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

 

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Hearthstone

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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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Overwatch

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 BlizzCon.com.

 

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.

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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.

 

Activision Blizzard to Host Investor Day on Nov 6 at BlizzCon 2015

The Activision Blizzard Q3 2015 financial results conference call will be held after the close of the market on Tuesday, November 3, 2015 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time)

Shortly after, on November 6th, Activision Blizzard will host an Investor Day at BlizzCon 2015. This strategic move integrates Activision Blizzard executives and investors under the same roof where Blizzard will hold the biggest BlizzCon in terms of simultaneous games covered through panels including new Diablo III: Reaper of Souls content, World of Warcraft: Legion, Overwatch, StarCraft II: Legacy of the Void, Heroes of the Storm new battlegrounds and heroes; and a new Hearthstone adventure. In addition, Duncan Jones and Legendary will reveal the Warcraft movie trailer.

Activision Blizzard to Host Investor Day on Nov 6 at BlizzCon 2015 Activision Blizzard, Inc. (Nasdaq: ATVI) today announced that it will host the Company’s Investor Day on November 6, 2015 at Blizzard Entertainment’s BlizzCon® event, at the Anaheim Convention Center in Anaheim, CA , from 8:30 AM to 10:30 AM PT , followed by the BlizzCon opening ceremony which begins at 11:00 AM PT . Chief Executive Officer Bobby Kotick and members of Activision Blizzard’s senior management team will provide an in-depth review of Activision Blizzard’s business, current and future initiatives and long-term opportunities.

Presentations by senior management and a question-and-answer session will be webcast live beginning at 8:30 AM PT on the events and presentations section of the Company’s investor relations website. A replay of the event will also be available. The schedule of events for BlizzCon is available here.

 

Wrathion and the Legendary Ring

To those who have yet to finish the Legendary Questline, I warn you now: massive spoilers ahead.

With 6.2 comes many things: access to a fel-consumed Tanaan Jungle, the final conflict with the Iron Horde, a direct confrontation with the Legion itself, and, arguably most importantly, the conclusion to Warlords of Draenor’s Legendary Ring questline.

Title card courtesy of fellow Blizzplanet contributor Bejamin Vogt!

Title card courtesy of fellow Blizzplanet contributor Bejamin Vogt!

[SPOILERS] Gul’dan’s Fate: Post-6.2 and what’s to come

6.2 is now upon us as of today, and with it, the new, lore-centric raid Hellfire Citadel.

A multitude of story focused threads have been leading towards World of Warcraft’s latest major patch’s raid. Questions wrack the brains of any lore enthusiast as of the latest patch’s release: what will happen to Gul’dan? What is the fate of Archimonde? Is the Legion defeated after 6.2? Does Warlords of Draenor end with Hellfire Citadel’s fall?

Activision Blizzard Q1 2015 Conference Call Transcript

During the Activision Blizzard Q1 2015 financial report conference call, it was announced that World of Warcraft subscriptions are down to 7.1 million.

  • Activision Publishing’s Destiny and Blizzard Entertainment’s Hearthstone®: Heroes of Warcraft™ combined now have more than 50 million registered players and nearly $1 billion in non‐GAAP revenues life‐to‐date.

  • Blizzard Entertainment had the largest Q1 online player community in its history, up a double digit percentage year over year despite no major launches in the quarter. As expected and consistent with our experience following prior expansions, we saw a decline in the World of Warcraft subscriber number. Subscribers ended the quarter at 7.1 million. World of Warcraft’s revenue performance at constant FX has been more stable, driven by continued strong uptake on value added services, and price increases in select regions, which partially offset subscriber declines, particularly in the East. World of Warcraft remains the No. 1 subscription‐based MMORPG in the world.

  • Blizzard Entertainment’s Heroes of the Storm™, which has had over 11 million beta sign‐ups, entered closed beta in January. The Founder’s Pack, released in the quarter for $39.99, granted immediate access to the beta, along with a selection of heroes, skins and more.

  • Blizzard Entertainment’s Hearthstone: Heroes of Warcraft had steady engagement and revenues quarter over quarter, despite no new content releases this quarter. This was driven by sustained pickup of the Goblins vs Gnomes™ expansion content, which was released in the previous quarter.

  • On March 31, 2015, Blizzard Entertainment kicked off closed beta testing for StarCraft® II: Legacy of the Void™, the third installment of the company’s real‐time strategy sequel. Legacy of the Void will be a standalone product that doesn’t require any prior releases, so it will be easier than ever for players to get into the game and experience all of the latest content.

  • On April 2, 2015, Blizzard Entertainment released Blackrock Mountain, the second Hearthstone: Heroes of Warcraft Adventure. Additionally, on April 14, the game was released on iOS® and Android™ mobile phones. The smartphone release helped propel the franchise to over 30 million registered players and the #1 download spot for mobile games in more than 25 countries.

  • On April 7, 2015, Blizzard Entertainment launched the WoW Token System, which enables World of Warcraft players to exchange game‐time Tokens, purchased at $20, to other players for in‐game gold. This serves the dual purpose of enabling players to pay for their subscriptions with their gold and providing players with a secure method for purchasing gold in‐game.

  • On April 23, 2015, Blizzard Entertainment and NetEase, Inc. announced that Sanctuary’s gates have been thrown open to all Chinese heroes, as open beta testing for Blizzard Entertainmentʹs award‐winning action role‐playing game Diablo® III: Reaper of Souls™ has gone live in China. Approximately 3 million people signed up to play the beta in China, and the game has already sold 1 million units across two offerings: the Premium Package for approximately $32 (RMB198) and the Digital Deluxe Package for approximately $64 (RMB388).
  • On June 2, 2015, Blizzard Entertainment expects to launch Heroes of the Storm after an open beta testing period commencing May 19. The release follows on the heels of the epic finale of the Heroes of the Dorm™ collegiate eSports tournament, which was aired live during primetime on April 26 on ESPN2, the network’s first‐ever live telecast of a collegiate eSports event. Students from more than 460 schools across the U.S. and Canada competed for hundreds of thousands of dollars in tuition and other prizes.

  • Blizzard Entertainment expects to begin beta testing for Overwatch™ in fall 2015.

  • Blizzard Entertainment announced that its ninth BlizzCon® will be returning to the Anaheim Convention Center on Friday, November 6 and Saturday, November 7. Tickets went on sale in two batches in April and quickly sold out.

This is a partial transcript of the conference focusing on the Blizzard Entertainment portion. Some of the speakers in this portion are: Dennis M. Durkin (Chief Financial Officer), Mike Morhaime (Blizzard CEO), Bob Kotick (Activision Blizzard CEO), and Thomas Tippl (Chief Operating Officer).

Activision Blizzard Q1 2015 Conference Call Transcript

Fighting the Good Fight: A look at 6.2, World of Warcraft’s present state, and what the future may hold [SPOILERS ABOUND!]

A sickly green mars the formerly star-crossed skies of Draenor. A planet that once housed an indescribable primordial beauty now finds itself besieged to an extent never before witnessed. Savage, free beasts that used to roam this alien planet’s expansive lands find themselves twisted into malformed shadows of their former visage. Indigenous trees that could previously sweep you up in their widespread presence now burn as fuel for the Fel. On top of all this, the throne of command and power formerly possessed by Draenor’s original usurpers, the Iron Horde, has become uprooted, deformed, and guided by new management.

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This mental image of oncoming destruction is something we hopefully have to look forward to sooner rather than later. Welcome to 6.2, the upcoming content patch for World of Warcraft and an update that holds more weight than just being another patch to tally up with all the rest. Gul’dan has wrought control of the once mighty Iron Horde, morphing them into the Fel monstrosities he had always envisioned as their fate. In seizing control of Draenor’s formerly largest threat, Gul’dan has ushered onto the would-be Outlands, a fate far worse than anything the Iron Horde could’ve ever accomplished. By Gul’dan’s hand, the Burning Legion in full force has finally arrived on Draenor. Their way of entry and base of operations lays across the former seat of power for the Iron Horde: Tanaan Jungle. With 6.2, the end may be nigh for Draenor not just in a story sense, but a content perspective as well.

Why the WoW Token is the best thing to happen to WoW in years

Yep, I just went outright and said it.

Since Blizzard announced its intentions to allow players to purchase game-time with in-game money, there’s been a plethora of discussion revolving around one thought: how will this new WoW Token affect World of Warcraft?

The initial reaction has been rather for the change, albeit with some resistance from other commentators. Most opposing commentators have been stating that Blizzard selling gold can only end in a “Pay-to-Win” scenario. A “Pay-to-Win” scenario is exactly how it sounds: you pay with real money to succeed in the game. This practice has been adopted by quite a few online games, including Rift, Diablo 3 (specifically and only when the Real Money Auction House existed), and H1Z1. These games have (or in Diablo 3’s case, had) given players the means of progressing without doing any actual work. When the player reaches the maximum level or endgame content, they could simply go to any of these shops and purchase the best gear and items for their character.

It’s a frightening thought, and it’s a fear that seems to permeate World of Warcraft’s outlook by some presently.

Well, I say you’re all wrong.

First off, can someone explain to me how this is “Pay-to Win” in the slightest? I see no gear being sold. I see no items that offer an advantage over other players being sold.

With WoW’s in-game currency revolving almost entirely around Gold, a vast amount of players save gold, upon gold, upon more gold. In my time playing, I still know a guy who has collected close to 9 million across all of his characters and no matter how he approaches the game, he can’t spend it all.

To have such a surplus, wouldn’t it make sense to have some sort of system to alleviate this and positively change their approach to the game? All that effort after all those years, all that gold compiled.. and it doesn’t pay off at all really.

Sure, you can buy the best cosmetics and mounts in game, but what else is plausible? You can buy pieces of gear that will simply become replaced when you raid, and that’s about it. This surplus situation boils down to having nothing to spend it on, all while still having to pay a monthly subscription fee.

Basically, you’re rich in the game, but you’re not rich in real life. And while real life continues to happen and you pay monthly fee after monthly fee, the totals add up and you’re sitting there with millions of gold and nothing to spend it on.

Let’s look at this change from another perspective: meet Joe, the Average WoW player.

Joe’s loved WoW since he was 12. He’s adored every moment in the game, meeting each with laughs, or screams, or even rage. All of this though, for all the good and bad, it combines into his own wonderful experience with the game.

Despite all this, Joe’s facing problems. No, I don’t mean a boss not dropping the specific piece of loot you want, or some in-game guild drama; I mean real life problems.

This average WoW player loves the game. Sure, he’s not the best at it; he’s mediocre in every sense of the word. But, truly, he loves WoW. Meanwhile and outside of Azeroth’s virtual existence, Joe is having financial issues. He wants to keep playing the game he loves, the game that may have even inspired him to do wondrous things in the world, but he can’t continue as long as his financial means are poor.

Joe comes to one final conclusion: either give up WoW and don’t face financial collapse, or keep playing and cut back further on your financial standing (which, obviously, is the worse decision in my opinion).

“Why the WoW Token is the best thing to happen to WoW in years.”

That’s where the WoW Token alleviates this. The effort players pour into WoW every day, every other day, once a week… pays off in-game AND real life.

Everyone, and I mean everyone is in some ways Joe. You want to play the game, you want to enjoy yourself, you want to socialize with your friends and guild and conquer every challenge that entices you.. but you can’t, purely due to a tacked on fee.

I say this because the game acts as an outlet for more of its playerbase than I believe anyone will admit. When I personally used to seriously raid, the nights we’d progress and eventually down a boss were exhilarating. It made me feel like I accomplished something while everything else in life was moving rather slow. The game acted as a stress reliever and something that I, and many others I would bet, prided myself on.

The game itself is hard to put down, specifically when it’s used as an outlet for one’s frustrations. I know from first hand experience, and I’ve come to know others over my years who have felt the same.

Outside of this reasoning though, I am so for this change because of its moral implications. Blizzard has stated constantly over the years its disdain for Gold Farmers to the point they’ve even sued a Gold Farming company. Over the years we’ve also learnt more about the actual machinations within Gold Farming industries; their entire culture and workplace is toxic and horrible. Many of the Gold Farmers we know today are in fact prisoners to the game others, like myself, enjoy.

With Blizzard more-so overlooking the way Game Time and Gold itself is distributed, it helps to eliminate an entire industry based around borderline slavery and slimy practices. I fail to see how that’s bad. Furthermore, with Blizzard allowing the in-game economy to decide for the worth of a WoW Token, it allows a plethora of players who I personally know to play the game freely without questioning their choice to fund their World of Warcraft subscription over living essentials.

This is a change I welcome with open arms, and I hope those still carrying pitchforks will lower them a tad bit after gaining such perspective.

The game isn’t going Pay-to-Win; it’s adopting a practice that has been becoming much more common as the years have passed.

The game is still the same; it’s not suddenly forcing you to buy a Token. You can freely pay for your subscription month to month per usual.

If anything, the game just had some new life breathed into it. All the players who haven’t touched WoW in years due to its subscription fee will have means to access it without that pay wall we all experience month to month.

And because of this change, I already have a few long time friends who wouldn’t touch the game because they couldn’t pay for it coming back.

So, if you’re still sitting there trying to come up with every X, Y, and Z reason to counter the WoW Token’s existence, I sit here and ask you this:

Is the Token the real problem, or is it you?

Activision Blizzard Q4 2014 Transcript

Activision Blizzard Q4 2014 financial report conference call was held today at 1:30pm PST. Blizzard Entertainment CEO Mike Morhaime reported the latest updates on all current and upcoming games. Overwatch and StarCraft: Legacy of the Void beta testing have no ETA, but he confirmed these will start in 2015.

In addition, Team 5 is working on more Hearthstone content. So far 9 million players have signed up for Heroes of the Storm beta.

Highlights

  • At BlizzCon® on November 7, 2014, Blizzard Entertainment announced a new intellectual property, Overwatch™ — a highly accessible multi‐player game featuring an amazing cast of heroes and set in an all‐new Blizzard game universe.

  • On November 13, 2014, Blizzard Entertainment launched Warlords of Draenor™, the fifth expansion for the #1 subscription‐based MMORPG in the world, World of Warcraft®. The expansion sold‐through more than 3.3 million copies as of the first 24 hours of its availability and helped drive World of Warcraft to more than 10 million global subscribers at the end of 2014.

  • On December 8, 2014, Blizzard Entertainment launched Goblins vs Gnomes™, the first expansion for Hearthstone: Heroes of Warcraft. The release of Hearthstone: Heroes of Warcraft on Android tablets followed on December 15, 2014.

  • On January 13, 2015, Blizzard Entertainment began the closed beta test for Heroes of the Storm™, its upcoming free‐to‐play online team brawler featuring iconic heroes from more than 20 years of Blizzard gaming history. To date, more than nine million players have signed up to beta test the game.

  • In January 2015, Blizzard Entertainment’s Hearthstone: Heroes of Warcraft reached more than 25 million registered players.

  • Additionally, in 2015, Blizzard Entertainment expects to begin beta testing Overwatch

Activision Blizzard Q4 2014 Transcript

Activision Blizzard Q4 2014 Transcript

  • Overwatch going to beta soon this year. No ETA.
  • Blizzard working on new Hearthstone content

Activision Blizzard Q4 2014 Transcript

Dennis Durkin: In 2014, Blizzard generated record avenues and near-record operating income. The year was driven by Diablo III: Reaper of Souls and World of Warcraft: Warlords of Draenor, both of which generated significant revenues and income that will not have comparable releases this year.

In addition, we expect WoW subs to decline as we have seen historically in the year following the release of a large-scale expansion.

In terms of new releases, in January, Heroes of the Storm Blizzard second free-to-play game entered closed beta. While we expect it will take time to ramp in monetization as it builds its audience, we are very excited about the opportunity we have in front of us with this game.

In addition, this year, Blizzard will continue to release new content for Hearthstone as well as bringing the game to mobile devices later in the year.

Lastly, Overwatch, which was just announced in November, is expected to go into closed beta later this year. While we are very excited about this new franchise, it has not been factored into our outlook.

Finally, Blizzard will continue to invest in our own distribution platform, Battle.net, which will need to support a significantly larger audience and commercial capabilities going forward.

 

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Mike Morhaime: Thanks to the efforts of our dedicated and talented employees around the world, Blizzard Entertainment delivered one of our most successful years ever.

In 2014, we released award-winning expansions: World of Warcraft: Warlords of Draenor (on Windows and Mac), and Diablo III: Reaper of Souls (on Windows, Mac and Consoles).

We also launched our first free-to-play game, Hearthstone, which has collected Game of the Year awards, and nominations as well.

Hearthstone was released first on Windows and Mac; and later on iPad and Android tablets, bringing Blizzard into the mobile space for the first time.

Additionally, we supported Hearthstone with two major content releases: the Curse of Naxxramas Adventure and Goblins vs. Gnomes, our first expansion. Our success across multiple game genres and platforms in 2014 drove Blizzard’s best-ever annual revenue, and more importantly, helped us continue expanding our global community of gamers.

On the World of Warcraft side, we ended the year with the release of Warlords of Draenor in November. As we previously announced, the expansion was a great success in all regions, pushing the global player-base above 10 million. The introduction of the character boost as well as design updates to the game made it much easier for lapsed players to return to World of Warcraft, and quickly reintegrate themselves into the community.

Looking ahead, we’re already preparing new content and features to support the game in the coming months. As with previous expansions, we do anticipate a decline in subscribership in the coming months, particularly out of Asia, where the subscriber-base has been more fluid.

Moving on to Hearthstone, the game continued to excite and attract players around the world. After announcing the Goblins vs Gnomes expansion at BlizzCon in November, we launched it a few weeks later in December. This was followed shortly after with the Android tablet version of the game. All this activity helped drive Hearthstone’s highest monthly active players ever in December, as well as our highest revenue quarter-to-date for Hearthstone.

Registered players for the game have now reached over 25 million, capping off a spectacular start for Hearthstone. It’s gratifying for us to see how the global Blizzard community has responded to our first foray into a new genre; as well as the free-to-play market and gaming on tablets. We will keep working hard to build on last year’s momentum with more content in 2015, as well as the upcoming Android phone and iPhone versions of the game.

We do have another free-to-play game in the pipeline with Heroes of the Storm (our Online Team-Brawler). This is a genre that has proven to be very popular in the online space in recent years. We are excited to put our unique spin on this genre, in a game that stands out from the rest, with highly accessible play and iconic Blizzard characters from the Warcraft, StarCraft and Diablo universes.

Heroes of the Storm has recently hit some major development milestones including the start of closed beta in January, along with sales of the Founder’s Pack (a digital bundle for $39.99) that gives player an array of heroes, skins and other content; as well as instant access to the beta test.

We are continuing to ramp up our infrastructure and game service capabilities, allowing us to open up the game to more of the 9 million players who have signed up for beta testing. Excitement around Heroes of the Storm continues to build as we are seeing more grass-root tournaments pop up and major eSports entities are already creating professional teams for the game.

Looking further ahead, we gave the world a glimpse of what’s next for Blizzard at BlizzCon.

We kicked off the show by unveiling Overwatch, a team-based first-person shooter featuring an amazing cast of characters of heroes; and set in an all-new Blizzard game universe. The announcement trailer for Overwatch was a viral sensation on the Internet, while attendees and press alike raved about the gameplay after trying an early build on the BlizzCon show floor.

In addition to Overwatch, we also showcased the final chapter in the StarCraft II trilogy: Legacy of the Void. This will be a stand-alone expansion, meaning anyone can jump right into the StarCraft II experience without needing to own the previous games. We expect beta testing for both Overwatch and Legacy of the Void to start later this year.

For a while now, we have been discussing the strong pipeline of Blizzard games. Gamers have long known us for World of Warcraft, StarCraft and Diablo. Now with Hearthstone added to the mix, and Heroes of the Storm and Overwatch soon to follow, we will have more games in more genres and on more platforms than ever before.

As busy and successful as 2014 was, we’re looking to build on that momentum this year and deliver even more excitement to players in 2015.

 

Past Activision Blizzard financial conference calls for trend research in our archive.