Activision Blizzard (ATVID) June 2008 Quarter Earnings Notes
-Activision stand-alone revenue $654.2M, 32% y/y. EPS of 23c non-GAAP. Vivendi Games 223 million euros and 42 million euros in EBITA
-World of Warcraft is at 10.9 million players
-Blizzard pipeline includes World of Warcraft: Wrath of the Lich King, Starcraft II, and Diablo II
-September 2008 guidance: $620M non-GAAP. non-GAAP EPS 8c
-December 2008 guidance: $2.3B non-GAAP. non-GAAP EPS 64c
-$1.34B in cash, $24M debt
-Combined company has $3B in cash
-Key products: Call of Duty, Guitar Hero III, Kung Fu Panda, Guitar Hero on Tour, Guitar Hero Aerosmith
-Pre-sales for Guitar Hero World Tour are up 30% vs. Guitar Hero 3
-Holiday releases: Call of Duty World at War, James Bond Quantum of Solace (uses COD4 engine), Madagascar 2, Escape to Africa, Spider-Man Web of Shadows, Crash Bandicoot, Mind over Mutant, and The Legend of Spyro: Daw of the Dragon
-CY2009: multiple new Guitar Hero SKUs, new Call of Duty, reinvented Tony Hawk, Marvel Ultimate Alliance 2, Marvel’s Wolverine, Transformers 2, Monsters vs. Aliens, Ice Age
-Wrath of Lich King is in beta. The last expansion pack sold 2.4M in the first 24 hours and 3.5M in its first month. Team of over 100 developers.
-40% of people that left to try Age of Conan have come back
-See at least another year of 20%+ growth
-No launch date for Lich King, it will NOT be in the September quarter
-Expect $40-50M in revenue from downloadable content
-Going to learn from managing 50,000 servers, customer support, etc. from WOW for the future of Guitar Hero and Call of Duty franchises
-The Guitar Hero acquisition continues to pay enormous dividends with the release of Aerosmith and On Tour for the DS. Infinity War’s Call of Duty 4 was another grand slam home-run.
-Key questions are will the new Guitar “Rockband-like” Hero World Tour do as well this holiday vs. Rockband 2? And what will the growth profile of World of Warcraft be in the coming year?
-Inference to learning from World of Warcraft for the future of Call of Duty and Guitar Hero franchises. Does that mean we’ll see a COD and GH MMO in the future?