AB(US:ATVI)2020-08-05 01:56Financial Data and Key Metrics Changes - The company reported Q2 GAAP revenues of $1.93 billion, exceeding guidance by $242 million, with net bookings of $2.08 billion, $403 million above prior outlook [29] - Q2 GAAP EPS was $0.75, with non-GAAP EPS at $0.81, which was $0.17 above guidance [29] - Operating cash flow for Q2 was $768 million, increasing over $600 million year-over-year [30] Business Line Data and Key Metrics Changes - Activision revenue reached $993 million, a 270% year-over-year increase, driven by Modern Warfare and Warzone in-game revenues [27] - Blizzard revenue was $461 million, growing 20% year-over-year, primarily due to World of Warcraft [28] - King revenue was $553 million, the highest since the 2016 acquisition, growing 11% year-over-year [28] Market Data and Key Metrics Changes - The player base grew 30% year-over-year, adding over 100 million monthly active players [10] - Time spent in games increased by 70% year-over-year, with Q2 engagement and player investment at historic highs [10] - In-game net bookings grew 77% year-over-year to a record $1.37 billion [28] Company Strategy and Development Direction - The company is focused on expanding audience reach, deepening engagement, and increasing player investment [16] - Investments in creative talent and development teams are aimed at delivering high-quality content more frequently [13] - The company plans to leverage the success of Call of Duty to drive growth across its other franchises [69] Management's Comments on Operating Environment and Future Outlook - Management noted that the ongoing pandemic has accelerated trends in digital downloads and user engagement [40] - The company expects to continue benefiting from the social nature of its games, with a focus on retaining new players [41] - Despite uncertainties in the economic outlook, the company raised its full-year outlook for net bookings, revenue, and EPS [34] Other Important Information - The company has a strong balance sheet with cash and investments of approximately $6.5 billion and a net cash position of about $3.8 billion [30] - The company plans to launch major new content for key franchises in the second half of the year, including new titles for Call of Duty and World of Warcraft [32] Q&A Session Summary Question: How does COVID-19 act as an accelerant against industry trends? - Management believes COVID-19 has accelerated existing trends in gaming, leading to increased player numbers and engagement [40][41] Question: What are the marketing plans for Call of Duty this year? - The marketing strategy will leverage the larger, more engaged audience created by Warzone, allowing for more direct and targeted marketing [46][47] Question: How are development teams adapting to remote work? - Teams have adapted well to remote work, continuing to deliver content and maintain momentum for upcoming releases [53] Question: What trends have been seen in the advertising business? - The advertising business showed robust year-over-year growth, with ongoing investments in tech infrastructure and direct sales [58][60] Question: What is the sustainability of Call of Duty Mobile's performance? - Management is optimistic about the sustainability of Call of Duty Mobile's performance, with ongoing investments in content and marketing [62] Question: How can learnings from Call of Duty be applied to other franchises? - The integration of experiences across platforms and the success of free-to-play models are seen as applicable strategies for other franchises [67][69]