Activision Blizzard Q2 2017 Financial Conference Transcript

The Activision Blizzard Q2 2017 financial conference call took place today Aug 3 at 4:30pm EST. If you read the transcript after the break, it seems that World of Warcraft Patch 7.3 is scheduled internally for release after GamesCom 2017. Blizzard will feature the content there (unless Coddy was referring to something else).

  • Activision Blizzard had 407 million Monthly Active Users (MAUs)B in the quarter.

  • Blizzard had the biggest quarterly online player community in its history with a record 46 million MAUsB, up 38% year-over-year. The Overwatch community continued to grow more than a year after launch, setting another all-time MAUB record with the release of two seasonal events in the quarter. Hearthstone® MAUsB grew year-over-year and quarter-over-quarter to an all-time record, driven by its expansion, Journey to Un’Goro™.

  • Blizzard had Q2-record time spent. In April, Blizzard launched Uprising, an Overwatch seasonal event that included a player-versus-environment mode that drew record play time. Overwatch’s Anniversary event in May and June also drove strong engagement with record participation in customization items. Time spent in World of Warcraft® grew year-over-year in the second quarter, and the Legion™ expansion continued to perform ahead of the prior expansion.

  • Blizzard announced the first seven team sales for the Overwatch League , the first major global professional esports league with city-based teams, and the league is set to begin its inaugural competitive season later this year.

  • Blizzard announced a live-streaming media rights partnership for esports and in-game content across a number of franchises, but excluding Overwatch League content.

  • Activision Blizzard delivered nearly $1 billion of in-game revenues in the quarter with record performance in the first half of 2017.

  • Blizzard’s Overwatch, Hearthstone, World of Warcraft, and Diablo® III, which debuted new content during the quarter, drove strong in-game participation.

The event didn’t have Blizzard CEO Mike Morhaime this time as a speaker, but he answered a question during the Q&A. The conference had the following speakers: Activision Blizzard CEO Robert Kotick, Collister “Coddy” Johnson, and Spencer Neumann. Read the most pertinent parts of the event in the transcript.

Activision Blizzard Q2 2017


Potential Expansion Leak in the 7.3. PTR

UPDATE: As several people have pointed out on Twitter, I shamefully forgot to mention another expansion leak via-dataming, done by our very own contributor Handclaw. The article has been updated with this information.

WoWhead has broke news about the recent patch 7.3 PTR build which could potentially be a look into the next expansion. A set of armor named after Kul Tiras has been datamined, in a situation eerily similar to three previous expansion leaks accomplished via datamining. Read on past the jump to learn more about these past leaks and what this might mean for expansion seven.

Activision Blizzard Q1 2017 Conference Call Transcript

Activision Blizzard held a financial conference call yesterday (May 4) to report the latest earnings, and progress updates. There was not much info on upcoming content, but Blizzard is working on new content across all IPs.

In concurrent registered player numbers, Hearthstone peaked with 70 million players, and Overwatch with 30 million players. While no numbers will be revealed for World of Warcraft subscriptions, there was a performance compared to subscriptions during Warlords of Draenor. Revenue was increased by 50% due to the Overwatch shop (during the Lunar Festival and Uprising events), and Legion subs.

Read the transcript below (heavily edited to focus on the Blizzard Entertainment aspect of the conference call).

Activision Blizzard Q1 2017

Activision Blizzard 2016 Q4 Conference Call Transcript

Activision Blizzard held its financial conference call to reveal details of its business performance during the fourth quarter of 2016. The most striking highlight of the conference happened during the Q&A when it was revealed there are works to bring Overwatch linear media to expose Overwatch to new audiences.

This harkens back to the launch of Activision Blizzard Studios earlier last year which already launched Skylanders Academy Season 1 on Netflix. It is possible that Overwatch might debut in Netflix at some point in the future.

In October 2016, Stacey Sher revealed during an interview that Activision Blizzard Studios was considering to do something similar to Skylanders Academy (Netflix) for StarCraft and Overwatch.

Seems we are going to have an interesting BlizzCon announcement this year.

Audience Reach

  • Activision Blizzard had 447 million Monthly Active Users (MAUs)A in the quarter.

  • Blizzard had its highest annual MAUsA in 2016 at 36 million, up 37% from 2015 and up 87% since 2014. Additionally, Blizzard achieved record fourth-quarter MAUsA of 41 million. Overwatch became Blizzard’s fastest game ever to reach over 25 million players globally. The title broke the previous launch year record for unit sales set by Diablo® III in 2012 and received 55 “Game of the Year” awards. World of Warcraft® MAUsA grew 10% in 2016 and over 20% year-over-year in the fourth quarter on the back of the successful third-quarter launch of the expansion, Legion™. Also, Hearthstone® had its highest annual MAUsA in 2016, growing more than 20%, in part due to the fourth-quarter expansion, Mean Streets of Gadgetzan™.

  • Activision had the biggest online player community in its history in 2016, with annual MAUsA of 50 million for the year, up 3% from 2015 and up 23% since 2014. Fourth-quarter MAUsA were 51 million. Call of Duty® was the number one console franchise globally in 2016, and in North America for the 8th year in a row.1 Life-to-date on current-generation consoles, the Call of Duty franchise had 3 of the top 10 games.

  • On October 28, 2016 , Activision Blizzard Studios , in partnership with Netflix, debuted Skylanders™ Academy, a new TV series celebrating the beloved kids franchise. The second season will be delivered in 2017, and a third season has been ordered by Netflix.

Activision Blizzard 2016 Q3 Financial Conference Transcript

The Activision Blizzard 2016 Q3 financial conference call was held on November 3 (the day before BlizzCon started), and for the second time in a row it didn’t feature a roundup by Mike Morhaime. Thomas Tippl discussed the progress and status of Blizzard games, with some highlights by Bob Kotick. Mike Morhaime was present during the conference, however. He participated in the Q&A at the end.


Kotick: We delivered another record quarter, and we continue to focus on building enduring franchises for our nearly 500 million monthly players around the world. Continuous innovation within existing franchises, and the creation of new franchises (like Overwatch) helps broaden our audiences, deepen engagement, and increase player investment.

We believe gaming is the most engaging form of media, and players spend tens of billions of hours a year with our franchises. In fact, this quarter alone, our players spent over 10 billion hours playing our games. This strong engagement and the social experiences that are such an important part of gameplaying have been the catalyst for our new opportunities in enhanced game monetization, expansion of our franchises into linear media and consumer products, and greater involvement in advertising supported spectator gaming like we have with MLG.

It is estimated that as many as 225 million people are now watching organized gaming competitions. Competition between videogame players is becoming as thrilling to watch as traditional professional sports. With the launch of professional global leagues, we believe games spectating will grow significantly as an opportunity for us and for our players. The increased popularity of spectator gaming will enable us to celebrate and reward our players, and recognize their accomplishments. Professional gamers will eventually be as celebrated, honored, and recognized as professional athletes.

Professional gamers will be the role models and goodwill ambassadors of the digital generation, and we believe great new business opportunities are emerging throughout the esports ecosystem, which we helped pioneer more than a decade ago with games like StarCraft.

In May, Blizzard released Overwatch, which in about four months has already eclipsed 20 million registered players making it Blizzard’s fastest, new intellectual property to reach that mark; and Overwatch was specifically designed to be a definitive competitive game.

We are uniquely positioned to realize the full potential of esports. We have some of the most successful iconic franchises in gaming, and direct relationships with nearly half a billion monthly active users. A powerful combination that distinguishes us from the rest of our competitors; and we have unmatched commercial capabilities that have served our shareholders extremely well over the last 25 years.

Before I hand off the call, I want to take this opportunity to thank the talented people who drive the success at our company every day. They are our greatest asset, inspiring play, competition and community by creating the most engaging entertainment in the world.


Activision Blizzard Announces Better-Than-Expected and Record Third Quarter 2016 Financial Results

Activision Blizzard announced better-than-expected and Record 2016 Q3 financial results with nearly 1 billion in revenue from in-game content.



Blizzard had the biggest quarterly online player community in its history, with 42 million MAUsA, up 25% quarter-over-quarter and 50% year-over-year. This reflects the continued success of Overwatch® and the launch of World of Warcraft®: Legion™. Blizzard has more than doubled its MAUsA in just two years.

On August 30, 2016 , Blizzard launched World of Warcraft: Legion, which sold-through 3.3 million copies on day one, matching all-time records achieved by previous expansions, and ranking amongst the fastest-selling PC games ever. The new expansion grew franchise MAUsA by nearly 30% quarter-over-quarter.

Overwatch became Blizzard’s fastest game ever to reach over 20 million players globally, with a roughly even player base split between east and west. Overwatch also held the number one position in share of play time in Korean Internet Game Rooms from launch all the way through the third-quarter.

Blizzard’s Hearthstone®: Heroes of Warcraft™ had record quarterly MAUsA, which grew a double-digit percentage year-over-year.



Activision Blizzard 2016 Q2 Financial Results Conference Call

Activision Blizzard held today its Q2 Financial Results conference call. For the first time, Blizzard Entertainment CEO Mike Morhaime did not report the progress across all video games. His report was read by Thomas Tippl (Chief-Operating-Officer) instead. Morhaime, however, participated in the Q&A session at the end of the conference.



Special highlights of the conference:

Remain focused on key priorities: building audiences globally, growing engagement by investing in new content, celebrating our players through initiatives like esports, and continuing to be a great place to work.



  • The Warcraft film is one of the highest grossing Hollywood releases ever in China and the biggest game-based movie release worldwide
  • World of Warcraft has gotten strong momentum in China following the release of the Warcraft film
  • World of Warcraft Legion will launch on August 30. Pre-purchases tracking in-line with last expansion (Warlords of Draenor).



  • Overwatch global launch was a resounding success. Over 15M Overwatch players to date have played about 500M hours
  • Added new hero, competitive play mode, & Summer Games content with new soccer-like mode
  • Overwatch achieved the 15M milestone more quickly than any game in Blizzard’s history
  • Player-base split roughly evenly between East and West
  • Overwatch was launched simultaneously across multiple platforms and regions, including China and Korea
  • Overwatch broke Diablo III’s record as fastest-selling PC game in China
  • Overwatch holds the #1 position in Korean Internet Game Rooms with over 30% share of play-time



  • Record quarterly time spent with the launch of Whispers of the Old Gods
  • Deep engagement drove double digit revenue increase year-over-year in the quarter
  • One Night in Karazhan, the next adventure is expected to launch next week



  • 10th BlizzCon this November 4-5, to include Overwatch World Cup




Activision Blizzard 2015 Q4 Financial Conference Transcript

Blizzard Entertainment plans to launch World of Warcraft: Legion this summer, shortly after the Warcraft movie by Legendary. Overwatch is planned to launch this Spring 2016. Lot of new content coming to various Blizzard games.

During the Q&A, Morhaime revealed there will be a new Hearthstone expansion launch this Spring — which seems to confirm we should take a close look at PAX East this April. I’ll be there for coverage.

Read the transcript below:

Activision Blizzard 2015 Q3 Financial Results Transcript

Blizzard Entertainment CEO Mike Morhaime discussed his report before the shareholders.

  • Hearthstone: The Grand Tournament pushed engagement by a 77% over the prior quarter. Highest revenue ever.
  • World of Warcraft: New content after Patch 6.2 hinted. Not related to the Legion expansion.
  • StarCraft II: Legacy of the Void pre-purchase outpaced Heart of the Swarm.
  • Diablo III: Sales passed the 2 million milestone in China.
  • Heroes of the Storm: Player growth in Q3 after the release of the Eternal Conflict expansion.
  • Overwatch: Over 7 million players opted-in to beta, and Blizzard plans to run stress-test weekends to add more testers.

Activision Blizzard 2015 Q3 Financial Results Conference Call

Morhaime: Q3 was another strong quarter for Blizzard. We had significant activity across our franchises and our MAUs for the quarter were up 50% year-over-year. Blizzard continues to be well-positioned for growth. We are operating more franchises on more platforms and in more regions than ever before.

We have an exciting upcoming content of late; and we are continuing to foster powerful connections with our community: online through our pro and amateur eSports programs, and at live events like BlizzCon.


Activision Blizzard 2015 Q3 Financial Results Transcript




Hearthstone in particular had another great quarter driven by the launch of The Grand Tournament expansion. Along with continued strength on mobile and continued strong performance in all markets, the new expansion helped push engagement for Hearthstone even higher in Q3 than in Q2. Year-over-year engagement was up 77%, leading to Hearthstone’s highest ever quarterly revenue.

In addition, we recently launched a fully-localized version of Hearthstone in Japan. The game already had an established audience in Japan, but we were pleased to provide them (as well as new players) with a version that makes access even easier.

Activity around Hearthstone eSports is also continuing to grow and drive excitement. Over the past few months, we concluded several tournaments feeding into the World Championship at BlizzCon.



World of Warcraft

For World of Warcraft this quarter, we released a key update, which helped maintain stability in the subscriber base, and we are currently at work on the next update.

We also had very exciting news at Gamescom, with the announcement of World of Warcraft: Legion, our next expansion. Players responded very positively, not only to the new features coming with the expansion, but to the care we are putting into the content.

In addition to hosting the World of Warcraft Arena Championship, we’ll have more to share on Legion at BlizzCon this week.



StarCraft II

On the StarCraft II front, excitement for Legacy of the Void (which will be sold as a standalone product launching on November 10th) remains strong. In fact, pre-purchases for Legacy of the Void have continued to outpace those for the previous release: Heart of the Swarm.

At the professional level, the StarCraft II World Championship Series competition has been intense, and extremely fun to follow. I encourage everyone to tune in at BlizzCon. or online for the final round. It’s amazing to see some of the most skilled pro gamers in the world in action.



Diablo III

As for Diablo III, we were pleased that it continued to bring in new players in Q3; and in China it passed the 2 million sales milestone.

We released a huge well-received content update in the quarter. Altogether, we have added a ton of post-launch content to Diablo III, and this reflects our strong commitment to the game and to the community.



Heroes of the Storm

Heroes of the Storm also brought-in more players in Q3, driven in part by our Diablo-themed content series. While we are still in the early days for the game, it has been great to see the ongoing enthusiasm and support from players as the community continues to come together.

We held the Regional Championships for our Road to BlizzCon Series: including the Americas Championship in Las Vegas, and the European Championship in Prague over the past few months.

These events featured teams with international followings across multiple games (which is exciting for the Heroes of the Storm community and for eSports as a whole).

We are looking forward to seeing the winners of the Regional Championships face off at BlizzCon for the World Championship title.




There is also a lot of ongoing excitement around Overwatch, which just started its beta test last week.

We have already had more than 7 million players sign up to participate, and that is not including China.

We are keeping access limited in order to focus feedback, but we plan to periodically run stress-test weekends around the world that will allow many more players to join in.

We will be sharing the latest Overwatch news at BlizzCon, so I hope you will tune in.


BlizzCon 2015 Overview

As you can tell, we are very excited about BlizzCon, and all the eSports action taking place there this week.

BlizzCon represents the depth and breadth of our portfolio, and the height of eSports competition in our games. It’s a massive undertaking and it wouldn’t exist without the super-passionate, highly-engaged audience of Blizzard gamers around the world.

Tickets again sold out very quickly, and we are using more of the Anaheim Convention Center than-ever-before to host the 25,000+ live attendees.

The BlizzCon Virtual Ticket is again available this year, and viewers will have multiple channels for catching as much of the show as possible.

We will be broadcasting the opening ceremony, and all the eSports events for free globally; and we are expecting the total audience to again number in the millions. You can tune in via


Warcraft Movie

Duncan Jones will be there to talk about the Warcraft Movie, and he will debut the commercial trailer during our opening ceremony.

We are also happy to have Wil Wheaton hosting our community contests, and Linkin Park will help close out the show on Saturday night.

I look forward to seeing those of you who will be attending, and I encourage everyone else to follow the action online.

Q&A Session

Can you provide any update on Overwatch? It looks like the game will lend itself well for eSports. So if you can provide any color on the eSports front for Overwatch and then how we should be thinking about the distribution strategy going forward, that’d be great.

Morhaime: Okay. And on the Overwatch questions, we just entered beta. Feedback from the beta has been extremely positive. On the eSports question, I think that Overwatch has a lot of potential with eSports. We’ve done some experimenting internally at Blizzard with our own show matches internally at the company. It’s very fun to watch. But in terms of announcements about business model or distribution, we’re not ready to talk about that today. We’ll have more information about Overwatch at BlizzCon.


Activision Blizzard Acquires Candy Crush Saga developer King Digital Entertainment

Update – 11/4: Added the transcript of what Robert A. Kotick said about the King Digital Entertainment acquisition during the Activision Blizzard 2015 Q3 Financial Results conference call.

Activision Blizzard announced an agreement to acquire King Digital Entertainment — better known for Candy Crush Saga, Bubble Witch Saga, and Farm Heroes (among many other mobile, PC, iOS, Android and Facebook game titles).

This huge $5.9 Billion acquisition truly makes one wonder what Activision Blizzard has planned to make this acquisition worthwhile. Imagine the possibilities: Blizzard IP/King Digital crossover games? (Remember the PopCap’s Peggle Warcraft Edition?)

Activision Blizzard to Acquire King Digital Entertainment

activision-blizzard-logoSANTA MONICA, Calif.–(BUSINESS WIRE)– Activision Blizzard, Inc. (Nasdaq: ATVI) today announced better-than-expected financial results for the third quarter of 2015 and an agreement to acquire King Digital Entertainment for $5.9 billion in equity value ($5.0 billion in enterprise value). The addition of King’s highly-complementary business further positions Activision Blizzard for growth across platforms, audiences, genres, and business models. Please see our separate press release for details.

As a result of this announcement, Activision Blizzard will host a conference call to discuss both the transaction and earnings. The call will be broadcast over the Internet at 5 a.m. Pacific Time (8:00 a.m. Eastern Time) before market opens on Tuesday, November 3, 2015.

About King Digital Entertainment

King is a leading interactive entertainment company for the mobile world, with people all around the world playing one or more of our games.

We have developed more than 200 fun titles, and offer games in over 200 countries and regions. Our franchises include Candy Crush, Farm Heroes, Pet Rescue and Bubble Witch.

We have 340 million average monthly unique users, as of second quarter 2015, across web, social and mobile platforms.

At King, we design games with a broad appeal, which allow people to play for a moment, then move on with their day and pick up their game later. Our games are also synchronised across platforms, allowing players to switch seamlessly between devices and platforms and continue their game wherever they left off, so they can play anywhere, any time and on any device. For us, this is encapsulated in the idea of bitesized entertainment.

We make our games available for free, while players can purchase virtual items priced relative to the entertainment value they provide. We embed social features in our games that enhance the player experience. We also build on a unique and passionate company culture predicated on collaboration, humility and respect. We believe all of these elements in combination have made our games a great part of our players’ daily entertainment.

King has game studios in Stockholm, Bucharest, Malmö, London, Barcelona, Berlin, Singapore and Seattle along with offices in San Francisco, Malta, Seoul, Tokyo, and Shanghai.


Activision Blizzard 2015 Q3 Financial Results Conference Call

Kotick: Over the last 25 years, we have demonstrated a consistent ability to identify opportunities to serve and support our audiences and deliver superior value to our shareholders. We are disciplined, deliberate, and methodical — whether in the development of new franchises, entering new segments and geographies, and perhaps most importantly: identifying transactions with great opportunity for shareholder-value creation.

With respect to the latter, we have had very positive results, and track records over the last 25 years; because we care deeply about how we allocate our capital, and prioritize our opportunities. The way we considered King is consistent with our proven history of evaluating acquisition opportunities.


King operates in a rapidly-growing segment. They have a truly world-class management team, exceptional game development talent, and great commercial instincts. The transaction is accretive, brings new audiences, and the King Corporate DNA is oriented towards great game-making with commercial potential.

When we merged with Blizzard Entertainment, we found the right partner with extraordinary leadership. And when others dismissed the sustainability of Blizzard’s incredible capacity for innovation, we were certain patience would be rewarded. And it has.

We see a lot of the same characteristics today in King. We think now is the right time to enter mobile gaming in a meaningful way. Widespread mobile-access around the world has opened up significant demand for engaging, fun content that players can enjoy anytime, anywhere.

By acquiring King, which has a proven ability to turn its games into iconic franchises, we will be a participant in the fastest-growing segment in gaming — a category that today is estimated to be $36 billion. It is still extremely fragmented, and we believe has great promise for the future. We also believe King’s management team: including Riccardo, Sebastian and Stephane; are some of the most talented executives in the game industry.

We have long admired their talents, and after spending a lot of time over the last 3 years getting to know the King team, we realized how truly special their company is. They have over 1,600 incredibly talented people committed to a community of more than 450 million monthly active users. Acquiring King will solidify Activision Blizzard’s position as the world leader in interactive entertainment, positioning the combined company for growth across platforms, audiences, genres and business models.

Combining Activision Blizzard’s portfolio of some of the very best interactive entertainment franchises on the console and PC with King’s leading mobile titles will create a world-class portfolio of games with strong endearing appeal to a wide range of demographics and audiences along with leadership positions across key platforms. The number one console franchise was Call of Duty, the number one PC franchise was World of Warcraft, and now two of the top five highest-grossing mobile games.

We will have one of the largest entertainment networks in the world with over half a billion monthly active users, immediately opening up meaningful opportunities to grow and cross-promote content to provide enhanced offerings to our collective players while expanding into untapped geographies. The combined company will have diversified capabilities across business models, like subscription, up-front purchase, free-to-play and micro-transaction.

Through our world-class properties and enhanced capabilities across segments and business models, we will be able to diversify our revenue streams, enhancing our position as the most profitable interactive entertainment company in the world. The result is a transaction that will be accretive to estimated 2016 non-GAAP EPS estimates by approximately 30%. I couldn’t be more excited to welcome King into the Activision Blizzard family.

Q&A Session

Kotick: From an investment perspective, King will, like Activision and Blizzard, operate as an independent unit. And so they’ll generate their own capital, that capital will be available to them to invest against their business opportunities.

One of the big benefits I think they’ll get is plugging into the great framework that we’ve created for long-term strategic planning, and that includes capital allocation. Remember, King generates a lot of operating profit, in fact, more operating profit than virtually any other gaming company that has ever existed. And so they’ll be able to continue to generate that operating profit and invest that cash flow in new opportunities.