Activision Blizzard pays $0 in taxes for 2018

On April 16 2019 06:22 Jathin wrote:
So before this thread gets out of hand, there are a few things worth mentioning. First, the article is inaccurate. Activision Blizzard (ATVI) paid $64M in taxes in 2018, $878M in 2017, and $140M in 2016. Still, the $64M they paid in the last year is an effective tax rate of 3%.

Here's how it works: you start with the federal tax rate of 21% and you make adjustments off of it based on tax deductions. For example, research and development allowed them to shave 2% off that rate. I won't make an ethical judgment on which adjustments are unfair and which are fair (there's a little bit of both), but in the end they're all legal. After all adjustments, the effective rate is what you wind up with.

The thing to keep in mind is that the effective tax rate for any given year doesn't tell you the whole story. Sometimes tax adjustments get pulled forward/back to different years. For example, Blizzard's tax rates were:

2018: 3%
2017: 76%
2016: 13%
Average: 30.67%

So it's a bit sensationalist to look at any one year and cry foul. The other thing to keep in mind is that there's a difference between cash tax rate and paper-tax rate. Sometimes the tax adjustment is simply an adjustment to their balance sheet but no money exchanges hands. When the U.S. Tax Reform Act passed, there were huge adjustments on companies' balance sheets that caused huge swings in effective tax rates. So it's a bit disingenuous for reporters to use these numbers and act like corporate America is screwing Uncle Sam (there are other ways you're getting screwed, but this isn't one of them).

Long story short, taxes are complicated and while almost certainly this thread is going to be full of people screaming, "bloody murder," there's more to it than meets the eye.

Tax info is on footnote page F-53 in their 10-K: https://www.sec.gov/Archives/edgar/data/718877/000104746919000788/a2237840z10-k.htm

On April 16 2019 05:43 myRZeth wrote:
That's plain disgusting. A company with no values.

On April 16 2019 07:09 fishjie wrote:
dont worry the government is getting their hands on tax dollars one way or another

On April 16 2019 06:22 Jathin wrote:
So before this thread gets out of hand, there are a few things worth mentioning. First, the article is inaccurate. Activision Blizzard (ATVI) paid $64M in taxes in 2018, $878M in 2017, and $140M in 2016. Still, the $64M they paid in the last year is an effective tax rate of 3%.

Here's how it works: you start with the federal tax rate of 21% and you make adjustments off of it based on tax deductions. For example, research and development allowed them to shave 2% off that rate. I won't make an ethical judgment on which adjustments are unfair and which are fair (there's a little bit of both), but in the end they're all legal. After all adjustments, the effective rate is what you wind up with.

The thing to keep in mind is that the effective tax rate for any given year doesn't tell you the whole story. Sometimes tax adjustments get pulled forward/back to different years. For example, Blizzard's tax rates were:

2018: 3%
2017: 76%
2016: 13%
Average: 30.67%

So it's a bit sensationalist to look at any one year and cry foul. The other thing to keep in mind is that there's a difference between cash tax rate and paper-tax rate. Sometimes the tax adjustment is simply an adjustment to their balance sheet but no money exchanges hands. When the U.S. Tax Reform Act passed, there were huge adjustments on companies' balance sheets that caused huge swings in effective tax rates. So it's a bit disingenuous for reporters to use these numbers and act like corporate America is screwing Uncle Sam (there are other ways you're getting screwed, but this isn't one of them).

Long story short, taxes are complicated and while almost certainly this thread is going to be full of people screaming, "bloody murder," there's more to it than meets the eye.

Tax info is on footnote page F-53 in their 10-K: https://www.sec.gov/Archives/edgar/data/718877/000104746919000788/a2237840z10-k.htm

On April 16 2019 17:21 Archeon wrote:

Bloody murder!
Thanks for providing the info though 76% is as insane as 3%, wtf America. Why does it swing so much?

Also @people saying that they are paying income taxes/taxes on dividents already: Smaller companies pay corporate taxes too. Whether corporate income tax is meaningful or not is a different discussion, but as a law it should apply to all companies more or less equally, right? And if anything global players like Atvi should pay more and not less?

On April 16 2019 23:14 GoTuNk! wrote:


Big companies have large spreadsheets and have teams of people to find out how much they are worth and how much money they made. Imagine a company like blizzard, whose main asset is owning video games licenses. How much is each game worth? They could EASILY be making money on sales for example, but be losing value as a company because those games are getting old so sales will eventually stop and they have no real prospect of high sellers soon. It is really really complicated.

Everyone should be paying less taxes. People get to keep their money and spend it how they see fit, instead of allocating those resources to politicians and their (lack) of judgement.

On April 16 2019 23:39 Yurie wrote:


I fully disagree with your opinion. People in general make worse choices on what they spend money on than politicians do. Politicians make a lot of bad choices, on average it is better though. Nobody lauds a government with 200 trillion in holdings and surpluses. While companies and people get lauded for it for some reason. It is the same thing, push the money back into standard of living.

I will also agree though that there is a tax rate at which innovation is no longer promoted enough, it is probably around 90% on individual profit and 50% corporate. Which we are nowhere near.

An example a lot of people agree with, you own a house with 5 rooms per person living there. Have 3 maids to manage to clean it and live there 3 days a month. You also own 22 cars, an airplane and three resort houses for when you have some time over. At that point the person is likely paying too little tax, the only exception would be the people making the greatest innovation in a decade or two. If them pushing the money back into new enterprises was taxed less (it usually is) then they avoid the tax by keeping people employed in a properly working system. Let government sort out trickle down if you are not actively doing it.

On April 17 2019 00:27 GoTuNk! wrote:


So you want to surrender your liberty and take away others because some people make bad decisions. And willingly give your money to politicians because they can spend it better than you.

You want individuals to be taxed at 90%? Companies at 50%? Have you ever worked? Do you know the standards of living in countries with 90% income tax rate? (hint: people make hour long lines to buy food.)
I suppose you expect to be one of the ruling class politicians.

On April 16 2019 06:22 Jathin wrote:
The other thing to keep in mind is that there's a difference between cash tax rate and paper-tax rate.

On April 17 2019 00:27 GoTuNk! wrote:


So you want to surrender your liberty and take away others because some people make bad decisions. And willingly give your money to politicians because they can spend it better than you.

You want individuals to be taxed at 90%? Companies at 50%? Have you ever worked? Do you know the standards of living in countries with 90% income tax rate? (hint: people make hour long lines to buy food.)
I suppose you expect to be one of the ruling class politicians.

On April 16 2019 23:14 GoTuNk! wrote:


Big companies have large spreadsheets and have teams of people to find out how much they are worth and how much money they made. Imagine a company like blizzard, whose main asset is owning video games licenses. How much is each game worth? They could EASILY be making money on sales for example, but be losing value as a company because those games are getting old so sales will eventually stop and they have no real prospect of high sellers soon. It is really really complicated.

Everyone should be paying less taxes. People get to keep their money and spend it how they see fit, instead of allocating those resources to politicians and their (lack) of judgement.

On April 17 2019 00:27 GoTuNk! wrote:


So you want to surrender your liberty and take away others because some people make bad decisions. And willingly give your money to politicians because they can spend it better than you.

You want individuals to be taxed at 90%? Companies at 50%? Have you ever worked? Do you know the standards of living in countries with 90% income tax rate? (hint: people make hour long lines to buy food.)
I suppose you expect to be one of the ruling class politicians.

On April 16 2019 06:17 -NegativeZero- wrote:

even then, if it's really that easy for the government to just print money and give it out, the last place it should be going is right back into the pockets of multi billion dollar corporations. the system is still broken.

On November 17 2019 06:53 G5 wrote:
Did I hear some giant company is paying zero in taxes?




If you ever... EVER hit the top marginal tax bracket and is having your top earned income taxed at 90%, you have NOTHING to worry about. I think you don't understand what a marginal tax bracket is though and think paying 90% tax on income is on ALL of your income. Not true. It's like this:

On April 16 2019 05:31 UrsusRex wrote:
According to the link below Activision Blizzard despite making 447 million in profit for 2018 did not pay any taxes on its earning. In fact the U.S. government gave 228 million dollars back to Activision under current U.S. tax laws for 2018. So if we total everything blizzard made 675 million dollars in the U.S. and has not paid any taxes.

Just thought this might be of interest to this particular forum.

https://www.yahoo.com/finance/news/companies-pay-zero-taxes-trump-tax-law-132512117.html

On November 17 2019 07:52 Disregard wrote:
Wonder where all their tax credits come from to avoid paying any taxes. R&D or the whole stock compensation switch-a-roo?

On August 11 2020 12:25 Zambrah wrote:
Yeah as soon as Money Above All Things becomes the way of things quality takes a dive because quality is expensive and CEOs and business douchers don't give two shits about making a half-decent product, just so long as it sells.

On August 11 2020 15:02 Yurie wrote:


Ferrari for example cares a lot about their quality. A lot of companies do, as long as they can charge a premium for it. In computer games that isn't the case. Blizzard isn't charging twice as much, nobody is. Thus quality has very limited value in gaming apart from moving volume since you can sell to all customers if you make a good enough software.

Massive advertising also moves volume. So you have to compare the reliability and cost of making quality products versus advertising. Since you will always fail a few products here and there, advertising is likely more reliable.

It is very similar to movies in that regard. Where advertising can be half the total cost.

On August 11 2020 22:26 Manit0u wrote:


The thing is, Blizzard had something that is very hard to achieve. A renown for making super high quality, awesome, genre-defining products. People would buy their shit blind without asking any questions if they kept it up. This can cut down your advertising/marketing costs tremendously. You simply mention new product on your site and the Internet goes wild with speculations, news etc.

This is no longer the case for them I think. Now people are wary and more disinterested, which will drive their advertising prices to increase in hopes of capturing a wider audience.

For some reason Blizzard's acquisition by Activision (can't really call it anything else) resulted in them abandoning their original playerbase and changing their ways, which resulted in IP degradation. You can contrast that with Creative Assembly, which was acquired by Sega. They still release the same stuff they did before, they do stumble now and then but the players stick with them because they trust them and know that eventually they'll get the product they want out of them. I can't say that about Blizzard. Nothing past OG WC3 and D2 really captured me. SC2 I knew I wouldn't play after trying the beta for a bit, HotS was garbage compared to DotA and HoN, Overwatch might be a good game but I wouldn't know since I'm not interested in those kinds of games, D3 was a disaster, WC3R is a disaster, WoW used to be OK, then it broke but I don't really find any incentive to play it any more (tried it out recently before Shadowlands but it's just meh, there are better alternatives now).

Blizz has lost its way and its fans. Even if they manage to go back to their old ways it'll be years before they regain players' trust...

On August 12 2020 18:21 KT_Elwood wrote:
But I guess "good enough for Marketing, for initial sales" was good enough for Activision-Blizzard.

On August 11 2020 12:25 Zambrah wrote:
Yeah as soon as Money Above All Things becomes the way of things quality takes a dive because quality is expensive and CEOs and business douchers don't give two shits about making a half-decent product, just so long as it sells.

On August 12 2020 19:31 Manit0u wrote:
With WC3R it just begs to wonder really. How come games like AoE and C&C get amazing remasters that people love but the "RTS giant" can't do it?

On August 12 2020 21:44 Broetchenholer wrote:
The drop in quality started really with Diablo 3. The absolute mess of D3 at start was baffling to me. How a company with so much knowledge in how to do it right could create a system that was not working. And i am not talking about optics or casual vs hardcore gamers, i am talking about the core of the game. Itemization was in such a ridiculous bad place at the start of D3, not just because of the AH and bound on equip, but really basic things, like having no end game uniqs or interesting set items. It felt like they did not understand the genre they had themselves created. SC2 or WoW were far from being without mistakes, but this was the first time i felt Blizzard was just another video game company.