Activision-Blizzard September results reveals box sales paradigm

Reader Comments (Page 1 of 1)

11-06-2008 @ 5:29PM

Kyristrae said...

It's sort of like an ENRON trick in accounting. You are supposed to report sales as they are earned in your accounting books. This is a new way of accounting which is totally in their favor. It gives way to a new type of protection that I'm coining:

BOT INSURANCE

Say a current quarter isn't going so well for them. All they have to do is round up all the accounts of known botting (they don't ban people immediately - they wait and ban a bunch together) and ban them before their financial quarter report - Thus terminating their accounts and realizing 100% depreciation which then becomes reportable revenue for Activision/Blizzard. Thus saving their asses for a quarterly report.

...totally unethical.

11-06-2008 @ 5:37PM

James said...

That’s not how that works at all. Your first statement that they report sales as they are earned is correct that exactly what they are doing. Wow is a subscription service much like a magazine and follows the rules for recognizing that type of revenue. It wouldn’t be depreciation they would be recognizing by the way. Lastly can you honestly say that Blizz is going to have a problem with a quarterly report? Please don't talk about accounting procedure when you don’t know what you are talking about. There is nothing sinister about what they are doing here.

11-06-2008 @ 5:43PM

Magdalen said...

Really?! Have you read what type of accounting ENRON did? ENRON recognized all of the revenue from multiyear contracts in the first year, claiming it was mark to market.

By terminating bots, Blizzard only shortens the estimated average life of a subscription, which affects the revenue recognized by box sales. Even if Blizard was in this practice, there has to be a HUGE number of bots for it to make a significant difference in the revenue recognized.

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