ATVI - Earnings call transcript Q3 2018 | Activision Blizzard, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to the Activision Blizzard Q3 2018 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Christopher Hickey, Senior Vice President of Investor Relations. Please go ahead, sir.

Christopher Hickey

Thank you. you XXXX us conference thank Blizzard's for and quarter third call. afternoon for today joining Activision Good With us are: and Spencer Bobby Kotick, CEO; CFO. Coddy Neumann, Johnson, COO; And for Q&A, J. will Riccardo President CEO Blizzard; Brack, us. and Allen of of King, also join Zacconi, during I will call, not facts. be would are we that this everyone statements like remind historical to that making the of the date forward-looking this are presentation as The based on this company presentation. statements in information available to of to to them be they be believe incorrect. prove we while And ultimately true, may cause could future factors A company's materially actual those other of number any and results the circumstances from future differ to forward-looking expressed in statements. These on our SEC Form the slides filings, Report those factors and showing. Annual the on XXXX include discussed XX-K, that risk including in are our any reflect XXXX. statements revisions to undertakes company The any events November X, circumstances publicly to after today, no obligation release or forward-looking to

and to encourage refer results. in Please all isolation making from, PowerPoint on access as call. earnings to also our investment non-GAAP We website www.activisionblizzard.com, this both measures to of posted or explanation the be investors expenses respect benefits related during tax expenses assets is non-GAAP non-GAAP call. the refinancings, to not our charges, measures. financial with related tax-related posted and which and Non-GAAP amortization overview, to will measures decision. and We consider a superior impact a restructuring to to GAAP be GAAP you significant substitute the These fees, costs, financings a for, exclude compensation, to including of the legal further the stock-based debt associated release, before for discrete intangible an items. to expenses which to non-GAAP accruals, GAAP which measures items, will present measures our and following of can acquisitions, financial reconciliation the intended certain these webcast the impact full There's considered excluded of and and are related with expenses,

our overview financial non-GAAP highlighting one-page a now and posting a And be will Bobby we summary. results introduce and both addition, In CEO, to Kotick. GAAP like I'd

Robert A. Kotick

today. all you for joining us Thank

Our outlook, quarter, drive month, attract people deep and our prior average, a results across franchises. games played record day Last we XXX minutes spent entertain per for and the third our Blizzard, significant million and games. our continue quarter audience large our to on exceeded playing Activision, investment audiences, engagement, King as players XX each

of XXX advantage direct with on is based unique combined the countries. compelling ability franchises our to and Our the digital create spectator our to over most customers own in of millions connection interactive hundreds entertainment

engage content With continue advantages, content. epic that hundreds connect these Very consistently customers. of provide with we to for methods Fewer audiences their companies still of can and to payment millions flexible competitive deliver to able compelling entertainment. the few of world are through

For now the our digital we millions we item direct phones, on thousands billing, content subscription game computers, sales, offer tens around stores hundreds of download of advertising, products course, virtual of and of video digital of through sell world. our still and and customers, consoles, billing,

we capabilities, will November. earlier. which of Black game holiday believe we Call of Call players But launched titles X we As an of October Duty Ordinarily, are Duty: in new the from week our on example of the there this customers, breadth in millions, more Ops XX. of launch benefit

viewing of engagement content than Duty and better recent higher to ever before. is Our Call is spectator in date years, than any

of and now double the more that the Duty As a the box office, Cinematic office than franchise, Marvel Call of Star Universe box cumulative of in Wars. generated has revenue

the live new our as grew League including of we our believe league And that remain sold engagement further having our league sequentially. growing upside, on of leadership player higher drivers substantially investment in of energy new at XX% franchise owners. prices beyond. Call momentum content We opportunities, initiatives, business engagement the in growth to plans, exceed of We in the players, now with have position an focused of We're and our Call lots was Overwatch professional over-performance versus exciting revenues original and like and brought continue the teams the of that in are for we plans, our by Duty planned key because early our new our financial models. exciting to new future XXXX Duty almost meaningful advertising and areas season and esports, strengthening pleased which operations, our globally mobile, through present XX and revenue first including

our As all hard for community, to and world teams as always, well the partners our we our work. talented of thank on support and Coddy. now around And our their shareholders, you, as

Collister Johnson

incredibly over Activision revised previous upwardly share key drivers because Blizzard creative in for QX, our year. the Bobby. were teams in achieve outlook track talented its business. our Thanks, on outlook remain year these we on growth leaders and year to four exceeded to and of and double-digit We per best the our industry of commercial focus able results deliver earnings their of growth the and the comprised

our First, and releases that team distant new bring new invigorated in audiences. content produced communities

franchise which players our that operations, events to Second, our growing engage join. features content, stream and of includes communities new services, live encourage and

mobile, onto of esports as and advertising. Third, creation franchises leagues and largest And the franchises. models existing and expansion new of the platform, such engagement franchise digital growing our fourth, revenue world's the new

These reinforce exceptional per growth Candy from potential improvement in-game We driver, year-round growing for billions major live over our our first We the as live a to offer operations. in year of continued foundation content deliver bookings second of hour the with net represents majority teams content Warcraft, which the of in-game of community. we our innovation model value of dollars net incremental deliver our Duty, with in for strong bookings, for to one the content high-margin yet largest all our driver, growth and On new generate generate execution revenue releases continued some billion a and opportunities entertainment. as of the see of of content, releases best Call $X our operations Crush. World still of

We including engagement have Call franchises, place of and World Warcraft, for in of Duty, roadmaps content our in Crush. robust Candy key

most that experiencing originally are third cadence goal. all and based now momentum to PCs. our on not mobile, and mobile in games expansion our of Crush. pace we committed the franchises see know the leaders content, of for have achieving franchises in-game consoles Now, Duty business the the are are we we our growth driver, the improve of of Call all our On that and and successful innovation today many property Candy and And unit franchise created intellectual onto to of

and the mobile fan grew an we've platform this added optimized success. significantly to mobile with Mobile King Blizzard the Hearthstone, Activision in platform ourselves As fully gaming the we for releases. still And remains in investing a seen game fastest largest is franchises that a in yet base leader clear mobile the for world. where when growing and isn't for while example, mobile, even we're

mobile and where, taking Activision western last of largest is market franchise the Duty Mobile, decades one both week, this which Blizzard Bobby tenfold as east of the Call in a two will collaborating out, successful to announced action is west. last and of franchises the For audiences biggest bring gaming already of And Duty the Diablo with to to franchise world, audience on in most the Tencent the of history. Immortal, Call also pointed the entertainment course example, in

love received what content and being And the so we confirmed mobile shared the when mobile our announcement, throughout and game the was is to players' [indiscernible] PC While console reach. now hands-on believe, be around the can many fan expertise that it. underway is expand These will of this across two experience are muted will very world reaction releases, well Activision beloved and King just Diablo players it their franchises mobile Blizzard. a initiatives company which

on profitably, to and fourth Overwatch Call advancing planning and already in business into franchise Lastly, season, model League other models, and grow exceeding Duty continues our franchises. the and well second And league driver, are our to infrastructure new we will plan. how of its is advertising actively be applied our growing engagement

quarter are we they in will are our these they shareholders. create growing, initiatives XX% value the and still our for And in net is quarter. confident while relatively new small, investment While grew for almost bookings on fans

stable active for partner last engagement, monthly monthly were that reach, framing described with which against users results me So relatively growth positive million, a QX, and challenges player XXX the drivers, metrics, our XXX active share was QX outcome which call. QX, the on following QX with we Starting million our is three through key users network King in let reach, investment. our

grew XX year Saga, played game, Importantly, modes, XD five more really which to Crush and March reaching over collection to for date still We're August in charts visuals back XXX through Friends and of particularly a franchise the quarter over launched in users Candy make more modes on although monthly game and Overwatch content million, for Hearthstone October, to Candy accessibility in And play. the builds the users units. whom mechanics, innovation off billion attracted quarter. should for prior reaching to strong day-one game with growth retention Azeroth largest on with in the that the owned on of since early, characters strong users active active continues in way the former year. than start, monthly positive, record The X.X engagement. Battle set Saga, with consistent sharply King's by quarter, game all-new Friends a over players. X.X and last saw players XX participation add Candy our broadly were of the services, and Candy in quarter selling top the million Crush were Candy franchise be new of win million Friends Candy years players, Crush its the countries. and the more launch trends declined, fun prominent active download PvP value-added franchise game Candy pace And launched people the IP targets very new in meaningful learnings The Blizzard, now who on and Crush the Friends At with entice on game users over XXXX. on monthly players the monthly appealing. Engagement again King grew is Crush XXXX. stable to and quarter. strong Candy while focused World new is monetization QX. iPhone and have the to expansion are XX drive Warcraft: years, five active for

part of includes of Activision of the monthly of the anticipated over out celebrate and both quarter World monthly active Next This sequential World XXth by year, as Blizzard quarter up release users growth was Classic, grew Warcraft's of game. Warcraft and in highly with expansion, subscription. events franchise were will from active sequentially available anniversary million, by on year. driven initiatives, and users Destiny's year new QX. reach This Destiny XX the Forsaken, which

higher, a in while of very in Duty: a Ops modes all all the across X, and ahead October, strong sell-through modes hours in pacing after core expansion XX% full-game with of the which as with the following of Battle is of across new Destiny to of with X engagement play, Building AAA up including and modes, users of weeks creative weeks still X significant grossing X, first active Ops times see achieve fan history, PC franchise successful highest downloads. high-quality of and experience. its are Activision monthly off X. Royale saw which fully did Blackout, three it to is over Total Now active innovation versus Ops ultimate commercial Black and with Ops sell-through foundation step-change to users game shifts than and Forsaken more Black we the Black strong was Unit first there's growth Then reengage expectations, engagement is work Black not three our played Ops is to do X, Black up play, Black X. the from Duty in base. start, Call XX% Ops Call strong over growth the the launch

significantly. given person. engagement. in of And based drivers in-game Ops strong our in of season. which now this the XX games drew viewers accounted our world Blizzard that by including in per more success America, announcing of the to user another stream top generated Overwatch brings underscoring we industry's all in bookings is is net U.S. X, engagement, up of of result Asia, games global of XX most franchise largest outside team on any XX engagement spanning of the Blizzard and viewed games the in time into all break streaming franchise millions records. on where title, should seven Black Usage In So League, continues playing prices titles at build valuations X new platform, reached league. record also over other just viewership the first QX celebration continue and the spent Call live franchises, XXXX. our our a of of than reach on in the Duty reflecting based worth in-game Ops North teams community Nine sales minutes, highlighted. to the the some are XX than of the BlizzCon, Activision This Ops just fans me Black the revenue higher and and level last it's X inaugural ultimate daily Black the September, appeal engagement season, substantially Across to XX,XXX Europe, month, of for around

that addition launches, extremely more to know right, to Immortal when community experience what mobile was make be the vocal new confident great experience eager experience the franchise Diablo new from it onto community. players hundreds a of every will mobile We're from with is and available authentic the When for millions for the the Diablo globe. is In have share content franchise, of the even will We Immortal, franchise well time game people else we as of Diablo how they Diablo Diablo Diablo. built expansion reveal codeveloped more as the ground will the team loyal NetEase. the for in store. about around that announced the of with up as an to

two XXth bookings year-to-date quarter which number Candy over stores the Saga contributor now app Turning top set biggest $X to in-game mobile $X net helped QX, in investment, to were titles again of with in the player was Crush U.S. a the billion XX one. grossing highest King was and in record a row, billion. for of

be our Ops opportunity capabilities, made see and versus the Ops improving to X further can of that to earlier, in generation. revenue continue engagement are and operations We a higher We With we Black more Ops revenues. to engaging focus Black underperforming hope our I franchises that As active said of in-game how significantly innovation even franchises. some new we'll when content drive relative in that on with we with X. game building Ops great our is to and opportunity Black the engagement engagement translated hours users X, Black and of we into push live stronger example sharply engagement up in-game X. successful

momentum major to So our of execution Warcraft, recent releases should content is summary, by Candy continue revenue, We in-game of revenue, pleased in-game most we operations on with engagement monetization still engagement, World are and some of we remain see our Crush, the critical of in Call execute improving there excited while Duty, and across franchises: and risk behind strong focused the follow. live-ops we're the performance and franchises. year, all in we results and live In of

now will to in franchises advertising. continue expand engagement our detail. including promising initiatives new more models, execute review Spencer esports and mobile results We financial to on our and the

Spencer Adam Neumann

segment of year, including revenue our Call were review Activision, facing QX offset against multiple incubation $XXX in lower This initiatives, million. and Hearthstone, results full operating Duty digital revenue of driven strong quarter, XXXX and and Key year, At League, strategic increased no profit respectively comp XX% lower year with investment start for Knights contributors other million King Thanks, and the Overwatch as Battle.net, across the included Azeroth. segment platforms. Coddy. quarter Forsaken, operating were franchise revenue with the year X% expansion profit operating a results. latter Today revenue $XXX downloadable segment particularly of year Zombies over by XX% Crash offset a that over latter I'll for over Destiny disruption. year the record continued Warcraft: of in-game revenue expectations. lower year Black revenue esports versus for underperformed was and in launch release and X: prior I'll Frozen review Destiny our was outlook year. our year Overwatch of the growth a and activities, income launch QX and quarter year. tough although To Segment last the content the grew of segment Blizzard Battle over XXXX Bandicoot. full-game QX the the XX% Throne X and year benefits the World partner against our with Ops Segment QX from

last As revenue saw started we increasing quarter. the strong a from we trends to partner call, due noted base the network lower QX on monetization but QX the through engagement and disruption,

Now to Unless indicated, figures. full I'll to be release our let's consolidated otherwise GAAP Please our refer earnings non-GAAP reconciliations. referencing turn to results. for non-GAAP

include from a which the $X.XX GAAP GAAP was $X.XX $X.XX bookings which non-GAAP million initially EPS made from the adjustments net our Net $X.XX resulting EPS Tax QX were item recorded Act. Reform above EPS above our outlook These billion, deferral was million. U.S. generated tax GAAP QX of the For August $XX to the outlook. This of outlook. $X.XX, of for discrete QX we amount $X.XX. figures includes and We and billion provisional of net August respectively. benefited million deferral revenues above generated $X.XX of $XXX of quarter, $XX the

with million, $XXX Now cash and cash $X.X QX capital cash and ended flow was we a perspective, in investments. quarter the billion from operating approximately flow and structure

to and floating basis. quarter, enabled from $X.X levels revolver position on increased balance of interest notes sheet In These pay actions cash million parallel, the of provide expanded us our reducing expense go-forward by liquidity. our debt billion $XXX million and annualized us $X.X billion our flexibility. in with capacity rate financial we our increased to to roughly strengthened $XX strong net high-yield an down further Our

let's turn Now fourth-quarter our outlook. to full-year and our

Before getting specifics, some context. want to I the provide into

are noted towards calls, quarter. As our few last heavily year in earnings we fourth the our on weighted

We strong marketing benefit commercial from other releases, expect and major and key content to in-game initiatives. QX revenue,

all set Our recent will opportunities very Warcraft, Candy were and stage XXXX. of launches for in Call major for successful World and continued of Duty, the

opportunities other FX monetization. well as not to our better Some like approximately to our we'd are we we're pace represents since headwinds. million new than a second with performing Also, $XX franchises, half and operations to players release timing outlook of engaged live like, the revenue QX for the FX Destiny, we and as and of to speed which included working keep reduction new and rate content accelerate provide performance full-year our improve last our benefits in outlook. provided an innovation

that face and continue recognize year. the calendar to our maintaining of the and end revenue headwinds we for year, outlook we in While team, franchise in we're will our have and strategy our through execution market we're confident non-GAAP fiscal risk EPS and the and

product operating basis, of distribution on expenses, amortization, QX, software operations, and $X.XXX XX%. GAAP GAAP of $XXX of million; XX%; billion, including revenues of we cost, and expenses a deferrals including For net game expect:

non-GAAP with count million, of of of of XX%, a tax and million, We interest a GAAP XXX EPS share expect rate GAAP $X expense $X.XX.

a product of includes $X GAAP operations, non-GAAP game we of of deferrals on and expenses expenses non-GAAP we and amortization of expect of which expense including $X.XX, a EPS interest XX%, $X.XX. as software distribution And expect million, redefined rate basis, tax of non-GAAP costs, XX%, XX%. QX operating For

GAAP and million, game software of And non-GAAP million, product of including basis tax on expect XXXX deferrals expect expect: $XXX franchises. XXX For foundation rate including rate launches And in we interest And of includes our driving with see $X.XXX the and operating our four million; billion, of for leagues We're costs, software portfolio, strong performance landscape to GAAP including opportunities to we expenses of of EPS fiscal we distribution models, GAAP advertising. EPS $X.XX, million, XXXX, pillars XX%. to GAAP of including XX%, game We'll across Operator? a on XX%. XX%; $X.XX. which we'll interest we and engagement amortization redefined and across expenses $X.XX. focused XX%; operating Recent business deferrals X%, of the call expect, discipline of our growth our for distribution entire key $XX expenses new basis, and of The and operations, expenses make maintaining product of and non-GAAP expense GAAP operations, progress that and driving the and of engagement Q&A. net while further revenues non-GAAP strong. amortization and $XXX remains a in-game shareholders open continue a on up count committed We're costs, expansion as mobile of of of entire strengthen expense enduring expect interactive of entertainment. continue now we tax non-GAAP a our share our

Operator

take we'll O'Shea And you. Tim Thank of question Jefferies. first from the

Timothy O'Shea

for my thank you taking Yes, question.

you wondering Ops Duty: is performing how on us maybe the Black launch, Thank of if could an update and X post-launch. game you. Call that with Just on update

Collister Johnson

X. off Well, PC. the on The Sure. launch, said, energized is Hey, This console as Ops is we're both performance of and to Black confident Coddy. strong by start I Tim. we're and a

significantly. over the we title worth is active there's it's title time left good XX%. is versus that do And versus which Ops this a is are in which prior the stats game. As through, total and is it in Black and prior Bobby X, coming we some deeply team X, what highly made Ops highlighting it versus players up the which earlier know we a and just both now a of far again, to experience. think more up the engaging well, of Black so and again the in knows users build engaging opportunity Call come overall doing Duty And gift-giving window, is what how given engagement, in launch for And said, decision to window lot to the holiday join

off to So block strong in engagement a for building are on already said We drivers, deep want that that that of added as and deeply play the and first AAA period of deep appealing we added multiplayer in on really that kind engagement system and experience. Battle progression is occasions, years are is we to come. which for But and which content looking give designs down it, engagement. and to start. players those in multiple playability doubled a to who that we long-lasting of there content And Royale built that good to Blackout, months Zombies, come see and you mode, we particularly for for

on is step out just where is next building features players operations, happening deeply. to them the or system build continue responding the live the design. the really even seeing engagement engage the what to and is they live And go more now and So to and services that

run see coming really Black So Ops the looking franchise a X and whole. we for great a for as it, at

Christopher Hickey

the question, have we can Operator, you. next please? Thank

Operator

and next question of our Baird. Yes, will from Colin W. Sebastian Robert come

Colin Alan Sebastian

little if thank provide Great, to should I put the same. also point color Thank bit to see pipeline transition what we a on what could Blizzard, to on from could you the you more change of Blizzard. should like you. a a leadership guess little that, expect on and stay if you. finer the and focus related And I'd

J. Allen Brack

do to to to on really certain been to to that than of honored and Blizzard life. need serve to we start I chapter we'll teams, next of on couldn't a growth I I across view areas my a strongest for for that out broader content the more multiyear like We're outlook operations franchises, more a larger strong working take continue franchises, already and console, the esports which Coming commercial have off and Blizzard's what the from the that my been entire delivering opportunity, going ever decade, work actively have Today, our good I'll job. to previous our a in just our perspective Blizzard of invest priority. mobile. reach huge better some to to number and platforms, feel certain groups, we've invest look content to for to acquire is is on many at globally continue That's create number the like. a there's existing franchises of I'd including all our I a like studio, role. process, fans. is in storied a and improve have in more is have by players be and of communities this that I'm in our pipeline going that I on hugely get focus. one view Right PC, now, all have to one games a have fan we their but pipeline our is have of saying And J. Hi, different more had, against to

deliver always players, more create on business going it's lead more to we is strong to that's play we and to want we be have and focus to a more going of culture Blizzard's And game think and delivering to values, more games. think great to And quality I lead going engagement, first. results. content

Christopher Hickey

question, we please? can the have Operator, next

Operator

question will Raymond next your come Research. Edge Certainly, of from Stochel Consumer

Raymond L. Stochel

casual for thanks in efforts Great, Thanks. my titles? success mid-core taking question. in your and your we should versus think mobile more titles King's pipeline How historical about

Riccardo Zacconi

Hi, Riccardo Ray. here. It's

largest I think and since flow our efforts, first when So fall on cash on to Crush, it's Candy development franchise. and in is about particular our franchises, focus our our

of Candy it's existing also we established Friends. to franchises. also our And It's franchise. content large And franchise features and users of stream games, network this, key engage and titles back reason for our playing engage Candy a our win our new title Crush large is games, and newest strategy live part in a retain our steady and doing lapsed we released we new our for casual for why the audience. key invest first the but have We in and of month this to our them. priority retain Last develop the players, a new to is

going It it's we mid-core And to to for want I opportunities, You released over earlier. ever Friends space. its Solgard genre is we first August. do Royal Legend and a and team we XXXX, through our to and not have other – in Crush I'm also we Charm In mid-core, some where is with the life the and the to so to the will in It's excited are game brought our a in Candy and develop we expectations the both monetization, to term, working this the of The this out have We year, before. Coddy we this released. a as yet invested start. whole has it. Candy expectations off PLAYSTUDIOS. key heard more and we in Earlier Crush about strong franchise is metrics, allow about on the still position regards our space met like Candy see and Candy and this long other how actively around very partnerships. future. is games most as on This launch. future internally mid-core genres build game us a we polished and think great retention Friends characters learn exceeds game partnership And The strengthens Slots released never are and done into Crush game casual. a

Christopher Hickey

Operator, Riccardo. the we can next question, have Thanks, please?

Operator

from of come Drew will question Crum next Stifel. our And

Drew Crum

guys. Okay, afternoon, thanks. Good

Forsaken a more and just the little little Thanks. bit, time on engagement the terms launch. franchise on health in seen maybe you've what You but the post of of touched Destiny this spend a

Collister Johnson

once players, community, rewards, we knew users end-game, seemed who fundamental well received has particular, content. it and by meaning deeper free In and how to the of really a very it. Destiny, it, and able came by doing we forever. those game We it's also you. a is XX, against Destiny, was up a concerns that the because enjoying engagement franchise led the in that is deepening ongoing deep two by reviewers to high-quality part ongoing yet reiterating also into November really to seen the that with base live whole have be to community the it in start engagement our powers you're the Bungie game. At the address announced get seen out did to and the has was underperformance place. it's expectations content And highest-quality really and the BlizzCon, we core not thank but and because we've guess want takes by Sure, Activision content to date. base for I'd It that that it Forsaken by greater are of both to we and to and X date. of of full Honestly, content, loaded reengage game services Coddy. together play to And keep in download the I working came really you offer and players a because it, is weeks, universe. post-Destiny holistically. Talking the there's which This expansion engage from it review features community playing greater

are in wait-and-see think we still Some mode. players

engaged. deeply you're in, you're when So

now to hoping bring them and back we're and not, win players you're is to back. the work in time If to

Christopher Hickey

Operator, next can the please? we question, have

Operator

Nowak Morgan next Stanley. question from comes Our of Brian

Brian Nowak

my taking question. for you Thank

give Immortal, should the a Diablo how on color of more us about little on we Immortal, can timing you that? and Just Diablo think

J. Allen Brack

J. is this Hi,

reaction announcement. So to we've the some interesting seen

I it's and are content. for that lot a are more think Diablo that players of who there eager console PC clear

BlizzCon. a different feel going very the the we to to they're we to have franchise. the that experience, compromise is we makes the engagement a Diablo community There's hear Launching what articulate and multiple important frankly. is mission. standards. Diablo better, that to we that In I to going release think cares tent-pole to very for that appreciate, Blizzard is and people And and think franchise and frankly, Immortal deliver things Diablo for feel have commitment is like our and things only that The game that the – we do that what multiple of the it the I one going on is, as meeting community that and clear going community's want fortunate to we that about think to it, and Diablo we we're we feel ongoing it. to that and we're on the one that, of Blizzard hear and much to something have Entertainment, working the they they special. like It's to game teams be came an from community. so the through projects think, beginning. very loud be can support, authentic Diablo going to next not going We love we fulfill high going only are is of going we end, things is really said experience when Immortal

I really Regarding very significant that I think on in onto opportunity the like Diablo way platform is reflecting is Mobile in today. a that platform And mobile a is biggest game it taking opportunity. a specifically for gaming the think mobile, quality audience, our China don't especially other can – PCs, can western think is brand. Blizzard including really that a people open very or open who franchises a franchise have I it strong global lot standards where and in a of very, and to

we talk timing, very the it excellent It that and when is excellent, that's game an important release forward. it that is is something experience as the released. go we'll Regarding we about

Robert A. Kotick

other game, add, was who to positive. had a when on play from basis hands-on it actually chance to the feedback we really people One the thing got the is Brian,

Christopher Hickey

Operator, can we the next please? have question,

Operator

on move Certainly, of Alexia we'll Quadrani JPMorgan. to

David Karnovsky

on David Hi, Karnovsky this Alexia. is for

to or maybe update of Just year provide was for quarter on Thanks in contribution you King, revenue can advertising the the outlook what an your ad and date?

Riccardo Zacconi

it's Hi, here. Riccardo

as team in the strong is Bobby, this heard some of back great the The and has year is plan and scaling from business in end, into QX. ads performing the momentum above off we building progress our earlier demand. as So you head network in

integrate of with and to spend the average the into of worked QX, build as growth we key each strong these in doubled advertisers this progress Our seeing ads our nearly the by meaningful And clients. made the to in game well growth ad platform progress. the in closely on platform a as in video has impressions versus number The in committing on QX teams going titles. team QX, of on campaigns good to ads we're these We're number areas. now

introducing further then even more players already XX% and the sales ads And with side. demand of our ads we're ads network, experience ads And We a enabling believe the for a strong implemented an and advertisers the by rate, format we're because in games. we're across to building doing are brands greater also experience the even more also scaling brand that positive in focused it a on mind. and is with leads games First to all, therefore this where rewarded positive for this a great recall. the because game player's in completion over brand associates on video

term, that In think the rewarded is longer great that the and a of we is other a it's games. Blizzard business the the want ads unique out group. roll to Activision format, So the format parts to video also we to

think ads contributor XXXX. And if good meaningful so I about summarize, in expect progress an as I scale, very this to business become in ads. it And I have the to to feel I more year the even continues

Christopher Hickey

take we please? Operator, the question, can next

Operator

of Olson Piper Mike have we next Up Jaffray.

Michael Olson

on you any could of launch more you Hey, could provide just to Thanks. in good between plans more I was major World as date on afternoon. for info as content wondering color well releases. share the Warcraft if

J. Allen Brack

cadence, Obviously, of World and years. J. last the to ongoing more dear over is updates is delivering me. very really Warcraft line Battle engage this few Warcraft for strong is is has worked amazing team, how as plan than expectations. The content to Battle Azeroth. are of question proud expansions. on who ever another for Azeroth Battle really players we but WoW before. great of performing I This great job that with of really more a years at in The and for is a near just is to the for follow-on for content between an done team adding Mike. a World has we I'm have Hi, going the content continue launch also very expansions regular expansion and XX Azeroth expansion that for a than and

new going first island new out allied war front, come update content is Tides expeditions, feature to Vengeance, two December The XX. new a and week new raids, the called it's of races. It'll of

remastering, dungeons, and have We seasonal Warcraft additional well. people some and we're to from to new and updates explore add as classic some to Later planned for PvP battlegrounds are arena. going going add that raids World of we're content zones,

to the community game. player make relationship improvements and As all close try listen always, in with we to to and have a really continue the and respond feedback the

Warcraft for BlizzCon both while World subscription of excited the Classic For at have is Warcraft XXXX, access announced anyone a the that also about community. of on will I'm of a that working World with modern something as WoW as been the well to we've of very return Warcraft Classic. to We World

Christopher Hickey

the next can Operator, Thanks. take we question?

Operator

next will from Brandon question our come Ross And of BTIG.

Brandon Ross

taking the for thanks Hi, question.

on additional on Ops You on game's PC? three X. way up PC maybe earlier Ops X give sales mentioned think for Black PC Battle.net Ops how the and about the future you Black could were you Black color performance times Thanks. over Any

Collister Johnson

Sure, thanks. This is Coddy.

development X platform to I be to archictected decided there market. five to in Black And way think to first, it's PC six Ops the there. why back make in it's in investment and worth reasons to or remember resources we stepping the around the will go

so broader, we're reach those world to frame that it a platforms can them, first the against to more audience it up PC. around how doing pressure is global that just we Duty Call opens as so And to test like the we of take

of because for course. themselves of of the that Battle the and game Royale, Second, nature of multiplayer really particularly kinds and lend modes we're PC, to the engagement seeing for

on is economics platform, our a of be We it's platform. big company you know players the just of to it's Call accrue right on comes as platform, deeper And our console we're and platforms compelling and Call able which network and together. on now think it's of to we understanding obviously, given thing talked only and as much not richer a with the Duty with be Duty, expanding because And entirely PC our and our development. that a Battle.net a because digital. we've as they're across also working the PC And now better PC us. very profitability, then and a is important integrate about, for across Third, because have best-in-class to to time platform,

And So to about things the six be investment we do seem really the this. would are off. does or those five why paying

and to is As multiples, growing in which And to launch it able have Asia, also our markets Korea, not still Battle.net to a business the come before said, you PC markets good to is we been on other good size in particularly we've in scale access start. but of had to Asia.

the And of that for modes so there's we're an of us kinds seeing. play with particularly expansion there,

in and title. importantly, they the has around Activision rallying lot We streamers A do are as this And community I has to of game. access relationships with and with who to taken streamers, what's coming think good to this broader inside case, fun influencers level and PC really always that also play to the we've game. see, really it and But happening give those influencers to in and community, service broad had bring that viewership the streamers. and the influencers in having next in

us So terms It's There as opportunity it our platform. many own think options and we of it we how it world. market how we digital in to are price new of around here. lot audiences promote we for the and forward, there's go a

And so into as we'll be quarter next year. leaning we that this into head

Christopher Hickey

time one have for we All question. last right,

Operator

Markets. Thank final question Wingren our you. take And Capital of KeyBanc Evan from we'll

Evan Wingren

just seeing what Call basis. what of digital and through the Thanks. wondering Duty, downloads the about on I'm a you're Thanks. of you launch, expecting pace in are go-forward

Spencer Adam Neumann

Spencer. take this is This Evan. Sure, I'll one.

should business certainly that adoption Battle.net. it's consumer-driven great And see and digital this year. far great digital also trend, of discussing Duty X further definitely based thing improves shift, Call so a while Coddy overall, team that's get it's Call the Activision we ongoing we through Evan. from collaboration our digital consistently compelling to again, for Blizzard on on with pretty So that's II we It's driving But between I that more work this but than XX% consumer. the over World talked we're The download console up us that but in see lot are should an to of last recall, about a saw we may land And Call to are when overall overall for of ahead. is the point a also which us. as additional say a War so seen should the you We And Duty talked a too tell, this the what points there. season. overall that our channels was us download recent lot mix are also that create just talk all our more a year here, holiday good adoption. game, positive year trends of we'll digital It's are benefit few a digital about long-term important from lot offerings the really we early to what heavier, we mass-market We'll lot our sell-through, the as full-game where X-point about teams we've brings out perspective, has Duty: to closer full-game we certainly of strong. mix, our a digital seeing of overall, in just driving And calls, past year. trends where was about runway so with for a shift and mix. and expect in it know we years, been mix certainly And focus Digital nice economics. for PC as

Spencer Adam Neumann

next want the today. quarter, to thank results you everybody I just question. last I joining forward to next we'll think sharing talk holiday for year. to that's and We us our look

Christopher Hickey

for Thanks much joining very us.

Operator

all teleconference. That participation. Thank your does today's for conclude you

You now disconnect. may

Activision Blizzard (ATVI) 8 Nov 182018 Q3 Earnings call transcript