Q3 2021 Activision Blizzard Inc Earnings Call

November 2, 2021

Good afternoon, and welcome to the Activision Blizzard third quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad. To withdraw your question. Please press Star then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Hickey Senior Vice President of Investor Relations. Please go ahead.

To withdraw your question. Please press Star then two.

Please note this event is being recorded.

I would now like to turn the conference over to Chris Hickey Senior Vice President of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us today for Activision Blizzard third quarter 2021 conference call. With us is Bobby Kotick, CEO, Daniel Alegre, President and CFO and

And for Q&A, Rob College, Mikey Barbara and her mom sent many leaders of Activision Blizzard and King respectively 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 statements. These include the impacts of the COVID-19 pandemic, the risk factors discussed in our SEC filings, including our 2020 annual reports on Form 10-K, and third quarter 2021 Form 10-Q, and those on the slide that is showing. The company undertakes no obligation to release publicly any revisions to any forward-looking statements. To reflect events or circumstances after today November 2nd 2021.

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 statements. These include the impacts of the COVID-19 pandemic the risk factors discussed in our SEC filings, including our 2020 annual reports on Form 10-K, and third quarter 2021 Form 10-Q, and those on the slide that is showing.

The company undertakes no obligation to release publicly any revisions to any forward looking statements.

Events or circumstances after today November <unk> 2021.

We will present, both GAAP and non-GAAP financial measures during this call. We provide non-GAAP financial measures, which exclude the impact of expenses related to stock-based compensation, the amortization of intangible assets and expenses related to acquisitions, including legal fees costs expenses and accruals.

The amortization of intangible assets and expenses related to acquisitions, including legal fees costs expenses and accruals.

Expenses related to debt financings and refinancings restructuring and related charges. The associated tax benefits of these excluded items and significant discrete tax-related items, including amounts related to changes in tax laws amounts related to the potential final resolution of tax positions and other unusual or unique tax-related items and activities.

These non-GAAP measures are not intended to be considered in isolation from as a substitute for or superior to our GAAP results. We encourage investors to consider all measures before making an investment decision. Please refer to our earnings release, which is posted on www.activisionblizzard.com to refer to GAAP and non-GAAP reconciliation and further explanation with respect to our non-GAAP measures.

First of all got to non-GAAP reconciliation and further explanation with respect to our non-GAAP measures.

There was an earnings presentation, which you can access with the webcast and which will be posted to the website following the call. And now I'd like to introduce our CEO Bobby Kotick.

And now I'd like to introduce our CEO Bobby Kotick.

Thank you, Chris, and thank you all for joining us today. As I said during our last earnings call, I want Activision blizzard to be the leader in our industry for workplace culture.

As I said during our last earnings call.

I want Activision blizzard to be the leader in our industry for workplace culture.

Since then the leadership team and I have been hard at work listening to employees and implementing meaningful changes. I'd like to review the actions we've taken over the past few months with you today.

I'd like to review the actions we've taken over the past few months with you today.

Yes.

As we've made clear in certain instances relating to workplace culture, we should've done a better job ensuring our values were embraced across all parts of the company.

Over the last few years, we've been focused on the improvements that are necessary to become a mottled workplace.

We are of course, taking these actions because any single instance of wrongful conduct at our company is unacceptable.

But these actions we're taking are also the right ones for our business success. We can't achieve our business ambitions without the very best talent.

We can't achieve our business ambitions without the very best talent.

People with the talents we need have more alternatives for highly paid work opportunities than ever before. If we don't constantly evolve as a great place to work, we won't retain or attract the talent we need to realize our tremendous potential.

If we don't constantly evolve as a great place to work, we won't retain or attract the talent, we need to realize our tremendous potential.

As a company, we have more opportunities ahead of us than I've seen in almost all the years I've led the company. The success we've achieved thus far is the result of an overwhelmingly large number of extraordinarily talented people with high integrity and good values focused on delivering great games to our players, which has resulted in superior shareholder returns.

The success, we've achieved thus far is the result of an overwhelmingly large number of extraordinarily talented people with high integrity and good values focused on delivering great games to our players which has resulted in superior shareholder returns.

This company and many of its leaders and so many of our talented employees past and present have shown strength of will dedicated to the achievement of bold aspirations.

Our commitment to make Activision Blizzard the most welcoming and inclusive company in the world would be accomplished the same way our industry leadership has been accomplished.

Focusing commitment, persistence, strength of will, the unwavering ambition of truly talented people with equally unwavering integrity and the continuous commitment to improvement.

In September we announced the comprehensive agreement with the US equal opportunity Commission, which is subject to court approval to strengthen policies and programs intended to further improve the prevention of harassment, discrimination and related conduct.

As part of this agreement will establish an 18 million dollar fund to compensate those who have experienced such behavior at our company.

With respect to pay equity, another critically important issue that we have always worked hard to ensure we achieve. We recently disclosed two employees results overview of 2020 pay equity out of the company, which was conducted by an independent research firm.

The US analysis showed that women on average or slightly more than men for comparable work in 2020. And we're committed to compensation remaining equitable for men and women performing comparable work always.

And we're committed to compensation remaining equitable for men and women performing comparable work always.

Last week, we also announced a number of important new workplace initiatives. We announced a zero tolerance harassment policy companywide.

We announced a zero tolerance harassment policy companywide.

This includes tougher rules and greater consistency across the organization to make certain reports are always properly and promptly handled.

Now any Activision Blizzard employees found through our new investigative processes and resources to have retaliated against anyone for making a complaint will be terminated immediately.

In many other instances of workplace misconduct, we will no longer rely on written warnings. Terminations will be the outcome, including in most cases of harassment based on any legally protected category.

Terminations will be the outcome, including in most cases of harassment based on any legally protected category.

Future employment contracts and equity awards will state the termination for these reasons will result in immediate forfeiture of future compensation.

Another is our pledge to increase the percentage of women and nonbinary people in our workforce by 50%.

Today, approximately 23% so very global employee population identifies as women are non-binary, so within the next five years and hopefully faster we will seek to increase our percentage of women and nonbinary professionals to more of the one third across the entire company.

To further this commitment will be investing an additional $250 million over the next 10 years in initiatives to foster expanded opportunities in gaming and technology for underrepresented communities.

Additionally, based on feedback from many employees, we are waiving required arbitration of future individuals' sexual harassment and discrimination claims.

Based on feedback from many employees, we are waiving required arbitration of future individuals' sexual harassment and discrimination claims.

That means for any employee who chooses not to arbitrate an individual claim of sexual harassment, unlawful discrimination or related retaliation arising in the future. The company will waive any obligation to do so.

As we report regularly on our progress and our financial results, you'll continue to hear more about our workplace initiatives, which we firmly believe will help us remain one of the world's most successful entertainment companies.

I want to thank our employees for their continued commitment to each other, the company and our players. For those employees past and present to have been brave enough to step forward and share their stories, we continue to be committed to investigating all claims thoroughly and holding people accountable.

For those employees past and present tubing brave enough to step forward and share their stories, we continue to be committed to investigating all claims thoroughly and holding people accountable.

For those employees who have shared feedback, thoughts, suggestions, concerns and complaints and there are many of you. We hope you can see from our actions that we are listening. We're evolving our organization through your ideas and active participation in their execution.

We hope you can see from our actions that we are listening we're evolving our organization through your ideas and active participation in their execution.

And for those employees who have worked tirelessly to deliver great experiences to our players, your resilience in these challenging times is inspiring.

The resilience in these challenging times is inspiring.

We expect that we will continue to face challenging and negative media attention regardless of our progress, but we are determined to stay focused on providing great opportunities in the very best work environment for our talented employees to deliver the very best game for our players. And to continue to provide superior returns for our shareholders.

As shareholders.

Thank you for your participation today, and now I'll turn the call over to Daniel to share the results of our operations for the last quarter.

Thank you, Bobby. Before I discuss our operating results, I want to take this opportunity to thank our incredibly talented teams across the entire company who share their passion to make it exciting and groundbreaking experiences for our players all around the world. Activision Blizzard third-quarter results were above our outlook.

Before I discuss our operating results I want to take this opportunity to thank our incredibly talented teams across the entire company who share their passion to make it exciting and groundbreaking experiences for our players all around the world.

Activision Blizzard third quarter results were above our outlook.

Our monthly active users and time spent in our content were consistent with the year-ago level, even as regions continued to reopen. While net bookings and operating income grew year over year.

While net bookings and operating income grew year over year.

This performance again illustrates the structural expansion in our largest franchises. As we execute our strategy of delivering gaming experiences across new platforms with more regular content and leveraging multiple commercialization models, including free to play.

Execution against this strategy enables us to grow our communities, including in geographies outside of our traditional regions to deepen engagement and to create more opportunities for player investment. Critical to this is a continued investment in creative talent.

Critical to this cause a continued investment in creative talent.

We continue to grow our developer head count in the third quarter and have increased our development organization by hundreds of talented professionals year to date, including announcing new studios and expansions and multiple new cities globally.

There's geographic diversification strategy is paying dividends, allowing us to tap into critical talent pools in all corners of the world.

As we grow our teams with new hires, we are keenly aware of the importance and responsibility we have to ensure a safe working environment for our people. This is our number one priority.

Specifically in recent months, we have taken actions that resulted in the departure of a number of individuals across the company.

Additionally, we have seen increased competition in the market for talent and higher voluntary turnover that has partly offset our success in hiring. As we have worked with new leadership from Blizzard and within the franchises themselves, particularly in certain key creative roles.

As we have worked with new leadership from Blizzard and within the franchises themselves, particularly in certain key creative roles.

It has become apparent that some of the Blizzard content plan for next year will benefit from more development time to reach its full potential.

While we are still planning to deliver a substantial amount of content from Blizzard next year. We're now planning for a later launch for Overwatch 2 and Diablo 4 than originally envisaged.

We're now planning for a later launch for Overwatch, two and Diablo four than originally envisaged.

These are two of the most eagerly anticipated titles in the industry and our teams have made great strides towards completion in recent quarters. We believe in giving the team some extra time to complete production and continue growing their creative resources to support the titles after launch will ensure that these releases debate and engage their communities for many years into the future.

We believe giving the team some extra time to complete production.

You're going to create a resources to support the titles. After launch will ensure that these releases debate and engage their communities for many years into the future.

These decisions will push out the financial uplift that we had expected to see next year. But we are confident that this is the right course of action for our people our players and the long term success of our franchises.

But we are confident that this is the right course of action for our people our players and the long term success of our franchises.

Now I will cover our third quarter franchise and operational highlights across our business units. Starting with Activision. Where on average of 119 million people engaged in our content monthly in the third quarter.

Starting with Activision.

Where on average of 119 million people engaged in our content monthly in the third quarter.

Call of Duty continues to sustain reach engagement and player investment well above levels seen prior to our introduction of free to play experiences across console, PC and mobile.

Monthly active users in the franchise were consistent year over year on console, PC and grew on mobile. Console and PC engagement trends were consistent with typical trends as we moved away from the premium launch, even as regions continued to reopen through the quarter.

Console and PC engagement trends were consistent with typical trends as we moved away from the premium much even us regions continued to reopen through the quarter.

Console and PC mouse and time spent exhibited very similar retention from Q2 to Q3 as our experiences in prior years. In-game player investment on console and PC remained well above pre war zone levels at approximately three times the level of Q3 2019. And strong conversion from free to play drove premium sales higher than in any third quarter prior the launch of war zone.

In game player investment on console and PC remained well above pre war zone levels at approximately three times the level of Q3 2019.

Strong conversion from free to play drove premium sales higher than in any third quarter prior to launch a war zone.

And our teams are all set to launch the next phase of exciting new Call of Duty content for players worldwide.

This Friday, sees that release of Call of Duty, Vanguard. And on December 2nd we will rollout call of duty Warzone Pacific the biggest update to the wars and experience since launch.

As we've demonstrated with modern warfare and Black Ops Cold War. The release of Vanguard is just the first step in delivering the community an incredible amount of ongoing content, live engagements and much more.

Our cross campaign zombies, multiplayer and war zone, there's no bigger experience or better value over the duration of the games lifecycle across our premium and free to play business.

And then we expect Wars on Pacific and its new caldera map to take the free to play experience to another level. The premium and free to play experiences are more integrated than ever before, sharing the same engine, weapons integration and content integration as well as Call of Duty standards of cross play cross progression and more.

The premium and free to play experiences are more integrated than ever before sharing the same mentioned weapons integration and content integration as well as call of duty standards of cross play cross progression and more.

Both titles are set to benefit from ricochet, a new anti-cheat technology aimed at addressing one of the key improvements requested by the community. We are confident that our players are in store for an incredible set of experiences this holiday season and beyond.

We are confident that our players are in store for an incredible set of experiences this holiday season and beyond.

On mobile, Call of Duty net bookings grew over 40% year over year in the third quarter driven by double-digit growth in the west and a continued contribution from the game in China.

The team continues to refine the player experience, building on learnings from the titles first two years to optimize content, events and features for our communities around the world.

And features for our communities around the world.

And at the same time, we continue to ramp our teams working on new mobile title within the Call of Duty universe.

In addition to hiring a substantial number of developers over the last quarter. We are pleased to announce last week the acquisition of digital legends, a Barcelona-based mobile game developer that will further bolster the world class team we are assembling.

Turning to Blizzard, monthly active users were 26 million in the third quarter. For Diablo, our plan to deliver an era of unprecedented levels of content for the franchise has experienced a strong start with the September release of Diablo II resurrected.

For Diablo, our plan to deliver an Arab unprecedented levels of content for the franchise has experienced a strong start with the September release of the outflow to resurrect it.

The return of one of the most acclaimed titles in PC gaming history. First week of sales of the title with the highest recorded for remaster from our company and we have seen strong ongoing demand, particularly in Korea, where the game is proving what are the most popular titles in internet game rooms.

First week of sales of the title with the highest recorded for remaster from our company and we have seen strong ongoing demand, particularly in Korea, where the game is proving what are the most popular titles and internet game rooms.

With such strong engagement. The team is now working hard to ensure that players have the smoothest possible experience as they explore the world the sanctuary.

This is just the first step and Blizzard plans for the franchise on mobile Diablo immortal is in public testing and remains on track for release in the first half of next year.

And with Diablo four set to be the foundation for great experiences for PC and console fans over many years. We believe the pieces are in place to expand and serve that Diablo community better than ever before.

Turning to Overwatch where millions of people continue to engage in both the game and Esport, September saw the Grand finals of the Overwatch League become the most-watched in the leagues' history.

Starting in the spring the next season of Overwatch League will run on an early build of Overwatch twos, new five V5 competitive multiplayer modes, giving the community a fantastic view into the development team strong work of an acceleration in the franchise.

And the team plans to follow this with new content and initiatives to engage existing, returning and new Overwatch players next year.

Within the Warcraft franchise, World of Warcraft reach and engagement continues to benefit from the combination of the modern game and classic under a single subscription.

The two games offer players more ways to engage and create more opportunities for our teams to deliver compelling experiences to fans of the franchise. With deep engagement across both classic and modern. Wow's overall subscriber base is stronger than we typically see at this point after a moderate expansion launch.

With deep engagement across both classic and modern.

Wows overall subscriber base is stronger than we typically see at this point after a moderate expansion launch.

And for 2021, World of Warcraft is on track to deliver its strongest engagement and net bookings outside of a modern expansion year in a decade.

Our WoW team has been rolling out numerous quality of life improvements across our modern and classic games franchise and response to player feedback. And today the modern game released its latest content update with classics soon to launch fresh servers with greater challenges to engage the passionate community.

Hearthstone net bookings were stable year over year in the third quarter. And in October the team launched Mercenaries, an innovative roleplaying mode that gives the hearthstone community an entirely new way to play the game.

Initial results for mercenaries have been very encouraging and we believe Hearthstone is positioned for a return to year over year growth in net bookings in the fourth quarter.

Across the Warcraft franchise, our teams are working on a substantial pipeline of content plan for next year, including experiences and classic and modern WoW, more innovations in hearthstone and getting all new mobile warcraft content into players' hands for the first time.

Blizzard cannot wait to share more details on their plans. The King business continues to deliver fantastic results with very strong year over year trends for both in-App purchases and advertising. Mouse or $245 million in the third quarter.

The King business continues to deliver fantastic results with very strong year over year trends for both in App purchases and advertising.

Mouse or $245 million in the third quarter.

Kim's deep capabilities in live operations are driving engagement for both existing and new players. There's played across the King portfolio grew year over year in the third quarter with players responding positively to our more frequent cadence of compelling in-game content and events for key titles.

There's played across the King portfolio grew year over year in the third quarter with players responding positively to our more frequent cadence of compelling in game content and events for key titles.

The team's prior actions to grow payer conversion alongside ongoing strong execution in user acquisition. Sop payer numbers growing by double-digit percentage versus the year-ago quarter.

These initiatives drove over 20% year over year growth in in-game net bookings for candy crush. With candy once again, the top-grossing game franchise in the US App stores.

Additionally, at the end of the third quarter, King launched the all-stars US tournament, a competitive is that the soft candy crush saga players battle to be crowned the ultimate Candy crush all-star.

The event has driven meaningful increases in installs, the amounts played and in-App purchases in recent weeks. Highlighting competitive gameplay is another opportunity for franchise growth and our investment in the Candy Crush brand.

And rounds played and in App purchases in recent weeks highlighting competitive gameplay is another opportunity for franchise growth and our investment in the candy crush brand.

In addition to this innovation and success of Candy, for several quarters now, King has been accelerating and refining content delivery and farm heroes, its second-largest franchise. This work continued to bear fruit in Q3 and year to date in-game net bookings have grown around 20% year over year.

And finally King's advertising business again grew robustly with quarterly revenue growing sequentially and year over year to a new high.

Both volume and pricing grew strongly year over year benefiting from the teams growing relationships with demand partners and the ongoing ramp of new categories of advertisers.

In summary, Q3 saw solid year over year growth in the business and we see substantial growth ahead for our portfolio of internally owned IP. While we have seen some slippage in the release schedule for specific titles at Blizzard, we could not be more excited about our plans to unlock the full potential of our largest franchises and to drive meaningful expansion in our reach engagement and operating performance.

While we have seen some slippage in the release schedule for specific titles at Blizzard.

Could not be more excited about our plans to unlock the full potential of our largest franchises and to drive meaningful expansion in our reach engagement and operating performance.

This is only possible because of our team. I wanted to share an announcement about the leadership of one of those teams. Jen Oneal, who has been co-lead at Blizzard has been a passionate advocate for bringing positive changes to the video gaming industry and has been doing so as a board member of women in gaming international or Wiggy, a nonprofit organization that cultivates and advances the quality and diversity in the global games industry.

I wanted to share an announcement about the leadership of one of those teams.

Jen O'neill, who has been co lead a blizzard has been a passionate advocate for bringing positive changes to the video gaming industry and has been doing so as board member of women in gaming international or Wiggy, a nonprofit organization that cultivates and advances the quality and diversity in the global games industry.

Jen has decided to leave the company at the end of the year and we have agreed to support Jen and her involvement with Wiggy by making a donation to wiki and honor of Jen.

In our remaining months for the company, given our commitment to this work, Jen will build the foundation of programs funded by the grant. As such, Mike Ybarra will take on Jen's leadership responsibilities.

As such Mike Ybarra will take on Jens leadership responsibilities.

It is great to see how employees at our company are committed to bring about the positive changes in our industry and beyond. And our leadership team stands behind these efforts. Now I will hand over to Armin who will provide more color on our financial results and outlook.

Thanks. First, I'd like to reiterate that ensuring it workplace that provides opportunity for all and the most inclusive way is our top priority.

Lastly, I'd like to reiterate that ensuring it workplace that provides opportunity for all and the most inclusive.

An inclusive way is our top priority.

Today, I'll review, our third-quarter results. What is the outlook for the fourth quarter and full-year 2021. Our third-quarter results were ahead of our prior outlook. With year over year growth in net booking, revenue, operating income and EPS against difficult comparable.

What is the outlook for the fourth quarter and full year 2021.

Our third quarter results.

We're ahead of our prior outlook.

With year over year growth.

Net booking.

Revenue.

operating income and EPS against difficult comparable.

Importantly, each of these metrics has also grown year over year on a year to date basis. So even if the recent continue to reopen, our business is operating at a significantly greater scale, and that's being processed through growth initiatives across our largest franchisee.

So even if the recent continue to reopen.

Business is operating at significantly greater scale, and that's being processed through growth initiatives across our largest franchisee.

Let me start with our consolidated financial results. Unless otherwise indicated, I'll be referencing non-GAAP figure. Please refer to our earnings release for a full GAAP to non-GAAP reconciliation. Now, for the quarter, we generated quarter 3 GAAP revenue of $2.07 billion. $100 million above our outlook. This includes [inaudible] of $190 million. Net bookings of $1.88 billion, with $30 million above our August outlook.

Otherwise indicated.

Non-GAAP figure.

Please refer to our earnings release for crude GAAP to non-GAAP reconciliation.

No one quarter, we generated quarter three GAAP.

GAAP revenue of 2.0.

$7 billion.

$100 million.

outlook. This includes [inaudible] of $190 million. Net bookings of $1.88 billion, with $30 million above our August outlook.

Includes metro cognition.

$190 million.

Net bookings of $1 8 billion.

$30 million above our August outlook.

And we generated GAAP EPS of 82 cents. And quarter three non-GAAP EPS of 89 cents, which was above our guidance.

And quarter, three non-GAAP EPS of <unk> 89.

Which was fought Ethan.

Our guidance.

These figures include the net recognition of deferrals of 17 cents. Quarter three EPS included a 3 cents from an unrealized loss on investment as well as the benefits from a lower than anticipated tax rate in the quarter.

Quarter three EPS included a <unk>.

From an unrealized loss on investment.

It benefits from a lower than anticipated tax rate in the quarter.

Now turning to cash flow and the balance sheet. Quarter 3 operating cash flow was $521 million. More than doubled a year ago, driven by lower cash taxes and favorable working capital movement.

Operating cash flow.

$121 million.

More than doubled a year ago, driven by lower cash taxes and favorable working capital movement.

Our cash and investments at the end of September we have approximately $10 billion. Ended the quarter with a net cash position of approximately $6.4 billion.

Ended the quarter with a net cash position of approximately $6 4 billion.

Growing shareholder value through capital allocation is a key focus, and over the long term, investors should expect a balanced approach across investing in creative talent in our own business. Strategic M&A, and returning cash to shareholders per share repurchases and dividend.

Strategic M&A, and returning cash to shareholders share repurchases and dividend.

Now, let me turn to our segment's results. Activision revenue was $641 million. Segment revenue was [inaudible] as expected in our outlook.

Activision revenue was $641 million.

Segment revenue with no water.

As expected you know.

This was due to the launch of Tony Hawk in the year ago quarter.

And declines in Call of Duty upfront in in-game net bookings against the quarter that benefited from [inaudible] and the early ramp of [inaudible]. Year to date, net bookings for the Activision segment and the call of duty franchise were higher year over year.

Year to date net bookings for the acquisition Beckman and the call of duty franchise, where higher you're right.

With a franchise now consistently operating at greater scale and before our free to play and mobile initiatives. Activison's third-quarter operating income was $244 million and operating margin was 38%.

Activism third quarter operating income was $244 million and operating margin was 38%.

This is revenue of $493 million. Grew 20% year over year, driven by the successful launch of Diablo II ressurected. Year to date, net bookings for Blizzard and for War of Warcraf largest franchise were higher year over year. First-quarter operating income $188 million with an operating margin of 38%. King delivered another record quarter. Revenue grew 22% year over year to 652 million. That's a new high.

Grew 20% year over year, driven by the successful launch of Diablo.

Year to date net bookings.

And well go to war cloth lots of claims that were higher year over year.

First quarter operating income $188 million with an operating margin of 38.

King delivered another record quarter.

Revenue grew 22% year over year.

<unk> hundred 52 million.

That's a new high.

Third-quarter indium net bookings grew in the mid-teens year over year, but advertising grew approximately 60%. King's third-quarter operating income was a record $303 million. With an operating margin of 46%. The team's strong execution across life operation, marketing and advertising broke records for both revenue and operating income for the third quarter and year to date. Kink's ability to delight and engage players with a robust life operation provides a lot of learning that we've done to apply to both Activision and Blizzard and not just in mobile.

King's third quarter operating income was a record $303 million.

With an operating margin 46%.

Strong execution across life operation marketing and advertising broke records for both revenue and operating income for the third quarter and year to date.

Kinks ability to delight and engage player with a robust life operation provides a lot of learning that we've done.

To apply to both Activision and Blizzard and not just in mobile.

Looking across our segments, in-game net bookings of $1.2 billion. Roughly flat year over year, and approximately $500 million higher than the level of 2019. And during the third quarter, mobile net bookings grew over 20% year over year, driven by the strength of both Activision and King. Consumer spending and advertising with the non-mobile content was almost $1 billion in the quarter. And we see substantial room for further growth as we take each of our key franchises with the largest and fastest growing platform leveraging our creative and life operations capabilities across Activision, Blizzard and King.

Roughly flat year over year, and approximately $500 million higher than the level of quality.

2019.

And during the third quarter mobile net bookings grew over 20% year over year, driven by the strength of course, Activision and King.

Consumer spending and advertising with the non mobile content was almost $1 billion in the quarter.

And we see substantial room for further growth as we take each of our key franchises with the largest and fastest growing platform leveraging our creative and life operations capabilities across Activision Blizzard and King.

Now, let me turn to our outlook for the fourth quarter and full year. With regard to our slate in addition to ongoing lifestyle and in-game content across the portfolio, the fourth-quarter would be active in really Call of duty Banger this Friday November 5th. Followed by the biggest Watson update Western Pacific on December 2nd. Blizzard launched a new mercenary smoking Hot film in mid October and we released the next upcoming expansion data this quarter.

Fourth quarter and full year.

With regard to our slate.

Listen to ongoing lifestyle and in game content across the portfolio.

Fourth quarter would be active in really.

Call of duty Bang This Friday November 5th.

Followed by the biggest Watson update yet wasn't specific on December 2nd.

Blizzard launched a new mercenary smoking Hot film in mid October and we released the next upcoming expansion data this quarter.

And King continues to support Candy crush and other game across the portfolio with numerous seasonal events and new features. Our teams have done a phenomenal job building this content, even with many of them continue to work from home. And be concrete for our players to get their hands on this experience.

With that said we remain prudent in our revenue assumptions for the fourth quarter. And regarding cost, we decided to further step up investments in mobile marketing given the strong returns we are currently seeing and into compliance.

And prudent in our revenue assumptions for the fourth quarter and.

And regarding car.

Sorry to further step up investments in mobile marketing given the strong returns we are currently seeing and into compliance.

We expect the earnings impact of these investments to be effective tax rate and we continue to expect full-year earnings per share to be up strongly year over year and comfortably ahead of the outlook provided at the beginning of the year.

Yeah earnings per share to be up strongly year over year and comfortably ahead of the outlook provided at the beginning of this year.

Now, let me get into the specifics. For quarter-four on a GAAP basis, we expect revenues of $2.02 billion. Including [inaudible] of $763 million. We expect net bookings of $2.78 billion. We expect GAAP operating margin of 30%, a tax rate of 26%, GAAP and non-GAAP share count of 785 million and EPS of 54 cents. Well caught up on a non-GAAP basis, we expect a tax rate of 25% and non-GAAP EPS of 60% including net deferrals of 67%.

<unk> 2 billion.

Including Netflix.

63 million Boe.

Net bookings of $2 $78 billion.

GAAP operating margin of about 30% a tax rate of 26% GAAP and non-GAAP share count of 785 million and EPS of <unk> 54.

Well caught up on a non-GAAP basis, we expect a tax rate of 25% and non-GAAP EPS of <unk> <unk>.

Including net deferrals of 67%.

This means that on a GAAP basis for 2021, we now expect revenues of $8.6 billion, including domestic recognition of deferrals of $10 million were. We do not expect net bookings of $8.65%.

We do not expect net bookings of $8 six 5%.

We expect GAAP operating margin of 37%, a GAAP tax rate of 18%, GAAP and non-GAAP share count of $84 million and GAAP EPS of $3 and 27 cents.

For 2021, on a non-GAAP basis, we expect a tax rate of 17% and non-GAAP EPS of $3.17, including net deferrals of 6 cents.

With respect to risks. We're taking action to address stakeholder concerns and the adverse consequences to our business from requisition. If we experience further adverse publicity regarding our company and executive, increased competition for talent, our voluntary turnover. If it can reduce productivity well, although negative consequences related to these issues.

We're taking action to address stakeholder concerns.

Adverse consequences.

From a growth position.

If we experience further adverse publicity regarding our company and executive.

Increased competition for talent.

Voluntary turnover.

If it can reduce productivity well, although negative consequences related to these issues.

Business likely would be impacted.

But therefore carefully monitoring all aspects of our business by any such impact.

Taking action to help address them now and I'll come back to provide an update on how we are planning for next year specifically.

That's the starting point our business continues to operate at much greater scale.

We have clear line of sight to expanding the reach engagement and financial performance of our business further in the coming year.

If we apply the framework.

So where do you think kind of crush.

Other franchises in our portfolio.

At the same time as Doug described we have taken the decision to give people watching dealt with it.

The extra time, they need to deliver the experiences that community.

And just that the franchise is up for maximum success over a multiyear period.

Therefore, our current enough planning for a material contribution from all of which two are the outlook one frankly too.

While these developments will push out the natural uplift that you expected to see next year.

Firmly believe that this is the right course of action for our people for the long term success of the franchisee and for our shareholders.

We still have a lot of content in the pipeline for next year for our largest franchisee and we can't wait to unveil and we'll provide more color on that and to provide our full year outlook and go to a temporary.

In conclusion, we see substantial opportunity for shareholder value creation ahead.

Unlocking the full potential of our portfolio.

The only possible because of our people Andrew.

And we remain focused on ensuring a safe working environment that is essential to enable connectivity and professional growth for all employees now I'll ask Mike to join Bobby denim itself.

So your question operator.

We will now begin the question and answer session.

To ask a question you May press Star then one on your telephone keypad.

If you are using a speakerphone please pick up your handset before pressing the keys.

To withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble the roster.

Okay.

Yeah.

And our first question will come from Matthew Thornton of Truth Securities. Please go ahead.

Hey, good afternoon everybody.

Maybe maybe one just to come back on some of the workplace issues that are that the team has talked about can you talk a little more about just the progress around rectifying. Some of these issues. How we can think about the milestones and the timeline towards being resolved in and being best in class in and how you plan to kind of communicate that debt.

Progress along the way any more color there would be really appreciate it thanks guys.

Yeah. Thanks, Matt This is Bobby.

I feel very good about the progress actually right now a workplace leadership is my focus.

Our opportunities for growth as we've talked about have never been better, but we won't be able to realize all of that growth potential without talent.

And to retain and attract the talent we need we obviously has to be recognized as the very best place to work.

This means we have to be the most welcoming inclusive environment.

And we've got to have the best industry, leading programs for growth and development. We've got to have the best recruiting capabilities for the diverse talent, we need to create the very best games and we have to have competitive compensation that is aligned with performance.

If you think about it over the last 30 years, we've shown that we can consistently create the very best games and that has always translated into long term shareholder returns that are far greater than the S&P 500, and compared to most companies.

And we believe that superior shareholder returns will continue to be delivered through our franchise strategies. The operational excellence that were recognized for.

And we also recognize that to achieve the same level of shareholder returns, we have historically and to ensure continued excellence in execution.

We believe we and all great companies need to deliver workplace excellence.

This means some of the things that we've discussed over the last few weeks, but harassment and discrimination free work environment recruiting excellence to ensure we have diverse skills abilities and talents and a culture that celebrates a rewards commitment to these principles.

I couldn't be more passionate and committed to being the most performance focused welcoming and inclusive company in entertainment.

What you heard me discuss earlier is just the beginning of the actions that we intend to take to achieve that objective.

And of course, we need accountability. So we will continue to provide regular progress.

In updates both quarterly to our shareholders as well as annually in our ESG reports and we will be monitoring the progress of our business units our franchise teams and our functional leaders with respect to workplace initiatives.

And that status will also be reported to our employees quarterly.

Right now and going forward communicating with our employees and getting feedback has been a crucial part of the process. We will obviously continue to keep our investors informed but.

The work that we've done with our employees as a resulted in very constructive new initiatives more that we'll continue to announce over the next few months, but.

That's the long answer to your question is I feel good about the progress that we're making but thanks for the question.

Thanks, Matt Operator next question please.

The next question comes from Mike Hickey of the Benchmark Company. Please go ahead.

Hey, congrats on the quarter. Thanks for taking my questions . Can you give us some more color here on the reason it was slipped to Overwatch II and Diablo four? And can you give us a sense of how long would you have to wait? Thanks, guys.

The graphs on the quarter. Thanks for taking my questions just two.

Can you give us some more color here on the reason it was slipped to Overwatch two. And Diablo four. Can you give us a sense of how long would you have to wait thanks guys.

And Diablo four.

Can you give us a sense of how long would you have to wait thanks guys.

Hi, This is Mike you Barbara Thanks for the question I'd like to first recognize Virgin O'neill, who has been an incredible partner here at Blizzard, though we will all miss her greatly and we wish her all the best as we work with her on a plan to make an industry wide impact through the weighted ground.

Personally I want to thank her for her leadership.

Since becoming the co leader of Blizzard three months ago and meeting with teams around the company I have been impressed by their passion for what they are creating and our drive to build a more inclusive culture.

Looking at our upcoming releases across all of our teams here a blizzard we have a deep bench of veteran development talent and we have new leadership on both Overwatch, two and Diablo for both our season Bulls or developers with over 30 years experience at the company between them.

The teams have made great progress in past important milestones recently and we expect these to be a fantastic releases, but theres, obviously been a change in leadership, we looked at what was left in the final phases of production with fresh eyes, and we saw that allowing the teams more time would enable both great experience without launch and now also.

Help ensure that everything will be in place to engage the communities for many years to come.

This extra time will also help us continue significantly increasing the size of our development teams ahead of launch again to ensure we are following up the releases with substantial content to continue delighting. The community. We're not sharing release states at this time, but I have absolute confidence in these new leaders and their teams.

James to deliver they care deeply about creating high quality products and allowing everyone on their teams to bring their best self to their projects. Thanks for the question.

Yeah. Thanks, Mike Operator can we have the next question. Please.

The next question comes from Clay Griffin of Moffett Nathanson. Please go ahead.

Hey, good afternoon. King was clearly a bright spot this quarter. I'm curious if you could maybe drill down on some of the fundamental drivers that we've seen particularly from an in-app net bookings growth perspective, I know you've mentioned the frequency of content and seasonal content and whatnot. But would love to hear any color on player demographics or cohort analysis to help us get a sense of some of the trends here. Thanks.

Kim was clearly a bright spot this quarter I'm curious if you could maybe drill down on some of the fundamental drivers that we've seen particularly from an in app.

Net bookings growth perspective, I know you've mentioned.

The frequency as well.

Well, if content and seasonal conflict and whatnot.

But would love to hear.

Any color on player demographics or cohort analysis to help us get a sense of some of the trends here. Thanks.

Hey. Thanks for the question. As you can see from the Q3 results. A terrific quarter and King achieved its highest revenue quarter since the acquisition. So let me focus on that and our performance specifically, there are a number of initiatives.

As you can see from the Q3 results.

Terrific quarter.

<unk> achieved its highest.

Revenue quarter since the acquisition. So let me focus in on that and our performance specifically there are a number of initiatives.

That have really been contributing to the success over the recent quarters and will carry us into the future.

We've increased our you know the optimizations that we put in the game. So we think about this as the only player journey.

And we've continued to improve that plan journey with strong life op execution this benefit.

Across cohorts of players, so we deliver compelling content and events more frequently across.

Or was that all key titles. So to give you. An example, and candy we've increased that engagement.

Further developing the content slate into monthly seasonal event that really drawing in new and existing players and provide fund expense across the board.

This quarter, we've complemented that with the launch of the Candy All-stars competition in the US. And we've seen some very strong initial results across reach engagement and player investment. We feel we also found the successful formula over the past 12 months to invest and grow and live ops. And we're now applying that with great results, not just in Canada, but across other games two. So our second biggest franchise for example Farm Heroes.

And we've seen some very strong initial results across reach engagement and player investment.

We feel we also find that successful formula over the past 12 months to invest and grow and live ops.

And we're now applying that.

Great results, not just in Canada, but across other games two seconds.

Second biggest franchise for example farm heroes.

Over the past few quarters, we've been delivering that content.

Content cadence.

And great events and farm season pass and we've seen the results from that as well or in App growth and farm heroes.

Has it been up 20% yesterday and as a result.

With that we've continued to reinvest into the network and in our brands as well. So we've seen that our payer numbers have grown double digit percentage year on year.

Versus the year ago quarter.

And this is again down to the strong execution that we have in our teams around user acquisition and when you combine with the features and events that are happening in the game. It's really an amplification of all these great trends that we're seeing.

So that's also allowed us to maximize our success and more marketing investment and continuing to broaden our planting.

So overall I feel like we've demonstrated that ability to grow both revenue and operating income at the same time, we feel there's still quite a bit of runway ahead of us.

And alright. Thank.

Thank you. Thank you for the question this is Daniel.

First I'd, just a shout out to mom and the King team for what they've they've achieved it really has just been an exceptional performance and journey and just from an Activision Blizzard King perspective, there are a lot of learnings that we really want to apply across both app.

Division and Blizzard.

And it's not just in mobile from from the King teams operations for instance, Kings live operation capabilities there.

<unk> analytical approach to creating amazing experiences.

That truly engage with the players and the disciplined data driven approach to marketing is just very applicable across the rest of the business. So we're already making sure that these performance marketing learnings are being applied to our work on call of duty mobile and two Diablo immortal and other mobile Ines.

<unk> that will be coming in the not too distant future across the company.

Similar to how we are looking to apply the call of duty framework to our other franchises. It's another example of how Activision Blizzard is really leveraging the best of each of our businesses to truly maximize the potential of our portfolio.

Thanks again for the question.

Operator can I have the next question please.

The next question comes from Alexia <unk> of Jpmorgan. Please go ahead.

Hi. Thank you. My question is really about at the call of duty can you discuss sort of a high level of activation will integrate vanguard into wears out and what you know now its content modern warfare and Black Ops called War and then can you remind US you know how the launch is he didn't want a black ops in mid December last year impacted the pacing of unit.

Relative to prior years.

Yeah, Alexia, it's Rob I'll take this question.

To start we're obviously excited about both the launch of Vanguard. This week and also where zones new Pacific map called caldera, which is releasing early in December the new map represents really the first built from the ground up new experience for where zone since the launch of whereas the one basically in March of 2020. So we think the community is going to be real.

Excited to get into play that an experienced entire vanguard universe coming with that of course, there are a lot of things assemblage, where mentioned I'll just briefly cover them one of which was we're going to share the same tech as vanguard and so what does that mean this is the same <unk> debuted with modern warfare and so from a player perspective, you can get a lot more seamless weapon and play balance.

Across both experiences.

And what has become a staple for US now is really a game that's fully optimize your cross play and cross progression and cross Gen support we've seen that the last couple of years and that carries forward.

Importantly for our community. We're also gonna be launching ricochet at your new anti cheat system across Vanguard and war zone. So that our players kind of the best possible experience as we move forward here in the future now specifically as to the integration.

We're going to continue to have the shared progression across Vanguard, where zone just like we had to go against modern warfare and Black Ops Cold War previously so all the great weapons operators unlocks and everything that you get on the Vanguard premium experience will also be usable in war zones. So how did you work together is absolutely intact and better than ever.

Now Pat and storefront and stored content of course will also go back and forth for players to use and have fun with now.

Now there is a new component for us here in the new where is it what experience is going to offer some new dedicated platelets that are very specific to the vanguard theme that we think it can be really fun for the community and of course to honor. The player's investment will also have unique play lists that are more of a combined arms that'll relax battle Royale experience.

Would you slow down to draw modern warfare, black ops or vanguard, So I think that'll be really fun for the community to choose how they want to experience the new map into new content.

And also I think what's become a stable for us as we move forward. Our players can expect a ton of free post launch content and updates from Vanguard and from war zone to keep them, having fun for the long haul. So both games are really just going to get bigger and better as they evolve over time for the community.

Now going back to your question on.

The impact of Black off last December so we certainly saw an uptick last December and I believe we talked about that in the previous earnings call and similarly, we expect another uptick this fourth quarter for our premium sales as we go through that cycle launch the new map and see how the community engages more broadly both within <unk> and within.

Our premium experience. Thank you Alexia for the question.

Thanks, Alexia operator can we have the next question. Please.

The next question comes from Canal Mal de of Atlantic Equities. Please go ahead.

Hi, Thanks. So I was just wondering if you could talk about the performance of Diablo to resurrect it and what it sort of informs you about the opportunity for the Diablo franchise and a girl.

Hey, Karl Thanks for the question. This is Mike again, you know the reception of Diablo to resurrect it hasnt been great.

Daniel mentioned first week sales were the highest recorded for our remaster from Activision Blizzard as a whole.

This alongside the continued engagement with Diablo III really is confirmation that our plan for the Diablo franchise as a whole is the right one.

Huge appetite from our player community for more content from those dark Gothic universe, and it's our job to exceed player expectations downwards resurrected as an early step towards meeting. This demand we have ignited a soldier in players who experienced the original way back in 2000 as well as brought all new players.

The fault Diablo immortal being in its next stage of testing is incredibly exciting and will give players another window into the world of sanctuary there'll be able to take part in an all new narrative and a persistent free to play social experience all from their mobile devices.

Immortal provides an even easier entry point for players into a game broader in scope and scale than Diablo III.

Then Jill before which will be the darkest expression of the universe, yet as an immersive world players can dive into together on PC and console. This is one of the most highly anticipated games in the industry and we are confident there. We're building something incredible these experiences combined create an ecosystem where players of all types can be.

At home and it doesn't stop there Diablo will always be living and breathing with broad content updates over time to continue to delight. Our players seem the first step of this plan executed with the release of Diablo to resurrect it off to such a strong start is invigorating to the teams across Blizzard and we can't wait to get more into the hands of.

Players thanks for the question.

Thanks, Kunal operator can we have the next question. Please.

The next question comes from Mario Lu of Barclays. Please go ahead.

Great I have a follow up on king with respect to IV S. A.

You reported a very strong quarter.

By being the first full quarter of the IBSA changes on iOS.

Just curious if there was anything to call out in terms of its impact that you saw to candy crush or your other mobile titles.

Yeah. Thanks, Brian Yeah. This is her mom again look we're still early on in the journey with idea, but so far.

We're seeing that create opportunities for us on the user acquisition side and as you would have seen on the advertising side.

We are continuing to grow quite robustly.

On the user acquisition.

Good.

We have a very large and sophisticated user acquisition team and they've been really hands on and granular when they run our campaign.

So when you've seen these changes and dynamism in the industry because if I did I think they've created market opportunities that we've been able to capitalize on.

And the tailwind that we are seeing in our conversion and spending gives us a lot of flexibility to invest and he's a ROI positive.

You know opportunities.

So much of our UA is aimed at twin back until over 1 billion people, we didn't even have downloaded candy in the past and so this gives us also a.

Great brand advantage.

Now on the advertising side of the house.

We've seen a 60% year on year growth, which points to our ongoing strengths. We believe we have a very differentiated product there.

<unk> premium positioned with advertisers and we're still learning and building on that business.

Hello.

We continue to focus on ramping up these relationships are with demand partners with continued positive momentum for both new demand partners and all existing one. So overall, we're seeing a lot of opportunity in both volume and pricing in that business as well.

Thanks for the question.

Operator next question please.

The next question comes from Matthew cost of Morgan Stanley. Please go ahead.

Hi, Thanks for taking the question I was wondering how youre thinking about the durability of call of duty from here as well as the kind of innovation in content pipeline, we should expect over time going forward. Thanks.

Hey, Matt it's Rob.

Look on your question I guess I'll start with just saying in short I don't think we've ever well I know, we've never felt better about the future of the call of duty ecosystem as we look forward.

Today, the strategy that we've employed which include a cautionary expansion into free to play with where zone in call of duty mobile.

Continued pushing to deliver incredible new premium experiences and how the overall ecosystem is really connected and works together is actually just the beginning of what our plans until long term looking ahead, we see significant opportunities across gameplay expansion platform expansion and geographic expansion to take this ecosystem to an entirely.

New lab level for our players around the world.

I would say put it another way we feel there's more opportunity in front of the franchise at any point in our history and that's a pretty incredible thing to be able to say given the success that we've seen today.

Of course, the next phase begins in the coming days and weeks with Vanguard and the new map caldera and war zone, but really there is so much more as we look ahead in the future both near and long term.

Driving this ambition for us of course is our talented development teams and the resources, we have there, which we're committed to greatly expanding both at our existing studios, but also geographically to find new talent around the globe. So we're expanding in locations like Austin, Guilford, Krakow, Melbourne, Mexico City, and Toronto to augment our teams.

And you May already know, we recently acquired digital legends.

Barcelona, they join our mobile development roster, which now includes our new internal team solid state as well as the mobile teams at <unk>, and Shanghai, where all coming together on an unannounced project and the call of duty universe that that's very exciting.

Overall, we feel really good about our plans our outlook our team and our gameplay innovation as we look out over the next few years and beyond thank you.

Yeah.

Thanks, Matt Operator next question please.

The next question comes from Andrew <unk> of Jefferies. Please go ahead.

Great. Thank you guys.

Your your stock's at I think a five year low as far as valuation goes.

Sitting on a ton of cash you you say your couldnt be more excited about the pipeline a.

Why not do a stock buyback at this point or could you talk about capital allocation and kind of M&A at this point. Thanks.

Andrew This is amin thanks for the question.

On your question on capital location as you know, we do have a strong track record of being <unk>.

We allocated capital.

All the areas that you mentioned investing in our business.

Returning capital to shareholders by buybacks and dividend.

Strategic M&A starting.

Starting with investing in our own business.

You've heard today, we continue to have a band based on the pipeline.

Investing in our business.

And in all development teams remains our key priority and as Dennis mentioned, we will continue to look to accelerate organic hiring in this area with Nokia hiring just thoughts now.

Legend.

Last week, but these type of transactions are typically smaller in nature.

With regards to larger M&A, yes, we are all of our low cost philosophy established franchises that have potential for Goldman scale Angela.

And with strong management teams with a track records of profitability and of course <unk> practical innovation that meets our return thresholds now as you know we have been very disciplined and patient in this area.

The longer term opportunity for M&A means that it made significant option value on having a strong and flexible balance sheet.

At the same time with respect to buybacks to come to the coffee question, we do have a $4 billion authorization and while you Havent see us do.

Anything in a long time, we do evaluate our position with respect to buybacks frequently now obviously the increase in cash generation from the company gives us more flexibility over time, but bear in mind, though that we don't and mountains. We've been buying back stock ahead of time, and sometimes that may be restrictions on our ability to come into buybacks.

In summary.

Spect us to be continue to be balanced and disciplined in how we allocate capital always with a view to long term shareholder value creation. Thank you for your question.

Thanks, Andrew operator can we have one last question. Please.

Our next question comes from Mike Nick of Goldman Sachs. Please go ahead, hey.

Good afternoon, and thank you very much for the question.

Upon the increased competition for developer talent and the Ah.

Higher voluntarily voluntary turnover I was just wondering if you could talk a little bit in more detail about Activision blizzard efforts to attract and retain talent, whether that's moving more towards a distributed workforce or being more aggressive in hiring.

Great. Thanks, Thanks for the question.

So I guess I'll take the last question.

This is obviously something extraordinarily important and we're putting a tremendous amount of effort into and we've made some very substantial progress in this area.

Particularly over the last year.

Retaining and attracting top talent as Bobby mentioned is critical to us being able to meet the needs of our players of our communities and of our growing our business and this is theres really nothing more important to the company than our talent.

It really starts with making sure that our existing teams have the best <unk>.

Possibly working environment.

An imperative and that's and it's also setting a setting that fosters creative excellence and importantly, fantastic career opportunities where people are willing to invest their their time and their careers at our company.

You've heard from US today some of the measures that we're taking to ensure that and and we will continue to make significant progress.

And when it comes to hiring.

We're really fortunate that many individuals want to work on our franchises for which they have just tremendous affinity.

Play that for a very long time oftentimes they were little.

And we can offer that with some of the biggest franchises in the world.

We also have the financial scale that enables us to compete for that talent.

But I know, that's not enough and especially with many people's attitudes to where and how they want to work changing during the pandemic, we have to keep that in mind.

And we are giving our teams the flexibility they need.

And we have also been investing in studios as Rob mentioned in many locations that are new for us, including Krakow, Melbourne, Toronto and in Mexico City, where I'm from.

We've had a lot of success in hiring in recent months in those franchises that were earliest and embracing this to your geographic expansion and flexibility, particularly for call of duty and for Candy crush and we've already started to pursue that same approach for blizzard and Blizzard franchises and Mike. He is completely on board with us as we can.

To invest and grow our teams.

Multiple locations.

Thank you for the question.

Well. Thank you everybody for your questions and your interest and participation. We hope we see you. All later this week in the game during the call. The theaters on this thank you very much again.

The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.

Q3 2021 Activision Blizzard Inc Earnings Call

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