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Activision Blizzard (ATVI) Q3 2018 Results - Earnings Call Transcript

Nov. 08, 2018 8:13 PM ETActivision Blizzard, Inc. (ATVI)12 Comments
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Activision Blizzard, Inc. (NASDAQ:ATVI) Q3 2018 Earnings Call November 8, 2018 4:30 PM ET


Christopher Hickey - Activision Blizzard, Inc.

Robert A. Kotick - Activision Blizzard, Inc.

Collister Johnson - Activision Blizzard, Inc.

Spencer Adam Neumann - Activision Blizzard, Inc.

J. Allen Brack - Activision Blizzard, Inc.

Riccardo Zacconi - Activision Blizzard, Inc.


Timothy O'Shea - Jefferies LLC

Colin Alan Sebastian - Robert W. Baird & Co., Inc.

Raymond L. Stochel - Consumer Edge Research LLC

Drew Crum - Stifel, Nicolaus & Co., Inc.

Brian Nowak - Morgan Stanley & Co. LLC

David Karnovsky - JPMorgan Securities LLC

Michael Olson - Piper Jaffray & Co.

Brandon Ross - BTIG LLC

Evan Wingren - KeyBanc Capital Markets, Inc.


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 - Activision Blizzard, Inc.

Thank you. Good afternoon and thank you for joining us today for Activision Blizzard's third quarter 2018 conference call. With us are: Bobby Kotick, CEO; Coddy Johnson, COO; and Spencer Neumann, CFO. And for Q&A, J. Allen Brack, President of Blizzard; and Riccardo Zacconi, CEO of King, will also join us.

I would like to remind everyone that during this call, we will be making statements that are not historical facts. The forward-looking statements in this presentation are based on information available to the company as of the date of this presentation. And while we believe them to be true, they ultimately may prove to be incorrect.

A number of factors could cause the company's actual future results and other future circumstances to differ materially from those expressed in any forward-looking

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Comments (12)

Assender profile picture
Does anyone know what revenue sources this company is getting from the leagues?

I see that there are two leagues that ATVI is involved with: Call of Duty league and Overwatch league. The latter one being a success while the former one is struggling. I gather from the above that ATVI sold 20 Overwatch teams at higher and higher valuations. I hear that teams were sold for 10 million each at some point. That would make it 200+ mil. Still some of these teams would have been sold last year and it is non recurring revenue. For a company that has 7 billion in revenue, this doesn't really move the needle. So, what else is there to the leagues? How does ATVI monitize? is it just from increased engagement?
its all downhill from here
Wow, they have optimistic view for diablo mobile still now.
China is a huge mobile gaming market..
Assender profile picture
@cmbartoakgrove I am not seeing a lot of revenue in this company from China. All of Asia Pacific, of which China is only a part of, is just 12% of the revenue. Makes me think that whatever barriers to entry exists in China, this company has not been able to navigate them to date.
Right, but China is a *penetrable country in the mobile gaming market, where Activision is going to try to penetrate. Grow mobile gaming micro transaction revenue. sorry just saw this
kitsinu profile picture
Blizzard announced "Diablo Immortal" instead of "Diablo 4" or "Diablo 2 HD Remastered" in front of a live audience recently. "Diablo Immortal" is a cell phone / tablet game. Blizzard and Diablo's audience has been computer gamers, while a cell phone / tablet game is typically a pay-to-win financial plan. Diablo's fans were not happy and booed the announcement. It has gone downhill from there(!) with Blizzard deleting videos critical of "Diablo Immortal" on YouTube and even deleting thumbs downs registered against the "Diablo Immortal" trailer and announcement.

Between the down market and Blizzard really screwing up here, it is no wonder that ATVI is down 12%. If anything, it is surprising that it isn't more. Go look around YouTube to see videos ranting and raving against Blizzard's actions to get an idea how serious this is.
The mobile is an idea to pull in younger kids and open to a wider audience base. Die-hards fans will definitely be disappointed as the game will have to be "dumbed" down for mobile.

But, from a shareholder perspective, probably quite a bit cheaper to produce as a PC/Console style game can have movie size budgets to create.
N3utra profile picture
I suspect the total development budget over the course of about 8 years, including marketing, server hosting, infrastructure and online components, you're looking at about $250M. Not sure where the audience thinks that money is going to magically come from in order to create the Diablo IV game they want, but Diablo Immortal is a great way to find financing for it, at a low cost, low risk development rate.

As a shareholder, it was a great announcement. I understand the player base's frustration, but if you're not internal and aware of these costs, or a shareholder, I wouldn't really expect you to not be. The escalated outrage was unnecessary though.
Once all the call options expire worthless, they will catch a bid.
Totally rigged advantage market makers again. Just look into it and watch. Happens all the time. Crooks.
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