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Activision Blizzard Has $4.4 Billion in Long-Term Debt Outstanding

PSLS: "Activision Blizzard just released their 2017 investor report, and it paints an interesting picture of the publishing behemoth. For example, the company currently has $4.4 billion in long-term debt outstanding. While that certainly is a lot of money (even to a business as large as Activision), it isn’t uncommon for successful businesses to have long-term debt outstanding. It’s also worth noting that the amount is down from 2016, when the company had $5.9 billion in debt. Still, Activision says that their “debt burden could have important consequences” in the future."

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Araragifeels 231d ago

So the Loot boxes didn't make money to cover this up.

3-4-5231d ago

100% no way this is on Blizzard's end. They only make so many games, and they have WoW going for years racking in millions.....maybe even billions for them.

This must be on Activision's side.

Gaming101230d ago

Right... because Call of Duty totally hasn't been a cash cow for Activision for the last 10 years. They're paying themselves massive bonuses, and hiding profits just like any other business.

GottaBjimmyb230d ago (Edited 230d ago )

This title is extremely misleading to begin with, most companies have debt that are this large and have similar structure. They do this because they expect growth. They will invest large sums on developement, research and investments, then get returns when the products release.

Activision for example will recoup easily with the followijg:
1. When they release the games being developed that are causing the debt (heck COD alone for the next 2 years probably more than covers this debt)
2. When they see revenue growth
3. When/if they sell unneeded assets

The reality is, you could have a millionaire who makes $800k/year, who has a 3 million dollar house, but only 2 million in the bank, and say he has long-term debt, but based on his income and what he has saved technically isn't really in danger due to the debt, but rather managing his debt and assets in a way beneficial to him.

Khalina230d ago (Edited 230d ago )

They do. Pretty much every large business consistently has gigantic debt, but also there is about just as much (usually more) money that is owed to them plus their current non cash equities. All big companies operate on money owed. Very small percent of total equity going around, is actual physical cash they have available, as they constantly reinvest the money hence the constant "debt".

This article is clickbait because you could make a similar headline for pretty much any company, as it is simply taken out of context, and people think it is something unusual when it's very normal.

uth11231d ago

but but i thought these companies were swimming in profits and just. greedy when they were trying to sell MTs, loot boxes, DLC, etc?

Cmv38231d ago

It's not on the consumer because the developers and publishers are in debt for making some sort of bad decisions financially. It can't be, micro transactions exist to punish consumers and sell us the rest of the game so they can get out of debt. The blizzard portion is probably doing well, it's the other divisions that's probably to blame. But I'm purely speculating.

togasugeru231d ago

G00gle pay 85$ per hour my last pay check was $8500 operating a hundred hours per week on-line. My younger brother friend has been averaging 12k for months currently and he's employed concerning twenty two hours per week. I can’t believe however simple it had been once i attempted it out. this is often what I do.

http://www.fl-y.com/3r8h

yomfweeee231d ago

Just because they have debt, doesn't mean they are in a bad position financially and aren't making boat loads of money.

231d ago
LandoCalrissiano231d ago

Exactly. Our economy is growing while trillions in debt. Everyday people have college tuitions to pay yet are doing fine. If the debt is being balanced, (and shrinking like in this case), that's fine.

3-4-5231d ago

younger people don't understand debt and are gullible and easily tricked by these headlines though.

jmc8888231d ago (Edited 231d ago )

But how did they get to this debt. Was it legitimate reasons or illegitimate reasons?

Stock buybacks don't do anything more then temporarily raise the price of stocks. Even for years. But eventually, the cracked foundation collapses... stocks sink massively, and the debt remains.

This in turn can threaten many companies. Also it's not just stock buy backs. M&A's can do this as well.

Especially when they buy a company who engaged in stock buy backs, assume its debt, funding the acquisition with debt, at a stock price above its current levels which were nosebleed bubble to begin with.

What do you think has been happening the last 10 years? Federal reserve and other central banks with bailouts, QE, backstopping, suspending mark-to-market (suspension of accounting rules which is basically legal accounting fraud) and 0 percent interest rates encourage such unproductive uses of capital.

Boy do we have a day of reckoning ahead.

This doesn't mean Activison/Blizzard is screwed, but when the day of reckoning happens, many big national/worldwide corporations will implode. They are doing better then most (as of today), but this could change quickly. Nevertheless, its disappointing to see them carry this much debt, when it's not necessary.

All it does is give someone else the power to screw them over later.

yomfweeee230d ago

JMC it is legit reasons. They bought back some stock or something and they also purchased King (Candy Crush).

+ Show (2) more repliesLast reply 230d ago
InTheZoneAC231d ago

Are you simple? They profited more than their total debt from fy2017 alone

quent231d ago

Wow you're easily conned, why do you think they made this info public in the 1st place ?

veicht231d ago

@uth11 They are. https://www.polygon.com/201...

They aren't in debt because making games isn't profitable. If that were the case, developers/publishers that don't take advantage of those practices while also not having huge block-buster ip under their control would surely be impossible to be successful which isn't the case.

+ Show (2) more repliesLast reply 230d ago
cmelain231d ago

How can they loose money I do not understand !!??

231d ago Replies(7)
OrangePowerz231d ago

They reduced their debt by 1.5 Billion. So clearly they are making plenty of money. Otherwise the dept would go down slower or increase.

jmc8888231d ago

That's smart. Get out of debt while you can.

TheOttomatic91231d ago

I don't know much about company finances but I doubt this will effect Activision in any way. The only way to get them stop the lootbox BS is to stop buying and supporting their projects

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