Activision, Inc. — 2004 Annual Report Ronald Doornink Brian G. Kelly Robert A. Kotick Two thousand and four marks a milestone in Activision’s history—25 years of delivering quality interactive entertainment experiences to consumers worldwide. Few companies have created a business model that laid the foundation for a multi-billion dollar industry. Activision can rightfully make this claim and we are proud to be at the helm of such a tradition-rich enterprise. Throughout Activision’s evolution, our goal has been to create a company that is well integrated and capable of delivering long-term value to our shareholders. We have worked diligently to build a company that has the flexibility to seize opportunities, yet maintains the foresight to anticipate challenges and plan for its future. In fiscal 2004, our vision translated into the most successful year in our history. We delivered our 12th consecutive year of revenue growth, posted record earnings and increased our operating margin. Our results represent a five-year compound annual revenue growth rate of 17% and compound annual earnings growth rate of 39%. We further enhanced our balance sheet ending the year with $588 million in cash and short-term investments, low days sales outstanding, a solid inventory position and $833 million in shareholder equity. We successfully created two wholly owned game properties— Call of Duty GLYPH<H23043> and  True Crime GLYPH<H23043> : Streets of L.A. GLYPH<H23043> —and introduced a new direction for the Tony Hawk brand, resulting in three franchises from which we can develop a variety of games for multiple platforms. According to NPD, Chart Track, GfK and Media Control, each of these games has sold more than one million units with life to date revenues from the Tony Hawk franchise exceeding $800 million worldwide. During the fiscal year, we substantially strengthened our business and remained focused on three key initiatives—developing and expanding our intellectual property portfolio, building our development capabilities and strengthening our market presence. In addition to creating three original game properties, we expanded our relationships with DreamWorks, LucasArts Entertainment Company and Columbia Pictures/Marvel Enterprises, Inc. These activities will not only increase our range of product offerings but should also enhance the consistency and predictability of our future financial results. Under our agreement with DreamWorks, we acquired the rights to publish games based on the blockbuster film “Shrek 2” as well as DreamWorks’ next three animated feature films, “Shark Tale,” “Madagascar” and “Over the Hedge.” We expanded our role with LucasArts Entertainment Company to publish and distribute LucasArts’ video game console and PC products in more than 60 countries in Europe and Africa. Additionally, we recently expanded our agreement with Columbia Pictures/Marvel Enterprises, Inc. to publish games based on the upcoming feature film “Spider-Man 3,” which is set for release in May 2007. page 1 To our shareholders: 