of calendar year 2009, Activision Publishing expects to release Guitar Hero 5 for the Xbox 360 video game and entertainment system from Microsoft, PLAYSTATION(R)3 computer entertainment system from Sony, Wii(TM) home video game system from Nintendo, and PlayStation 2 computer entertainment system from Sony; Marvel: Ultimate Alliance 2 for the Xbox 360 video game and entertainment system from Microsoft, PLAYSTATION3 computer entertainment system from Sony, Wii home video game system from Nintendo, PlayStation 2 computer entertainment system from Sony, PSP(R) (PlayStation Portable) system and the Nintendo DS(TM); and Wolfenstein for the Xbox 360 video game and entertainment system from Microsoft, PLAYSTATION3 computer entertainment system from Sony and PC.

Additionally, Activision Publishing has moved the anticipated release date for Raven’s upcoming sci-fi first-person action title, Singularity, from 2009 to the first quarter of 2010. The new launch window, which has fewer competitive titles releasing, should improve the probability of achieving stronger results and establishing Singularity as a first-person action franchise for the company.

Blizzard Entertainment has moved the anticipated release date of StarCraft II to the first half of 2010 to coincide with the relaunch of its upgraded Battle.net(R) online -gaming service.

Activision Blizzard’s outlook is subject to significant risks and uncertainties including declines in demand for its products, fluctuations in foreign exchange rates, and counterparty risks relating to customers, licensees, licensors and manufacturers. Current macroeconomic conditions increase those risks and uncertainties. The company’s outlook is also based on assumptions about sell through rates for its products, its new slate of products and its progress in integrating operations following last year’s business combination between Activision, Inc. and Vivendi Games, Inc.

About Activision Blizzard:

Headquartered in Santa Monica, California, Activision Blizzard, Inc. is a worldwide online, PC, console and handheld game publisher with leading market positions across every major category of the rapidly growing interactive entertainment software industry.

Activision Blizzard maintains operations in the U.S., Canada, the United Kingdom, France, Germany, Ireland, Italy, Sweden, Spain, Norway, Denmark, the Netherlands, Australia, Russia, South Korea, China, and the region of Taiwan.

More information about Activision Blizzard visit www.activisionblizzard.com.

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