Chris Evenden - Electronic Arts, Inc. Andrew P. Wilson - Electronic Arts, Inc. Blake J. Jorgensen - Electronic Arts, Inc.

Christopher David Merwin - Barclays Capital, Inc. Brian Nowak - Morgan Stanley & Co. LLC Justin Post - Bank of America Merrill Lynch Stephen Ju - Credit Suisse Securities (USA) LLC (Broker) Brian P. Fitzgerald - Jefferies LLC Colin Alan Sebastian - Robert W. Baird & Co., Inc. (Broker) Eric J. Sheridan - UBS Securities LLC Michael J. Olson - Piper Jaffray & Co. Benjamin Schachter - Macquarie Capital (USA), Inc. San Q. Phan - Mizuho Securities USA, Inc. Eric O. Handler - MKM Partners LLC Michael Hickey - The Benchmark Co. LLC

Good afternoon. My name is Jennifer, and I will be your conference operator today. At this time, I would like to welcome everyone to the Electronic Arts second quarter 2017 earnings call. All lines been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. And I would like to turn the call over to Chris Evenden, Vice President of Investor Relations. Sir, you may begin. Chris Evenden - Electronic Arts, Inc.: Thank you, Jennifer. Welcome to EA's second quarter fiscal 2017 earnings call. With me on the call today are Andrew Wilson, our CEO, and Blake Jorgensen, our CFO. Please note that our SEC filings and our earnings release are available at ir.ea.com. In addition, we have posted earnings sides to accompany our prepared remarks. Lastly, after the call we will post our prepared remarks, an audio replay of this call, our financial model, and a transcript. We have a few events coming up. Blake will be speaking at the UBS conference in San Francisco on Tuesday, November 15. Peter Moore will be speaking at the Credit Suisse conference in Phoenix on Tuesday, November 29. Blake will also be at the NASDAQ conference in London on Wednesday, November 30, and back in San Francisco for the Barclays conference on Wednesday, December 7. Finally, our Q3 earnings call is scheduled for Tuesday, January 31, 2017. This presentation and our comments include forward-looking statements regarding future events and the future financial performance of the company. Actual events and results may differ materially from our expectations. We refer you to our most recent Form 10-Q for a discussion of risks that could cause actual results to differ materially from those discussed today. Electronic Arts makes these statements as of today, November 1, 2016, and disclaims any duty to update them. During this call, the financial metrics with the exception of free cash flow will be presented on a GAAP basis. All comparisons made in the course of this call are against the same period in the prior year unless otherwise stated. Now I'll turn the call over to Andrew. Andrew P. Wilson - Electronic Arts, Inc.: Thanks, Chris. Electronic Arts delivered excellent results for the second quarter of fiscal 2017, powered by a slate of the most advanced and innovative new EA SPORTS titles that we have ever delivered. We're thrilled with the quality and player excitement for the new games we launched in Q2 and even more excited for the exceptional titles we launched in Q3. As a result, we're raising our full-year guidance for FY 2017. More than 43 million players engaged in our breakthrough EA SPORTS games across consoles and mobile devices during Q2. On console, FIFA 17 has given soccer fans around the world a revolutionary new experience, powered by our Frostbite engine. We introduced The Journey, FIFA's first-ever story mode, which helped bring 20% more players into FIFA 17 in the first week over last year's game. To date, nearly 2/3 of all FIFA 17 players, spanning 183 countries, have engaged in this critically acclaimed new addition to the game. The FIFA Ultimate Team [FUT] experience is more robust than ever in FIFA 17, and engagement continues to grow through new modes and global competition. Players in the FUT Champions mode are now competing to advance to our live tournament events, the FIFA 17 Ultimate Team Championship Series. Madden NFL 17 players spent more time in the game in Q2 than any previous Madden title in the last five years, logging 44 million gameplay hours during the quarter. Ultimate Team [MUT] also continues to grow in Madden NFL, with engaged players in MUT up nearly 20% year over year in Q2. Our Madden NFL competitive gaming season also kicked off in Q2 with the Madden Classic, the first of four EA Major live events in the Madden NFL Championship Series. 1.5 million fans played 5.8 million ranked games in the online qualifying rounds, and the top 16 players will compete for the Madden Classic championship in Los Angeles in early December. The holidays are always a great season for football, and we're looking forward to more passion and engagement from our Madden NFL community in the months ahead. EA SPORTS has been a leader in high-quality and immersive sports games across multiple platforms, and now we're delivering on that promise for mobile players as well. We now have top-performing mobile titles across three of our major sports franchises. Madden NFL Mobile continues to grow year over year in both unique players and sessions per day. NBA LIVE Mobile has brought in more players than Madden NFL Mobile did during its launch period. And FIFA Mobile hit number one in the App Store Free Games chart in 138 countries just after its early Q3 launch. Each of these experiences are long-term live services that will continue to grow and be tuned with the expanding player base in this high-growth genre. Strength in our mobile portfolio reaches across other key genres. Our action RPG, Star Wars: Galaxy of Heroes, continues to drive strong levels of engagement, with average gameplay per player holding at 2.5 hours per day in Q2, one of the highest totals we've seen in a mobile game. Our deep roster of live services on mobile, including The Sims FreePlay, SimCity BuildIt, and Real Racing 3 continue to deliver long-lasting entertainment. Mobile players today expect increasing levels of creativity, depth, and polish in the games they play, and as a result only a few titles will break out. With decades of rich experience building high-quality and immersive games, a portfolio of leading titles, and a strong pipeline of new projects, we are well positioned for this evolution in mobile. Throughout Q2, the energy around our two groundbreaking first-person shooter games, Battlefield 1 and Titanfall 2, continued to build in anticipation of their Q3 launches. Battlefield 1 has impressed at every turn. From the debut trailer to subsequent looks at gameplay, features, and single-player stories, our Battlefield 1 content has over 100 million video views on YouTube, a record level for any EA game. Community influencers shared hundreds of hours of gameplay captured from play sessions around the world, bringing the world of Battlefield 1 to life in unprecedented depth. DICE has redefined the shooter genre with Battlefield 1, which now stands as the most highly rated Battlefield game of this generation. Player engagement since launch on October 21 has been phenomenal. Battlefield 1's total player base for the first week was nearly double that of Battlefield 4. Respawn has cemented Titanfall's position as one of the most exciting new IPs in the industry, with the bold vision and exhilarating action of Titanfall 2. This is a game that feels incredibly fluid and fulfilling to play. Critics agree that Titanfall 2 is a fantastic game, with more than 40 top outlets from around the world rating it 90 and above in reviews. The thrill of multiplayer in Titanfall 2 has the community buzzing, and rave reviews are also coming for the campaign that adds purpose and depth to the experience. Titanfall 2 is being called one of the year's must-play titles, and we're excited to see more fans across the world getting their hands on this extraordinary game. Heading into the holiday season that will include updated consoles and more mobile devices, Electronic Arts is in an outstanding position. With Battlefield 1 and Titanfall 2, we now have two of the top-rated shooter games of this console generation engaging a broad audience of players. Our EA SPORTS titles are delivering excitement for fans with thrilling new gameplay, challenges in Ultimate Team, and dozens of new competitive gaming tournaments from the community level to the global stage. Our mobile portfolio has a game for every player, with Star Wars: Galaxy of Heroes, Plants vs. Zombies Heroes, and more. And we will also deliver our first virtual reality experiences this holiday with the Star Wars Battlefront Rogue One: X-wing VR Mission for PlayStation VR and Need for Speed No Limits on Daydream, Google's VR platform. We're looking forward to another strong quarter ahead. Now, I'll turn the call over to Blake. Blake J. Jorgensen - Electronic Arts, Inc.: Thanks, Andrew. Before I talk about the quarter, I'd like to describe the steps we are taking to improve transparency in our new GAAP-only reporting environment. As we mentioned on our Q1 earnings call, we are no longer reporting non-GAAP metrics, but will provide you with all the GAAP data you need to derive metrics comparable to our historical reported non-GAAP financials. In addition, to give more visibility into the performance of our business, we have decided to add a new operating performance metric, net sales. We define net sales as the net amount of products and services sold digitally or sold-in physically in the period. Historical net sales have been added to our downloadable model posted on our website. In addition, please reference the tables in our press release as we discuss GAAP results and the GAAP adjustments that may be applied to compare them with our historical non-GAAP results. I'll start by reporting our results on a GAAP basis, then use our new operational measure to discuss the dynamics of our business. We are very pleased with the strong second quarter, in particular the great reception for FIFA 17 and the strength of our mobile portfolio. EA's GAAP net revenue was $898 million, compared to $815 million last year. Net revenue was below our guidance by $17 million. However, the change in deferred net revenue was $40 million above our guidance at $200 million. If you wish to compare our current results to our historical non-GAAP revenue, you will need to add GAAP revenue of $898 million to the change in deferred net revenue of $200 million. Thus, although underlying sales were above our expectations, because GAAP revenue is subject to the sales timing within the quarter, a larger portion of the total sales were deferred into future quarters. The increase over last year's net revenue was primarily driven by the success of Star Wars Battlefront in Q3 fiscal 2016 compared to smaller launches in Q3 fiscal 2015. See the document we posted on our Investor Relations website on July 19 for details on how to compare these results to historically reported non-GAAP results. Our cost of revenue was $401 million, including acquisition-related expenses of $12 million and $1 million worth of stock-based compensation. Gross margin for the quarter was 55.3%, up 5.5 percentage points over last year. This reflects the strength of Star Wars Battlefront three quarters ago, in Q3 fiscal 2016. As I just mentioned, revenue deferred from Star Wars Battlefront drove higher GAAP revenues in Q2 fiscal 2017 compared to the revenue deferrals from smaller titles launched in Q3 fiscal 2015. However, the cost of revenues this Q2 and last year's Q2 were approximately the same, given that the respective launch slates were similar. Thus, GAAP gross margin was up year on year. Operating expenses were $546 million, up $21 million or 4% year on year, driven by increased investment in R&D, particularly in new franchises and in our new Player Network infrastructure. The $20 million improvement on guidance was driven by timing of marketing activity. The $546 million includes $47 million in stock-based compensation and $1 million in acquisition-related expenses. The resulting loss per share was $0.13, which is $0.04 better than our guidance due to lower costs. It is $0.32 better than last year. GAAP adjustments to derive a measure comparable to our historical non-GAAP EPS include: the $200 million change in deferred net revenue; $13 million acquisition-related expenses; $48 million of stock-based compensation attributable to operating expenses and the cost of revenue; and a management reporting tax rate of 21%. Note that given our GAAP result was a loss, our share count was 301 million shares, as GAAP requires us to exclude the estimated 13 million shares that might be issued in the future, such as the shares expected to be issued this quarter for the settlement of the warrants. Those shares would be included in the diluted share count had we reported a profit. Net cash generated by operating activities for the quarter was $109 million, up $100 million on last year. For the trailing twelve months it was $1.1 billion. With capital expenditures of $120 million, free cash flow was $1 billion in the same period. See our earnings slides for further cash flow information. During Q2, we settled the remaining $136 million of our convertible notes. As a reminder, the warrants issued with our convertible notes are still outstanding, and starting on October 17 began to exercise automatically over 60 trading days. We have posted a document on our website that explains the impact on our share count. The most important takeaway remains that our diluted share count already includes the potential dilution at the current share price. During the quarter, we also repurchased 1.6 million shares at a cost of $127 million, leaving $282 million in our two-year $1 billion buyback program we began in May 2015. The current rate of repurchases keeps us on track to complete the full $1 billion in that time. Our cash and short-term investments at the end of the quarter were $3.27 billion. Forty-three percent of this balance is held onshore. This is down from 48% last quarter, the difference driven primarily by the share repurchase and convertible notes settlement. Now I'd like to turn to the key drivers of our business this quarter. Net sales for the quarter were $1.1 billion better than our expectations. Sales were driven by successful sports launches and growth in mobile. As discussed on our last call, FIFA 17 launched only four days from the end of the quarter. So almost no digital sales, whether downloads or Ultimate Team, were captured in the quarter. FIFA 16 launched 11 days before the end of Q2 fiscal 2016, allowing a whole week of digital sales to be captured. Using the first four weeks of sales to make a true like-for-like comparison shows that FIFA sell-through is up 13% year on year, and this speaks to how The Journey story mode has grown the market for our biggest franchise. Digital net sales were $486 million, up $6 million on the year-ago quarter. The increase reflects strong growth in mobile and in digital downloads, offset by the FIFA timing I just mentioned. The long-term trend towards digital is clear in net sales for the last twelve months, which were $2.6 billion or 57% of the total. Looking at each of the components of this quarter's digital net sales in turn, extra content and freemium net sales were down nearly 12% year on year to $172 million, driven by the fact almost all of the first week of FIFA digital sales will be captured in Q3 of this year. Using the first four weeks of Ultimate Team sales for FIFA 17 and FIFA 16 reveals year-on-year growth of 23%, even in the face of ongoing currency headwinds. Mobile net sales were $138 million in the quarter, up 22% year on year, with growth led by Star Wars: Galaxy of Heroes. We launched NBA LIVE Mobile in July and FIFA Mobile after the quarter end, and early indications from both titles are promising. Net sales for full-game PC and console downloads were $93 million, up 4.5% over last year, and in line with our expectations. Subscriptions, advertising, and other digital purchases contributed $83 million to net sales, flat year on year. Strong growth in EA Access and Origin Access were offset by declining revenue from some older titles. Now turning to guidance, we are raising our full-year guidance to $4.775 billion in net revenue and a $150 million increase in deferred net revenue. We anticipate cost of revenue to be $1.387 billion, including $31 million of acquisition-related costs and $2 million of stock-based compensation. Operating expenses are expected to be $2.304 billion, including $198 million in stock-based compensation and $6 million in acquisition-related costs. This results in earnings per share of $2.69 for the year, also an increase from prior guidance. GAAP adjustments to derive a measure comparable to our historical non-GAAP EPS include: the $150 million change in deferred net revenue; $200 million of stock-based compensation attributable to operating expenses and cost of revenue; $37 million in acquisition-related costs; $2 million in debt-related expenses; and a reduction of 1 million shares from the convertible bond hedge. Regarding cash flow for the full fiscal year, we are reaffirming our operating cash flow guidance of approximately $1.3 billion. Our capital expense forecast remains approximately $110 million, resulting in a free cash flow forecast of $1.2 billion. We expect Q3 fiscal 2017 to be our biggest cash flow quarter ever. We anticipate net sales for the year to be approximately $4.925 billion. This reflects a modest increase in our expectations for the underlying business, primarily based on the early success of FIFA 17. We're delighted with the way players are reacting to Battlefield 1 and Titanfall 2. Both are reviewing very well, and we expect them to sell strongly for a long time. However, we're only a week into Battlefield and just a handful of days into Titanfall, so it's still too early to update sales forecasts for either. Guidance for the third quarter is for net revenue of $1.125 billion, including $910 million in deferred net revenue. We anticipate cost of revenue to be $532 million, including $3 million of acquisition-related expenses. Operating expenses are expected to be $652 million, including $50 million in stock-based compensation and $2 million in acquisition-related expenses. Excluding the effect of stock-based compensation, expenses are up year on year, chiefly driven by increased investment in new franchises and our Player Network. This results in a diluted loss per share of $0.17 for the quarter. GAAP adjustments to derive measures comparable to our historical non-GAAP EPS include: the $910 million change in deferred net revenue; $50 million of stock-based compensation attributed to operating expenses; and $5 million in acquisition-related expenses. We anticipate net sales for the quarter to be $2.035 billion. This is up 13% year on year, driven by the combination of Battlefield 1 and Titanfall 2. As you build models and make year-on-year comparisons, remember that the same timing issue that pushed FIFA digital sales into fiscal Q3 will also push some holiday sales into our fiscal Q4. In conclusion, with the new innovations in FIFA. we've increased the market size. In Battlefield 1 and Titanfall 2, we have two extremely high-quality games in place for the holiday season, and we're continuing to grow our portfolio of successful mobile titles. Together, we expect them to deliver a record holiday quarter. Now, I'll turn the call back to Andrew. Andrew P. Wilson - Electronic Arts, Inc.: Thanks, Blake. EA is leading across multiple growth vectors that are shaping our industry. The audience for high-quality games on HD consoles and PC continues to expand. We believe the new console options will add depth to the hardware cycle, grow the install base, and add to the player value proposition. The power of our Frostbite engine enables us to scale with platform capabilities to deliver the experiences our players want. From the groundbreaking gameplay in Battlefield 1 and FIFA 17, to Mass Effect: Andromeda in stunning 4K, to extraordinary new VR experiences from our labs teams across the spectrum of high-end and lower-end devices, we are pushing the boundaries in a multi-platform world. The evolution of mobile games is another growth vector, where the tenets of great mobile experiences and great HD games continue to converge and open new high-growth opportunities. In this increasingly competitive world, where the number of players and the number of games grows on a daily basis, players are looking to major brands as markers for quality. Their expectations for creativity, innovation, polish, and depth play directly to our strengths. Our EA SPORTS titles are strong demonstrations of social play blended with strategy and action that have proven to deeply engage mobile players over time. We will continue to infuse this same approach throughout our pipeline of new mobile experiences in development for the quarters ahead. Players today also have more ways to connect and engage with the games they love. Millions of fans are competing in our global Madden NFL 17 and FIFA 17 competitions, beginning with in-game qualifications and leaderboards that will ultimately feed championship events on a world stage. In-game competitions have kicked off for Madden Bowl, our second EA Major event for Madden. And season one of the FIFA 17 Ultimate Team Championship Series is underway, which will culminate with the FIFA Interactive World Cup in August 2017. Beyond competitive gaming, we're introducing new tools for our community to create content and share more of the amazing experiences they have in games like Battlefield 1. And building on the continued success of EA Access and Origin Access, we're exploring ways to provide subscription choices for more of our players. In an ever-changing world defined by more content, more devices, and an increasingly global player base, finding great games and connecting with friends becomes increasingly challenging. We are continuing to invest in our EA Player Network to reduce friction and improve discovery, purchase, and enjoyment across all of our games and player touchpoints. The player experience as you enter Battlefield 1 is a good example of how this is beginning to roll out, with a new consistent interface that brings players into their personal Battlefield universe with the games they own, content recommendations, and faster ways to squad up with their friends. The Player Network will grow and attract more players with these personalized services, in-game and out-of-game, that add value and improve the experience with every minute of play. We're energized to introduce our players to new experiences, new connections, and new ways to play. Now Blake and I are here for your questions.

And our first question comes from the line of Christopher Merwin with Barclays. Blake J. Jorgensen - Electronic Arts, Inc.: Hi, Chris. Christopher David Merwin - Barclays Capital, Inc.: Thank you. Hey, how's it going? Blake J. Jorgensen - Electronic Arts, Inc.: Good. Christopher David Merwin - Barclays Capital, Inc.: It looks like last quarter I think you talked about 9 million or 10 million units for Titanfall 2 and I think under 15 million for Battlefield 1. And just based on your disclosure that the player base for Battlefield nearly doubled from Battlefield 4, can you just talk about how, if at all, those expectations have changed in the context of your raised guidance? And then just a second question, I know it's still very early days here, but I'm just trying to get a sense of maybe how the digital download mix of Battlefield 1 is trending relative to Star Wars. I think you gave the long-term guidance of a 5-point mix shift annually in terms of the digital download mix, just curious how that's looking in the early stages so far. Thanks. Blake J. Jorgensen - Electronic Arts, Inc.: We're not planning on updating our unit guidance for any products, including those, but we're very optimistic about obviously both Battlefield 1 and Titanfall 2. We're just early in the holiday sales cycle. And while there's incredible excitement around both, we just don't want everyone to get ahead of themselves in the case of focusing on units forecast. But don't take that as a negative on either product. We're very excited about both of them and think there's a long opportunity, not just in the quarter, but for a good one to two years to come. I remind people we had quite a few players still playing Battlefield 4 three years after the game shipped right up until the time we shipped Battlefield 1, so deep engagement in that product. In terms of full-game downloads, in the script we talked about growth of 4.5% in Q2, and I remind everyone that none of the digital business for FIFA was in that number. And so you should assume that we're seeing healthy growth in full-game downloads at or above our expectations. And you should assume that the early data on both Battlefield and Titanfall also is strong, mainly because of the skew towards PC of those games versus say Battlefront was a year ago. So in general, we're very comfortable with the trend that we've put in place. And we continue to see consumers defaulting to what is the easiest way to buy products. Christopher David Merwin - Barclays Capital, Inc.: All right, great. Thanks, Blake.

Your next question comes from the line of Brian Nowak with Morgan Stanley. Brian Nowak - Morgan Stanley & Co. LLC: Great, thanks for taking my questions. I have two. Appreciating some of the color on FIFA on a like-for-like basis, I would just be curious if you can talk about Ultimate Team paying and playing penetration now versus a year ago. And what do you see as the main drivers to take Ultimate Team penetration higher over the next couple years? And then secondly, can you just talk about early learnings on FIFA Mobile relative to what you saw on Madden Mobile when you made the changes a couple years ago? Thanks so much. Blake J. Jorgensen - Electronic Arts, Inc.: Why don't I start on the Ultimate Team piece, and then I'll have Andrew talk about the mobile piece? The Ultimate Team data is, as I mentioned, strong growth when you just look at the first four weeks. Because of the calendar differences this year versus last, we used that first four-week stack because I think it gives a good sense that Ultimate Team is growing along with the growth of the FIFA portfolio of users. The Ultimate Team growth is greater than the underlying FIFA unit growth, so that's a good sign. It's too early for us to be able to say does that mean more people are in the funnel or more people spending more? It's just early in the season to be able to say that. But we're very confident that people continue to enjoy the game mode and have found that to be a very highly engaging way to continue to come back and play FIFA every day or every week. And so we're optimistic about where that's going, but yet unable to know exactly what the stats are driving the underlying business. Andrew P. Wilson - Electronic Arts, Inc.: On the mobile question, we're very happy with both NBA LIVE and FIFA on Mobile. As we think about the future of that and we think about a benchmark in terms of Ultimate Team on console, what we've seen with Ultimate Team on console across FIFA, Madden, and hockey, for example, is the underlying mechanic is fairly consistent. There are some nuances based on the gameplay of each particular sport and the markets where those sports are strongest and on the consumer spending habits in those markets. We're seeing similar nuances between Madden Mobile, NBA LIVE Mobile, and FIFA Mobile. We're very comfortable and confident with the underlying mechanic and very excited that both NBA and FIFA are ahead of where Madden was at this point in its life cycle. And we would expect to continue to grow and tune those experiences for the core gamer and their core markets over the coming months and years. Brian Nowak - Morgan Stanley & Co. LLC: Great, thanks. Blake J. Jorgensen - Electronic Arts, Inc.: Next question.

Your next question comes from the line of Justin Post with Bank of America Merrill Lynch. Justin Post - Bank of America Merrill Lynch: Great, thanks. Blake, maybe you can help us a little bit and frame the FIFA Mobile opportunity as you see it relative to Madden. I think it's important. And then it looks like Mass Effect is still scheduled for the year. Maybe talk a little bit about the flexibility around that title and how you see the timing there. Thank you. Blake J. Jorgensen - Electronic Arts, Inc.: So on the FIFA Mobile opportunity, obviously soccer is a much larger sport globally than American football. That's a huge positive for FIFA. And I think you could do lots of stats as to the size of the audience base for those two sports. I don't know those numbers off the top of my head, but clearly global football is a lot larger than American football. The counter to that is that mobile games tend to monetize very well in the West and, in particular, monetize well in the U.S., and that's driven by economics in the country. That means that there are places around the world where we do not expect FIFA to monetize anywhere near at the level that it does – Madden does here in the U.S. I think for us, the long-term play is how do we build an engaging mechanic in mobile that provides access to the number one sport in the world to allow people to engage like they do in Ultimate Team on console in places all around the world where they may not have access to a console or they may not be a console player. So that means large potential in all of Europe, both Western and Eastern, large potential in Latin America where soccer is very strong, and obviously large potential in China. Our goal is to go after all of those markets with a very compelling service. The beauty of mobile as well, as Andrew just mentioned, is it can be tuned and change the engagement models over time without having to build a whole new product. You don't have, like in the console business, the need to build a product every year. You're constantly updating mobile, and that provides us the ability to tailor the offering as we find what plays well in each local market. On the Mass Effect question, really our focus – the way to think about it is our focus is on building great games. Right now, Mass Effect is tracking extremely well. The game looks beautiful, and we're really pleased with its progress. However, as you've seen, we are willing to make moves in launch date if we feel it's necessary to deliver the right player experience. And our guidance assumes that Mass Effect continues to be in this year, but it gives us some flexibility that we might choose to move it either a week or three or four or five months if we have to based on what we want to make sure in terms of delivering the right experience for the player. So no news on Mass Effect other than we continue to have it in our guidance. And the moment that changes, we'll certainly let everyone know. Justin Post - Bank of America Merrill Lynch: Thank you.

Your next question comes from the line of Stephen Ju with Credit Suisse. Stephen Ju - Credit Suisse Securities (USA) LLC (Broker): Thanks. Andrew, any perspective you can give us on how much of a headwind you might be seeing outside the U.S. for full-game downloads as well as for downloadable content due to payments friction? And also, one more question on FIFA Mobile, if I may, now that you've shipped the game, can you talk about the extent of the resources that you have prepared for live ops and I guess follow-up content to keep up user engagement? And is there any sort of seasonality data you can share with us in terms of the global user base, especially as it regards to the EPL, Champions League, or World Cup qualifying activity? Thanks. Andrew P. Wilson - Electronic Arts, Inc.: Wow, that was a lot. I will endeavor to get all three there. On digital download data, again, what we have talked about many times is we see that growing by about 5 percentage points a year. That accounts for some more aggressive growth in certain markets over others. We do typically see markets in Europe where this is progressing more slowly. But again, I think by the time we get back to you next quarter, we will have more data on both Battlefield 1 and Titanfall 2 that we'll be able to share. And that will be a good measuring stick for us as we think about where digital downloads are going, but they're absolutely moving in the growth trajectory direction in all markets. But bigger markets like North America, the UK, and markets that typically have more access to digital payment methods are growing at a faster rate, as you might imagine. FIFA Mobile, as we think about that, we have built what we believe is a very, very strong EA SPORTS mobile organization. As many of you know, I had the great fortune of leading that organization, the EA SPORTS organization for a number of years, and we take great pride in really driving great broad sport experiences on every platform that people want to access interactive sports on. We see it as a real opportunity for us to grow sports in the mobile space as we have done on almost every other platform up to this point. We also believe that the live service orientation of sports is growing rapidly, as we have seen with Ultimate Team on our console business, and have built a very strong and robust organization around our SPORTS Mobile business that we believe is very well resourced to deal with the live service opportunity that we think those games will bring on mobile. Blake J. Jorgensen - Electronic Arts, Inc.: I think to add to that, one of the keys to remember is it's not just running a live service. It's driving events, and you mentioned events associated with the Premier League or with actions that are going on in the sporting world like World Cup or, in the case of American football, the Super Bowl or playoffs. Our strength is to drive those live ops, and we believe that that works in both the success we've had. That's proven in the success we've had in Ultimate Team. It's proven early on in the success we've had with Madden, and we think we can do that. And I think it will prove ultimately that it will help us in the competitive sports world in how we design the tournaments that we're doing and how we partner with people during those tournaments. We're very excited about that potential to drive our skills around live ops across all of the platforms in which we're doing business today. Andrew P. Wilson - Electronic Arts, Inc.: And just to add a little context on that, to your last point, which was seasonality in the global user base, particularly around European football, one of the great things about our FIFA property is the many licenses and relationships we have across domestic leagues and international teams and tournaments. And the beauty of soccer on a global basis is the season when combining domestic leagues with international tournaments is very, very long. And part of the reason why we're seeing such deep engagement in FIFA Ultimate Team month in, month out from launch through to the launch of the next version of the title is driven by this ongoing global soccer season. We would expect that to also deliver benefit to us in the mobile space. Stephen Ju - Credit Suisse Securities (USA) LLC (Broker): Thank you.

Your next question comes from the line of Brian Fitzgerald with Jefferies. Brian P. Fitzgerald - Jefferies LLC: Thanks, guys, a couple questions. One, any sense Titanfall is being cannibalized by other games like Battlefield 1, and anything notable to call out in terms of player overlaps or player dynamics maybe between the two titles? And we know it's still early, but any thoughts on launch windows being so close? Do you like it this close, you don't mind it, or would you rather spread them out a little bit in the future? Andrew P. Wilson - Electronic Arts, Inc.: Great question. Again, as we talked about coming into this, the first-person shooter category is a very large category, one of the largest. I think this year it's forecast to be the largest in the absence of some action adventure titles. It actually breaks down into a number of key categories. We believe that Battlefield 1 and Titanfall 2, while they have some overlap, fulfill very different motivations in what a player is looking for. And so we think there are really three types of players: people that really love Battlefield and that type of big strategic game play that will orient in that direction; the player that loves the fast, fluid, kinetic gameplay of Titanfall 2 and really orients in that direction; and the player that just has to play the two greatest shooters this year and will buy both. And again, we're very, very excited about the quality in both titles. We believe they both will have a long sales cycle both this quarter, through the festive season, and deep into the years come. And so as we think about the long game on this, we couldn't be in a better position for what we think is delivering great games to a very, very big player base. Brian P. Fitzgerald - Jefferies LLC: Great. Thanks, Andrew. Blake J. Jorgensen - Electronic Arts, Inc.: Next question.

Your next question comes from Colin Sebastian with Robert W. Baird. Colin Alan Sebastian - Robert W. Baird & Co., Inc. (Broker): Thank you and congratulations on another strong quarter and the launch of Battlefield. Blake J. Jorgensen - Electronic Arts, Inc.: Thanks, Colin. Colin Alan Sebastian - Robert W. Baird & Co., Inc. (Broker): First off, I was hoping for an update on Peter's e-sports initiatives, in particular with Battlefield. And then secondly, I was wondering if you saw any noticeable impact on sell-through of software from launch of new hardware SKUs. Thank you. Blake J. Jorgensen - Electronic Arts, Inc.: So do you... Andrew P. Wilson - Electronic Arts, Inc.: Let me jump on – Peter and the competitive gaming group inside Electronic Arts have been doing amazing work. Again, we've been doing competitive gaming for a number of years, but the energy that Peter and his team have brought to it has really taken it to the next level. What you heard in the prepared remarks is how strong we are going into both FIFA and Madden seasons, focused on all aspects of the player journey, from the grass roots level in qualifying tournaments through to elite leagues and elite championships on a global stage. And we're very, very excited about what that is doing for engagement and how that is bringing new people into play, both in our Madden and FIFA franchises. With the launch of Battlefield 1, as you can imagine, we are also looking deep into Battlefield 1 tournaments. We have run a lot of great tournaments with partners in Europe and in North America with Battlefield in the past. And with the launch now in place and the quality of the game so high, the team is working on some very specific game modes and features that will further enhance the competitive play in Battlefield 1 over the coming months and years. Blake J. Jorgensen - Electronic Arts, Inc.: On the console question, it's a little early for us to know what the big impact will be of new PlayStation and Xbox models. We're extremely excited about them. The gameplay quality is obviously fantastic. We think the consumer experience is going be great on both of those consoles. But it's early because the selling season is really as we go between now and the end of the calendar year. Our internal estimate is still roughly 80 million units by the end of calendar year and 100 million units by the end of next year, calendar year. And as a note, the install base right now is 33% higher than the previous generation consoles for the first 35 months in the West. All of that bodes extremely well for the overall business. And that combined with the fact that I think you'll continue to see fantastic deals around bundling associated with the new consoles, the consumer is really going to get a great opportunity to increase or enter the best level of the gaming business that we've seen in a long time. Colin Alan Sebastian - Robert W. Baird & Co., Inc. (Broker): Thank you. Blake J. Jorgensen - Electronic Arts, Inc.: Next question?

Your next question comes from the line of Eric Sheridan with UBS. Eric J. Sheridan - UBS Securities LLC: Thanks so much for taking the questions, maybe two more on the cost side of the equation. One, as you see the competitive environment playing out through the holiday period, how's that competitive intensity comparing with what you were thinking in terms of spending on marketing or combating the competitive intensity during the holiday period? That's number one. Number two, Blake, in your prepared remarks, you talked a little bit about R&D. Obviously, you have some titles you haven't unveiled yet as we look out towards fiscal 2018. Any way you can size for us what the R&D scope against numbers might be as we look out, either this quarter or in future periods, versus things that haven't yet been announced on the revenue side but could be impacting us on margins and free cash flow? Thanks guys. Blake J. Jorgensen - Electronic Arts, Inc.: So on the competitive nature, we've built into our guidance appropriate marketing spending. We do tend to see, as you saw this quarter, there tends to be phasing from Q2 into Q3 in certain programs. We decide on timing at the last minute. But in general, I think the core marketing focus, including traditional holiday promotions and all the activities around everything from Black Friday through the end of the calendar year, I think are pretty well baked in and are reflected in our guidance. So I don't think you should see something different than that relative to our overall marketing spend. In terms of R&D, we've talked I think publicly about roughly 25% of our R&D is for new products. Those new products could be brand new IP such as we're building obviously a new studio in Montreal around Jade Raymond and the team she's building there, so we're hiring people for that studio. They'll be building a new action title for us. That's not next year or the following year. That will be three or four years out, but obviously we're spending money on that. We're spending money on building out around key sports properties that we have, adding things like The Journey into FIFA, for example. You'll see more of that type of work on existing products over time. And we're obviously building out on the Star Wars franchise that has proven to be very successful for us. You'll see new Star Wars product coming out in the future as well. So much of our core increases in R&D expenses have been all around those new opportunities as well as some new technology, so obviously investing in VR, investing in streaming technologies, investing in mobile. We're trying to make sure we are very focused on where the future is going and be able to be there when any new platforms develop or any shifts in platforms happen. And we think it's the prudent way to run the business. We try to make our biggest franchises as cost efficient as possible. But at the same time, we're constantly investing in innovation around those to add new and exciting ways to play the games.

Your next question... Blake J. Jorgensen - Electronic Arts, Inc.: Next question?

...comes from the line of Mike Olson with Piper Jaffray. Michael J. Olson - Piper Jaffray & Co.: Hey, good afternoon. So for fiscal 2017, obviously a big year for incremental titles. I was wondering if you could talk about what would be reasonable to expect as we looked into fiscal 2018. I guess does it makes sense to assume a Star Wars Battlefront title next year that could offset Battlefield 1 this year? And I think you just mentioned that the new action title in the works probably won't hit next year to offset Titanfall 2. So how should we think about comping Titanfall 2? Maybe it's strong digital growth or something that helps to offset. But basically how does this good year in fiscal 2017 impact growth rates in fiscal 2018? Thanks. Blake J. Jorgensen - Electronic Arts, Inc.: So we have talked obviously about the next Battlefront coming a year from now, and we're working very hard on making sure that is an extremely deep and engaging offering. We've talked about an action title that's not yet announced, but we're very excited and that's a good chance that that will fall into fiscal 2018. I'm not yet giving guidance for 2018, so I want to be careful that we don't get overboard. But we're confident that we should be able to comp a strong year this year. One thing that people tend not to remember is when you have a title like a Battlefield or a Titanfall, those tend to sell extremely well in the catalog for at least another 12 to 24 months. And in the case of Battlefield in particular you'll have all the premium services kicking in next year. We won't see any of that in this year's revenue. So it's exciting times for our big franchises like that and huge opportunities for us to continue to monetize. We also believe our mobile business will continue to grow, which will obviously help in the comps year over year. And our live services businesses continue to get stronger and things like our FIFA online business in Asia. Our goal is to try to grow all of those to help offset what could be a great year this year. Michael J. Olson - Piper Jaffray & Co.: Thank you.

Your next question comes from the line of Ben Schachter with Macquarie. Benjamin Schachter - Macquarie Capital (USA), Inc.: Hey, guys, a few things. First, congratulations on the strong ratings for Titanfall and Battlefield. Following up on your point about money into next year from those titles, how does it impact your long-term thinking about the marketing investment that you'd put against those games over the longer term? And then secondly, Blake, you mentioned that you earned the right to look at potential acquisitions, but we haven't seen a lot. What type of deals are you focused on now, and is it mostly price that's holding those up? And finally, just a quick clarity point, did I hear you correctly say that digital downloads are growing about five points a year, perhaps more in North America and the UK? If yes, what was the base we're growing off of last year? Thanks. Andrew P. Wilson - Electronic Arts, Inc.: So I'll take the marketing piece, and then I'll hand over to Blake. Yes, we certainly are adjusting and evolving how we market our titles, and we think about this on a few different vectors. First is we see core purchase of the title continuing for much, much longer, particularly of high-quality experiences with great social play dynamics, like properties like Battlefield 1 and Titanfall 2. And you should expect that we have planned for a longer marketing cycle around that. The second is we are using our network and investing more deeply in our network to drive cross-play of franchises within our network. And you should expect to see us continue do that using the games that we already have in the marketplace to help introduce new players to new games that we know they'll love based on their play patterns. And then the third is the live services that are wrapped around games, active marketing in and of themselves, is every time we drive a new event around a particular property as part of a live service, that acts as a beat that drives conversation in social channels about the games that we play. So as we think about an elongated initial marketing cycle, as we think about the power of our network and the amount of players that we have in it playing every day and we think about the live services that we have wrapped, we are really transforming how we market our games and believe we're getting much, much stronger ROI on every dollar spent. Blake J. Jorgensen - Electronic Arts, Inc.: And Ben, on your other two questions, on full-game downloads, we finished our fiscal 2016 around 24% of all of our games. And as we've talked about publicly, we lag the industry by one or two points primarily because FIFA is such a large global product. It has huge share in some marketplaces where full-game downloads, due to bandwidth or credit card capabilities, are not – it impacts that business there. Benjamin Schachter - Macquarie Capital (USA), Inc.: Blake, are those console games, or PC also? Blake J. Jorgensen - Electronic Arts, Inc.: They're PC... Benjamin Schachter - Macquarie Capital (USA), Inc.: Was it 24% of all? Blake J. Jorgensen - Electronic Arts, Inc.: Excuse me. This is Gen 4-only consoles, sorry. Obviously, PC skews it. 75% to 80% of all PC games are full-game downloads. That pulls the numbers up. We think the industry is going be probably by calendar year end around 30%. And our internal estimates are around 29% for ourselves, once again, slight lag with the industry. But as I said, I think we're seeing positive trends on all of that, so that's good. And then on the last piece, M&A, we look at everything as one of the large players in the industry. We have the benefit of everything gets shopped to us. And we have good relationships with virtually everyone in the business, so we tend to have ongoing dialogue with everyone. Price has been an issue on some of the big deals that have been recently completed. For us, the bigger issue is the correct fit and the right product mix. And unfortunately, just there are not lots of AAA studios out there in today's world, and it's very different than it was 10 years ago in the business. We continue to look at things. We're always trying to find ways to create value for shareholders. But in the same vein, we're very careful that we don't simply try to fuel growth through acquisitions. We need to fuel value creation, not just the top line. Next question?

Your next question comes from the line of Neil Doshi with Mizuho. San Q. Phan - Mizuho Securities USA, Inc.: Hi, this is San in for Neil. Offering free DLC for Titanfall is pretty unique. I was wondering if you can share the feedback you're getting on that decision, and if you're expecting that to have a different sales curve on the game versus others with a season pass. Blake J. Jorgensen - Electronic Arts, Inc.: Can you repeat the first part of the question again? Sorry, we didn't hear. San Q. Phan - Mizuho Securities USA, Inc.: Sure. So offering a free DLC for Titanfall is pretty unique. I was just wondering if you can share the feedback you're getting thus far on that decision, and if you're expecting that to impact the game with a different sales curve versus other titles that traditionally would have a season pass. Blake J. Jorgensen - Electronic Arts, Inc.: Okay, I'll let Andrew take it. Andrew P. Wilson - Electronic Arts, Inc.: Great question, the feedback has been really, really positive. If you go and look at the player conversation in the marketplace right now around Titanfall 2, it's very, very strong. Respawn, who are an amazing studio who have built some of the greatest games over the last decade, have a real commitment to players, as do we as a company, and are looking to support and drive and grow and nurture that community over a number of years. And the whole construct of how they have put that plan together is receiving really positive feedback from that community. As we think more broadly about how that impacts other games, again, we have a big and diverse portfolio with a growing and diverse player base, and we are always looking for the best way to offer amazing gameplay experiences with tremendous value to our player base. And we'll always take feedback from our player base as to how we should think about things on a go-forward basis. Blake J. Jorgensen - Electronic Arts, Inc.: I think one thing to remember, it gets lost I think on a big AAA title like Titanfall. We are working with Respawn to build a franchise. This is something that we plan to be working with them on for many, many years to come, and there's huge opportunity inside of that franchise to continue to expand it. And so part of the strategy of building a franchise is you have a long view. You think about the business differently than you might an existing franchise like a FIFA or a Madden. And what that means is we're looking for ways to not fragment the player base early, but to include as everybody as possible and as we can to continue to build that franchise. We think that's the right strategy for a product like Titanfall. And more to come as we learn more, but that's the reason that we chose to go the route we went. San Q. Phan - Mizuho Securities USA, Inc.: Great. And just a second question related to that, we were actually surprised to see some retailers out of stock with physical copies of the game both at retail and online. Anything notable to call out with the sales channel there? Blake J. Jorgensen - Electronic Arts, Inc.: That people bought the game I guess, and retailers didn't have enough stock in place. I don't know. I hope that someone, if they couldn't find it on the retail shelves, went home and digitally downloaded it. But I think with the new franchise, there's only been – remember, there was only one Titanfall before and it was single-platform. And so retailers oftentimes, they have their own sales models. They try to build their own demand models, and they listen to the consumer and they listen to our salespeople. But at the same time, they're trying to balance how much they put on shelves. And they've got to spend money to build inventory, and so you might have found retailers out of stock, and we hope that we've gone back and got those shelves filled up for the future. San Q. Phan - Mizuho Securities USA, Inc.: All right, great. Thanks a lot. Blake J. Jorgensen - Electronic Arts, Inc.: Thanks, next question.

Your next question comes from the line of Eric Handler with MKM Partners. Eric O. Handler - MKM Partners LLC: Yes, thanks for letting me ask a question. On Madden and Madden for Mobile, I'm just curious. How much overlap is there between mobile players and the console players, and are you seeing any shifts in time spent? And when you think about money that's being spent, is there any cannibalization from Madden for Mobile, or is it additive? Andrew P. Wilson - Electronic Arts, Inc.: So at a macro level, when you look at it, it's clearly additive because both businesses are growing. What we have seen is that mobile is adding younger players at a higher rate than console is, but we're also seeing some mobile players come across. And I believe the number – I believe about 70% or 75% of console players also play Madden Mobile. And so what we're seeing is, when you're a football fan and you're a Madden fan, you love the experience that is high-definition on your 80-inch television coupled with a live service like Madden Ultimate Team that connects you with your friends in that high-def experience. But you also love Madden and Madden games while you're on the go, and you're using mobile as an opportunity to do that. As we look to the future, we think there is a world where we drive even greater connection at a design level between the console experience and the mobile experience, and we believe that is going be a strategic opportunity for us as we think about the growing player base in any one of our franchises. Eric O. Handler - MKM Partners LLC: Great. And just... Blake J. Jorgensen - Electronic Arts, Inc.: One last question? I'm sorry. Chris Evenden - Electronic Arts, Inc.: One more question, operator.

I'm sorry. Our final question comes from the line of Mike Hickey with Benchmark Company. Michael Hickey - The Benchmark Co. LLC: Hey, guys, great quarter. Thanks for squeezing me in, Blake, I appreciate it, just two for me. I'm curious on how Respawn moves forward here. Normally, we would think of maybe a Titanfall 3 in a couple years, but I think they're also excited to work on a Star Wars game, so I'm wondering if you're growing the studio there or how we should think about pacing of those two games in the future. Then a last one, just thinking about the comp issue for 2018, remastered games have obviously been very popular. I think you've done less there than maybe some of your peers. How are you thinking about remastered games as an opportunity in the future? Thanks, guys. Andrew P. Wilson - Electronic Arts, Inc.: On the Respawn element, again, we have announced we have a long-term relationship planned with them. We are looking at a number of different things with them. As is related to Titanfall 2, there is still a lot of things that they'll be putting into the game for the foreseeable future. One of the lessons that we have learned is that when you have a great game like Titanfall 2 or Battlefield 1, giving it enough breathing room in the marketplace for fans to play for many years is really important to delivering the true value of that experience to fans, as we did with Battlefield 4. Again, I think just a quarter ago we announced that we still had 11 million people playing Battlefield 4. And so the expectation is that Respawn will continue to support and grow the Titanfall community through Titanfall 2. And over time we'll work out what the right cadence for next version of Titanfall is and/or any other titles they're working on. And then the second part? Blake J. Jorgensen - Electronic Arts, Inc.: A remaster. Andrew P. Wilson - Electronic Arts, Inc.: And the second part in terms of remasters, again, it's something that we look at. In all cases, we're trying figure out what is right for the player. If there's a world where there are games that we have in our catalog that players really want to play in a remastered variety and we believe that we can add the kind of enhancements that make that worthwhile for a player, then we will do that. Nothing to announce today, but certainly you can imagine with a portfolio as rich and deep as ours and with a player base as engaged as ours that we're getting lots of requests right now. Michael Hickey - The Benchmark Co. LLC: Thanks, guys. Blake J. Jorgensen - Electronic Arts, Inc.: With that, I thank everyone. We look forward to seeing or talking to everybody over the next quarter, and we'll see everyone back for earnings at the end of January. Thank you.

Thank you for your participation. This does conclude today's conference call, and you may now disconnect.