Operating segments and geographic region

3 Months Ended

Mar. 31, 2012

Operating segments and geographic region

Operating segments and geographic region

7.       Operating segments and geographic region

Our operating segments are consistent with our internal organizational structure, the manner in which our operations are reviewed and managed by our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), the manner in which operating performance is assessed and resources are allocated, and the availability of separate financial information. We do not aggregate operating segments.

The CODM reviews segment performance exclusive of the impact of the change in deferred net revenues and related cost of sales with respect to certain of our online-enabled games, stock-based compensation expense, restructuring expense, and amortization of intangible assets. The CODM does not review any information regarding total assets on an operating segment basis and, accordingly, no disclosure is made with respect thereto. Information on the operating segments and reconciliations of total segment net revenues and total segment income from operations to consolidated net revenues and income before income tax expense from external customers for the three months ended March 31, 2012 and 2011 are presented below (amounts in millions):

			Three months ended March 31,
			2012		2011		2012		2011
							Income from operations
			Net revenues				before income tax expense
	Activision		$	271	$	323	$	---	$	48
	Blizzard			251		357		89		170
	Distribution			65		75		1		---
		Operating segments total		587		755		90		218
Reconciliation to consolidated net revenues /
consolidated income before income tax
expense:
	Net effect from deferral of net revenues and
		related cost of sales		585		694		447		506
	Stock-based compensation expense			---		---		(21)		(23)
	Restructuring			---		---		---		(19)
	Amortization of intangible assets			---		---		(3)		(8)
Consolidated net revenues / operating income			$	1,172	$	1,449		513		674
	Investment and other income (expense), net							1		2
Consolidated income before income tax expense							$	514	$	676

Geographic information for the three months ended March 31, 2012 and 2011 is based on the location of the selling entity. Net revenues from external customers by geographic region were as follows (amounts in millions):

		Three months ended March 31,
		2012		2011
Net revenues by geographic region:
	North America	$	601	$	748
	Europe		485		594
	Asia Pacific		86		107
Total consolidated net revenues		$	1,172	$	1,449

Net revenues by platform were as follows (amounts in millions):

		Three months ended March 31,
		2012		2011
Net revenues by platform:
	Online subscriptions*	$	256	$	395
	Console		688		824
	Hand-held		26		31
	PC and Other		137		124
Total platform net revenues			1,107		1,374
Distribution			65		75
Total consolidated net revenues		$	1,172	$	1,449

*Revenue from online subscriptions consists of revenue from all World of Warcraft products, including subscriptions, boxed products, expansion packs, licensing royalties, and value-added services, and revenues from Call of Duty® Elite memberships.

Long-lived assets by geographic region at March 31, 2012 and December 31, 2011 were as follows (amounts in millions):

		At March 31, 2012		At December 31, 2011
Long-lived assets* by geographic region:
	North America	$	99	$	105
	Europe		44		46
	Asia Pacific		11		12
Total long-lived assets by geographic region		$	154	$	163

*We classify long-lived assets as long term tangible fixed assets by the location of the controlling statutory entity, which only includes property, plant and equipment assets, as all other long term assets are not allocated by location.

We did not have any single external customer that accounted for 10% or more ofconsolidated net revenues for the three months ended March 31, 2012 and 2011.