Activision Blizzard Inc ATVI
Q2 2011 Earnings Call Transcript

Transcript Call Date 08/03/2011

Moving onto StarCraft II, back in May we invited press from around the globe to get a first look at the upcoming expansion pack Heart of the Swarm. We showcased the couple of levels from the games campaign and we've seen a lot of positive feedback and coverage about the sneak peak. We look forward to sharing more information and news about Heart of the Swarm at the upcoming Gamescom later this month, as well as at BlizzCon in October. We also just released the Starter Edition of StarCraft II this week. The Starter Edition lets players play through a portion of the single-player campaign and they can also play unlimited multiplayer battles as the Terran race on a few different maps for free. Our hope is that the Starter Edition will encourage more gamers to tryout StarCraft II and they’ll eventually upgrade to the full edition.

On the World of Warcraft side, we experienced a slight decrease in subscribership during Q2, closing the quarter at 11.1 million subscribers worldwide. Since that time, we launched Cataclysm in China and have seen an increase in concurrency within the region. We’re very excited to have delivered the latest expansion to Chinese players, and we look forward to working with our local partner NetEase to continue improving the rate at which we are able to release new content to our players there. In addition to the China launch, we also just announced that we will be releasing a Portuguese version of World of Warcraft in Brazil later this year.

Aside from promoting World of Warcraft in other regions, we're taking other steps to bring more players into the community. With the new World of Warcraft's Starter Edition, players are now able to play the game for free until level 20 with no time restrictions. Since the launch of this program, we've seen a significant increase in new account creations, which we hope will allow us to continue attracting new players.

The World of Warcraft development team is also working on the next content update, which will include major new raid and dungeon content. We believe that this new end game content will keep the game fresh for current players and provide compelling reasons for laps players to come back.

Before moving on to Diablo III, I want to thank our World of Warcraft community for their warm response to our recent charity pet, Cenarion Hatchling. We pledge that Blizzard would donate 100% of the proceeds from sales of this pet through July 31st to help Japan relief efforts. Through this initiative and a generosity of our players, Blizzard will donate more than $1.9 million to support ongoing earthquake and tsunami relief in Japan.

Many of you are already aware of the big news that we recently shared about Diablo III. Alongside the gold-based auction house, we will include an auction house within Diablo III that will allow players to trade items using real money. This auction house will be a secure and safe environment for players to trade their items (indiscernible). In the previous game, Diablo II, we did not offer such a feature which resulted in many players turning to unscrupulous third-party services to purchases items. We felt that because players clearly wanted such a feature, it made sense for us to build it in Diablo III, so they could trade in a more convenient and secured manner than going through an unauthorized third party.

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