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$ATVI stated that 2017 represents a new type of pipeline for the company that's not necessarily based on full game launches, but on delivering new content updates for its games. The company also said that in 1Q17, it had meaningful new content for every franchise in its portfolio.
$ATVI said Destiny 2 is off to a strong start. "After the PC launch, it is now ahead of Destiny 1 on total consumer spend, time spent per player, attach rate to the expansion packs and average revenue per user. Destiny 2 also achieved a new high watermark in digital full game downloads at over 50% of console sell-through," the company said.
$ATVI expects net revenue of $6.675Bil in FY17 and $1.7Bil in 4Q17. The maker of Call of Duty sees GAAP EPS of $1.22 and non-GAAP EPS of $2.08 in FY17. Meanwhile, for 4Q17, the company anticipates GAAP EPS of $0.10 per share and non-GAAP EPS of $0.36 per share.
$ATVI reported 3% growth in 3Q17 net revenue to $1.62Bil, excluding impact of GAAP deferrals of $284MM. However, net income was down to $188MM, or $0.25 per share, compared to $199MM, or $0.26 per share in the year-over period. Excluding impact of GAAP deferrals of $0.13, adjusted net income stood at $0.47 per share.
$ATVI stated that in live games, it has focused on increasing the audience engagement through fresh content, new features and live operations. This has seen good results with high DAU and MAU ratio as well as retention of the most engaged players. It has also resulted in a continued increase of player monetization.
$ATVI has two major releases in 2H17. The company will launch Destiny 2 on console on September 6 with the PC launch to follow on October 24. $ATVI will continue the marketing ramp for the November 3 release of Call of Duty: World War II. Blizzard is launching a remastered version of the original StarCraft on August 14.
$ATVI released new updates across many leading franchises in 2Q17, driving engagement and delivering nearly $0.5Bil of segment operating income. Strong engagement and player investment drove mobile bookings up YoY and QoQ. King is building its advertising business and has partnered with Facebook Audience Network for its static display ad inventory.
During 2Q17, $ATVI reported revenue declines in all three of its segments. Activision segment revenues dropped 5% compared to 2Q16. The Blizzard segment reported a 24% decrease in revenues while the King segment reported a 1% revenue drop versus the prior-year quarter.
$ATVI had 407MM Monthly Active Users (MAUs) in 2Q17. Blizzard saw a 38% increase in MAUs YoY. Overwatch and Hearthstone both saw growth in MAUs. Activision saw a slight decrease in MAUs YoY. King reported a decline in MAUs YoY but saw better gross bookings per paying user.
$ATVI announced pricing of 3 series of senior unsecured notes in an agg principal amount of $1.2Bil, in a public underwritten offering. ATVI intends to use the net proceeds of approximately $1.18Bil from the offering, together with cash on hand, to permanently prepay $1.2Bil principal amount outstanding under its term loan "A" facility.
$ATVI announced its intention to offer, in a public underwritten transaction, senior unsecured notes in three series. Key terms of the offering will be determined at the time of pricing. Activision Blizzard intends to use net proceeds, together with cash on hand, to prepay $1.2Bil principal amount outstanding under its term loan "A" facility.
$ATVI said that regarding the roll out of advertising to the King user base, it is still in beta. Additionally, the company added that in 1Q17 it has been doing further testing and have built the internal capabilities and the team. Currently $ATVI is testing in seven titles, including Candy, Candy Soda and Farm Heroes.