ATVI
#Thank you, Bobby
We're off to a very strong start this year
We delivered record Q1 revenues of $1.7 billion and record digital revenues of $1.4 billion
We grew year-over-year, over-performed our guidance for the quarter, and are raising our guidance for the full year
Our results continue to be driven by focus and execution against our three strategic pillars
First, expanding our audiences, second deepening engagement, and third providing more opportunities for player investment
Let's start with audience reach, which was 431 million monthly active users this quarter
Blizzard had 41 million MAUs for the quarter, up 58% versus last year and relatively stable versus the prior quarter, despite no new full-game releases
Blizzard's fastest growing new IP ever, Overwatch, continues to grow from an MAU perspective, setting another high water mark this quarter
In less than a year since launch, Overwatch has 30 million registered players and has become Activision's eighth $1 billion franchise
Hearthstone continues to attract new players as well, reaching 70 million registered players life-to-date
MAUs also grew year-over-year and quarter-over-quarter despite no new content in Q1. Activision had 48 million MAUs for the quarter, down year-over-year due to weakness in last holiday's Infinite Warfare release as discussed on our Q4 call
However, Call of Duty continues to have a large and active community of players across Infinite Warfare, Modern Warfare Remastered and Black Ops III
And we expect the community to grow with the next game in the series, Call of Duty: World War II, releasing November 3. When Activision greenlit this game more than 2.5 years ago, the team knew it was time to return the franchise to its roots, and fans are already sharing their excitement for Call of Duty: World War II
Activision revealed the game at a global live stream from London last week, which became the most watched live stream in Call of Duty history, and the reveal trailer has gone on to become the most liked trailer in Call of Duty history, and became the fastest video to reach 10 million views in Call of Duty history, which it did in one day
Additionally, though it's still very early, pre-orders are off to a very strong start
Call of Duty: World War II will deliver the gritty authentic cinematic experience, which Call of Duty is known for
Activision along with its partners at Bungie also recently revealed the much anticipated Destiny 2, which is set for release on September 8. Destiny was the biggest new video game franchise launch of all time when it was released, and early leading indicators including pre-orders for Destiny 2 are very strong as well
The team is taking great care in designing the game to appeal to existing and new fans, including PC players for the first time
Activision is also localizing the game for more markets, which should enable us to reach new audiences
And at launch, we're offering an expansion pass for Destiny 2, containing two future expansions, along with a continuous calendar of other events
Encouragingly, the SKUs that contain the expansion pass have attracted the majority of pre-orders so far
We believe the combination of a great game, the new opportunity to reach PC players, and a robust content plan post-launch highlight the opportunity ahead
We look forward to sharing more about both Destiny 2 and Call of Duty: World War II in the months ahead
Turning to our next strategic pillar, our compelling games, deep gameplay and consistent follow-on content drove not only large communities, but also deep engagement with about 40 billion hours of gameplay over the past 12 months
Blizzard continues to see strong engagement from its players with time spent increasing by a double digit percentage year-over-year to a new Q1 record
Overwatch again had strong engagement this quarter thanks in part to the Lunar New Year event, which like the three seasonal events before it, drove record engagement in the game
Overwatch's latest seasonal event released on April 11. This event named Uprising included a player versus environment game mode, which drew record hours of player engagement, demonstrating that Overwatch can appeal to players beyond player versus player competition
In April, Blizzard also launched Heroes of the Storm 2.0, with a more powerful progression system, reward pack loot chests, and new battleground, and more compelling heroes, all of which brought players back into the game
Blizzard's strategy to release content and feature updates more regularly in World of Warcraft has been paying off with time spent up year-over-year, and with overall performance ahead of the prior expansion
At the end of the quarter, Blizzard released the game's second major patch since Legion came out with more content to come later this year
To round out the terrific performance of Blizzard's games, Hearthstone set a new all-time record in daily active users in April with the release of the new expansion, Journey to Un'goro
King's MAUs were down slightly versus prior quarter, but community engagement trends continue to set new highs with an increase in total playtime versus prior quarter
Time spent by daily active user is now a record 35 minutes
King also had the highest DAU to MAU ratio since 2013, with stability in DAUs versus the prior quarter
This performance shows that King's focus on live ops and new content for core franchises continues to keep our large and loyal audience engaged
And this bodes well for King's biggest growth opportunity, advertising
Esports is an important and growing engagement driver for our community, and there were many highlights this quarter
Activision held Call of Duty World League events in Atlanta, Dallas, London, Paris, and Sydney, and Blizzard kicked off the StarCraft II World Championship Series, Hearthstone Championship Tour, and Heroes of the Storm Global Championship with major international events, along with the third Heroes of the Dorm college tournament in Las Vegas
In addition, the Overwatch APEX League completed its second season in Korea and this year's Overwatch World Cup was announced as part of a busy year of Overwatch esports, as Blizzard gears up for the Overwatch League
And we have more to come down the road, including the recently announced CWL Championship
This is Call of Duty's biggest competitive event of the year, and will be held in August in Orlando with 32 teams from around the world competing for a prize pool of $1.5 million as part of the largest CWL season long prize pool to-date of $4 million
Turning next to the third pillar of our strategy, providing opportunities for more player investment
Blizzard saw an increase in total in-game purchases by almost 30% year-over-year, primarily driven by Overwatch and World of Warcraft, highlighting once again the virtuous cycle of engagement leading to more player investment, all of which starts with great new content
Later this month, Activision's Call of Duty: Black Ops III fans will be getting a new content offering called Zombies Chronicles, a remastered collection of the franchise's most beloved zombies content
This is our most significant new content update yet in the second year following a Call of Duty release as we now have better player engagement opportunities than we've ever had with our catalog games
King not only increased engagement, but also increased player investment this quarter
Bookings per paying user rose for the 7th quarter in a row to a new record
King continues to have two of the top ten grossing games in the U.S
for the 14th quarter in a row, and importantly the Candy Crush franchise showed continued stability with mobile bookings growing versus prior quarter
King has a number of projects in development, including a promising new publishing partnership with PlayStudios in the social casino segment, slated for later this year
This is an attractive mobile gaming genre and will allow us to provide great content for our existing player base, as well as attract new players to the King network
As we discussed last quarter, we also have a number of mobile incubation projects underway across the company, many of which are based on our proven IP
Since King became part of the Activision Blizzard family last year, we've been looking at ways to work together to create even more great gaming experiences for our large player network
Last month, we announced that King and Activision are partnering on the creation of a Call of Duty mobile game, and we're excited about the potential of bringing these two great teams together
In summary, we are off to a terrific start in 2017, with continued success keeping our large audiences engaged across a growing portfolio and on a variety of platforms
We are also pleased with the early momentum we are seeing for Destiny 2 and Call of Duty: World War II and the continued progress on new growth opportunities, like advertising, esports and consumer products
We are excited about our prospects and stay tuned for further updates in the weeks and months ahead
<UNK> will now review the numbers in more detail
