Kristin Southey - Vice President, Investor Relations and Treasurer Robert A. Kotick - President, Chief Executive Officer Thomas Tippl - Chief Financial Officer Michael J. Griffith - President & Chief Executive Officer of Publishing Unit Michael Morhaime - President and Chief Executive Officer of Blizzard Entertainment, Inc.

Jeetil Patel - Deutsche Bank Tony Gikas - Piper Jaffray Benjamin Schachter - UBS David Joseph - Morgan Stanley Eric Handler - Lehman Brothers Evan Wilson - Pacific Crest Securities Mark Wienkes - Goldman Sachs John Taylor - Arcadia Investments Shawn Milne - Oppenheimer & Company Edward Williams - BMO Capital Markets

Good day, everyone and welcome to this Activision Blizzard quarterly conference call. Today’s conference is being recorded. At this time for opening remarks and introductions, I would like to turn the conference over to Vice President of Investor Relations, Ms. Kristin Southey. Please go ahead.

Good afternoon and thank you for joining us today for Activision Blizzard's June quarter conference call. As always, I will start today’s call with a review of our Safe Harbor disclosure, followed by comments from Bobby Kotick, CEO; Thomas Tippl, Chief Financial Officer; Mike Griffith, President and CEO of Activision Publishing; and Mike Morhaime, President and CEO of Blizzard Entertainment. I would like to remind everyone that statements will be made during this call that are not historical facts and are forward-looking statements. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties. The company cautions that a number of important factors could cause Activision Blizzard's actual future results and other future circumstances to differ materially from those expressed in any such forward-looking statements. Such factors include without limitation sales levels of the company’s titles, shifts in consumer spending trends, the seasonal and cyclical nature of the interactive game market, the company’s ability to predict consumer preferences among competing hardware platforms, declines in software pricing, product returns and price protection, product delays, retail acceptance of our products, adoption rate and availability of new hardware and related software, industry competition, rapid changes in technology and industry standards, protection of proprietary rights, maintenance of relationships with key personnel, customers, vendors and third-party developers, domestic and international economic, financial, and political conditions and policies, foreign exchange rates, the integration of recent acquisitions and the identification of suitable future acquisition opportunities, Activision Blizzard's success in integrating the operations of Activision and Vivendi games in a timely manner, or at all, and the combined company’s ability to realize the anticipated benefits and synergies of this transaction to the extent or in the timeframe anticipated. Other such factors include the further implementation, acceptance and effectiveness of the remedial measures recommended or adopted by the special sub-committee of independent directors established in July ‘06 to review our Activision’s historical stock option granting practices, the finalization of the tentative settlement of the SEC’s formal investigation related thereto and other litigation unrelated to stock option granting practices. These important factors and other factors that potentially could affect the company’s financial results are described in the company’s most recent annual report on Form 10-K. The company may change its intentions, beliefs, or expectations at any time and without notice based upon any changes in such factors in the company’s assumptions or otherwise. The company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events. I would like to note that certain numbers we will be presenting today, including net revenues, operating income, earnings per share, manufacturing and distribution costs, product creation costs, sales and marketing expense, and G&A spending, will be made excluding the impact of expenses related to the equity based compensation cost, one-time costs related to the business combination between Activision and Vivendi Games, including transaction costs, integration costs, and restructuring activities, should there be any, and the associated tax benefits. With respect to future periods, Activision Blizzard's non-GAAP results and guidance will also exclude the impact of the change in deferred net revenues and cost of sales, the [operating results [inaudible] and] operations from the historical Vivendi Games businesses as the company [inaudible], the impact of purchase price accounting related adjustments, including the amortization of intangibles and the increase in the fair value of inventory and associated cost of sales and the associated tax benefits. Please refer to our earnings release which is posted on our website at www.activisionblizzard.com for a full reconciliation. I would also like to point out that we are changing our fiscal year-end to December 31st and the numbers we are providing today do not incorporate any adjustments made as a result of our previously announced stock split. And now, I would like to introduce our CEO, Bobby Kotick. Robert A. Kotick: Thank you, Kristen. I would like to start by welcoming our new shareholders, employees, partners and customers. As you know, on July 9th we completed our groundbreaking combination with Vivendi Games which has made us an even more profitable company with a far greater ability to generate predictable financial results, tap into new international markets, and capitalize on the growth trends in both the console and online markets in which we operate. We now have one of the broadest and most diversified product portfolios and leading market positions across all categories of our rapidly growing industry. Our commitment to delivering consistent profitability and long-term shareholder value creation will remain our focus. Today I am very pleased to introduce Mike Morhaime, the CEO and Co-Founder of Blizzard Entertainment, which is the world leader in subscription-based online games. Mike started Blizzard in 1991, the same year that I joined Activision. Together we’ve accelerated Activision Blizzard’s entrance into the high operating margin and fast-growing massively multiplayer online genre, and should help us to establish a meaningful presence in the growing Asian markets. We are also excited to add a number of the Vivendi Games properties to the Activision Publishing roster of franchises, the majority of which are wholly-owned IPs, including such proven properties as Crash Bandicoot and Spyro. Activision Blizzard now has the largest portfolio of proven wholly-owned internally developed intellectual property of any third-party publisher, which will continue to drive operating margins and shareholder value. The benefits of the combined company are numerous, including positioning us to be one of the fastest growing, most profitable entertainment companies in the world. The integration of Activision and Vivendi Games is going very well and it illustrates the complementary nature and excitement that is felt throughout the organization about becoming a leader in interactive entertainment. I would like to again thank the employees from both companies for their commitment, hard work and dedication in making this transaction seamless. Today, we are a much larger and stronger company than we were on our last conference call but as I said, our priorities and focus remain unchanged -- growing our global presence, expanding our operating margins, and continuing to create shareholder value. Our strategies continue to be well-aligned with market growth and opportunity. Activision’s solid June quarter performance was driven by strong market conditions and the continued success of our balanced franchise portfolio. We continue to identify new market opportunities and reinvent our core brands through innovative game play that we validate through our consumer research and support with high-quality development resources. For the June quarter, Activision was the number one third-party publisher on both the Nintendo Wii and Nintendo DS in the U.S., according to NPD. Guitar Hero On Tour was the number one best-selling title overall in North America for the Nintendo DS and Kung Fu Panda was the number two third-party children’s title in the U.S., according to NPD. For the first-half of the calendar year, Guitar Hero remains the number one selling franchise in the U.S., even outselling Grand Theft Auto, and we were the number one third-party Nintendo publisher, outselling our next competitor by almost 2-to-1. Our success is underscored by our revenue growth, significant return on invested capital, and our exceptionally strong cash position. Our record performance highlights the long-term financial opportunities that our industry has to offer. Our increased scale will provide us with significant cost leverage that will be reflected in our operating margins. From a macro perspective, the interactive entertainment market has never been larger or stronger. The U.S. and European software markets had significant growth in calendar 07 and there is no evidence that this growth will slow. In fact, we now expect that calendar 08 will mark the second year in a row of 20%-plus growth in the U.S. and European retail packaged goods software markets. In addition, we see the same strong growth trajectory in worldwide online gaming revenues. All of this further validates that interactive entertainment is one of the fastest growing entertainment media, as games have become an integral part of leisure time. In the coming months, we will continue to leverage the strong market fundamentals with a solid and deep slate of products. Our lineup is anchored by four of the top selling franchises in the history of video games -- Guitar Hero, Call of Duty, James Bond, and World of Warcraft. Today, video games are appealing to broader global audiences than at any time before, and console online gaming is driving the Internet to the television. Online opportunities on both the PC and consoles have the potential to expand audiences, increase industry record operating margins, and provide more stable revenue streams through subscriptions, downloadable content, and fees generated for virtual property, as well as tournament and multiplayer play. This is an area that we expect will become an even more important and profitable component of our business model in the future. Strategically, we remain focused on building our business with a vision for the future. We own or control some of the most successful brands in entertainment and we will continue to focus our resources on proven properties with broad global appeal. Today, the combined company has a cash balance of approximately $3 billion, which will allow us to continue making prudent investments that align our strategies and meet our stringent investment criteria. The strong cash position gives us the flexibility to expand our intellectual property portfolio, extend our development leadership, and further strengthen our global marketing and distribution footprint. Additionally, we can return cash to shareholders in a variety of ways, including share buy-backs. The long term investments we have made continue to drive our consistent performance and should enable us to continue to deliver superior financial results and returns for our stakeholders. Today, we are pleased to provide our financial outlook for the balance of calendar 08 and this will be another exciting holiday season, driven by positive market fundamentals and great products that we have, based on proven franchises. Since the announcement of the combination last December, our combined businesses continue to get stronger. In addition, we have gained better visibility into our holiday release schedule and this calendar year is already tracking a full year ahead of next year’s merger objectives that we announced last December. This is a very exciting time for Activision Blizzard and we very much look forward to sharing the details with you on our September 15th analyst day. Now I would like to turn the call over to Thomas Tippl, who will provide a review of Activision’s stand-alone operations for the last quarter and our outlook for the combined company for the balance of the fiscal year. Thomas.

Thank you, Bobby. I will begin with a review of Activision’s standalone June quarter results and then I will provide an outlook for the balance of the calendar year for the combined company. As you know, our merger closed on July 9th so this will be our last standalone quarterly earnings review. Starting with next quarter’s earnings call, we will provide detailed company commentary on our combined actual results. Now turning to the June quarter results -- Activision’s net revenues were a record $654 million, up 32% versus the prior year and higher than anticipated. Our strong performance was driven by continued momentum of Call of Duty and Guitar Hero III, as well as three successful new product launches: Kung Fu Panda, which launched in May; and at the end of June, two launches from the Guitar Hero franchise, Guitar Hero On Tour, and Guitar Hero Aerosmith. Before I continue with our financial review, I would like to note that certain numbers I will be giving you are on a non-GAAP basis. Please refer to our earnings release for a full reconciliation. For the June quarter, we had earnings per share of $0.18 and non-GAAP earnings per share of $0.23, up more than 100% over the prior year. This is an all-time record for a non-holiday quarter. In the June quarter, manufacturing and distribution expense was 48% of net revenues versus 44% in the prior year, due in part to a higher mix of handhelds and costs associated with affiliate releases, primarily LEGO Indiana Jones in Europe. Product creation costs for the quarter were 18% of net revenues and non-GAAP product creation costs were 17%, versus 28% last year. We define product creation costs as the sum of cost of sales, software royalties, and amortization, cost of sales intellectual property licenses, and product development expense. The significant cost reduction was driven by the large amount of licensed IP we launched in the prior year, including Spider-Man, Shrek, and Transformers, as well as product development efficiencies reflected in this year’s results; specifically, Kung Fu Panda had efficiencies from offshore development and Guitar Hero Aerosmith had below-average product development expense as it leverages Guitar Hero III technology. Sales and marketing expense for the quarter were 13% of net revenues versus 14% in the prior year. G&A as a percentage of net revenues was 9% and non-GAAP G&A as a percentage of net revenues was 6%, in line with the prior year. We generated lower invested income versus the prior year, due in part to lower market rates and a shift of our investment portfolio to higher rated shorter term securities. Our effective tax rate was 35%. Now turning to the balance sheet -- on June 30, we had approximately $1.3 billion in cash and investments, an increase of $289 million versus the prior year and down $196 million versus the prior quarter, primarily due to Guitar Hero working capital needs in front of the quarter-end launches. The accounts receivable balance was $401 million, up $203 million versus the prior year, due to in part higher revenues, and up $198 million from the March quarter, due to the late quarter launches of Guitar Hero Aerosmith and Guitar Hero On Tour. Inventories were $229 million, an increase of $83 million versus last quarter and higher than the prior year by $136 million, as we gear up for the remaining international launches of Guitar Hero Aerosmith and Guitar Hero On Tour, and supply for our Guitar Hero World Tour launch this holiday. Capitalized software development costs were $154 million, an increase of $40 million versus last year and up $44 million versus last quarter. The increase over last quarter reflects continued development of our future slate. Capitalized intellectual property costs were $90 million, up $8 million versus the prior year and up $6 million versus last quarter, primarily due to licensing payments for the Bond franchise. Before turning to our financial outlook, I would like to highlight a few items: first, going forward, the financial outlook we provide will be for the newly combined company, Activision Blizzard but to be clear, the Activision contribution to the combined outlook for the balance of the calendar year is consistent with the guidance we previously provided for Activision as a standalone company. As a reminder, I would also like to review the updates to our financial guidance and reporting that we discussed in our last call, the first being that the online functionality for certain key titles to be released in the December quarter and thereafter is expected to become a significant component of game play for certain platforms for which the company will have continuing performance obligations beyond the sale of the game. As a result, the company expects to begin recognizing a substantial amount of net revenues and cost of sales from these online enabled games over a service period, which we currently estimate to be six months beginning the month after shipment. We anticipate that a considerable amount of net revenues and earnings that would have been recognized in calendar 08 will be recognized in calendar 09. I want to emphasize that this will not impact the economics of our business or our cash flows, although these changes will have a material impact on our calendar ‘08 GAAP results. In order to provide comparable year-over-year performance, our non-GAAP results will also exclude the impact of the change in deferred net revenues and cost of sales related to those online enabled key titles on certain platforms I would also like to remind everyone that our non-GAAP results will also exclude additional items going forward, as detailed in today’s press release. All these changes are intended to provide our investors full visibility to our underlying operating performance, as they have in the past. So now onto the combined company’s September quarter guidance -- for the September quarter, Activision Publishing has a very light release schedule. Our only multi-platform U.S. and European launch is The Mummy, which will launch on three platforms. In addition, we will launch Guitar Hero On Tour for the NDS internationally, and Kung Fu Panda and Guitar Hero Aerosmith in a few remaining international territories. The majority of the quarter will be spent on ramping up for the biggest holiday in Activision history. This holiday, we will launch our largest SKU count ever and we will begin building inventory in the September quarter for the upcoming multi-platform, multi-instrument, multi-territory launch of Guitar Hero World Tour. As for Blizzard Entertainment, their year-round predictable subscription model will be the key driver of revenue and earnings growth for the September quarter. For the remainder of Vivendi Games, we expect to begin reducing our exposure to the Sierra, Sierra Online, and Vivendi Games Mobile portfolio and as I mentioned, Mike Griffith will address our progress on this later in the call. On a combined company basis, we expect September quarter net revenues of approximately $636 million. Excluding net revenues from the Vivendi Games businesses that the company intends to dispose of or exit, the company expects non-GAAP net revenues of $620 million. The net revenue breakdown will be about 60% Activision/40% Blizzard Entertainment. I would like to highlight that Activision Blizzard’s September quarter outlook does not include net revenues of approximately $50 million that were generated between July 1st and July 9, 2008, when Activision was still a standalone company. As the transaction with Vivendi is considered a reverse acquisition, for calendar 2008 the company’s reported financial results for the period prior to the combination, i.e., January 1st through July 9, 2008, will be those of Vivendi Games. Activision’s businesses will be included in Activision Blizzard’s financial statements for the period subsequent to the combination, which means for the period of July 10th through December 31, 2008. Said another way, our non-GAAP net revenue guidance would have otherwise been approximately $670 million for the September quarter, instead of $620 million. On a GAAP basis, for the September quarter we expect manufacturing and distribution costs of approximately 39% of net revenues, and we expect operating expenses, including royalties of about 106%. We expect interest income of 2.4% and a tax rate of about 37%, which can be used throughout the year. We project a basic share count of about 660 million, which incorporates the new shares that Vivendi received in the merger transaction and does not yet contemplate any potential changes to our capital structure post expiration of the tender offer. Finally, I want to highlight that over the next 12 months, there could be significant movement in our GAAP EPS outlook, as it will be impacted by the timing and nature of the products and operations that the company will either dispose of or exit, and those timings are inherently difficult to predict. So taking all of this into account, we currently expect a GAAP loss of $0.26 per share. Excluding the impact of equity-based compensation, the impact of the operating results from the historical VG businesses that the company intends to dispose of or exit, one-time costs related to the business combination with Vivendi Games and the amortization of intangibles, and the increase in cost of sales resulting from purchase price accounting adjustments, we expect manufacturing and distribution expenses of 37.5%, operating expenses including royalties of 51%, and a diluted share count of 692 million, with non-GAAP earnings per share of $0.08. For the December quarter, on a GAAP basis we expect net revenues of approximately $1.85 billion. We expect manufacturing and distribution costs of approximately 39% of net revenues and operating expenses, including royalties, of about 65% of net revenues. We project a diluted share count of about 697 million and earnings per share of approximately $0.11. Excluding the impact of the factors I just mentioned for the September quarter, plus the change in deferred net revenues and cost of sales related to online-enabled games, we expect non-GAAP net revenues of $2.3 billion, of which about 80% is Activision and 20% is Blizzard Entertainment. On the same basis, we expect non-GAAP manufacturing and distribution expense of 38%, operating expenses, including royalties, of 32% and a diluted share count of 697 million, and non-GAAP earnings per share of $0.64. As Bobby mentioned, we are well-positioned to exceed the industry-leading calendar 09 financial goals we set for the combined company when we announced the deal on December 2. I want to take a few minutes to review the outlook we provided back in December for the combined company and our progress in three specific areas to date. On December 2nd, we provided a combined company calendar 09 non-GAAP net revenue target of $4.3 billion and today, we expect our calendar 08 net revenues will exceed our 09 target by approximately $600 million. Additionally, on December 2nd we provided a combined company calendar 09 non-GAAP operating income target of $1.1 billion and today, we expect our calendar 08 non-GAAP operating income will exceed our 09 targets by approximately $100 million. The revenue over-performance is higher than the profit over-performance, due to the calendar 08 investments in the retained Sierra titles, business mix, and FX benefits, which disproportionately impact the top line. In summary, we are off to a great start and already a full year ahead of the financial objectives we set for calendar 09. The second area we have made significant progress in is the identification of cost synergies. As announced on December 2nd, we were targeting to deliver $50 million to $100 million of cost synergies, and based on the specific plans we have put together since then, we feel comfortable in raising this goal to a range of $100 million to $150 million. The increase versus our prior outlook came from a number of areas, but primarily from overhead reductions and procurement saving opportunities. Finally, we currently expect that the before tax GAAP charges, including severance and lease terminations, and balance sheet write-downs for projects and operations which we will either exit or dispose of, will come in at about $270 million over the next 12 months. Please note that the majority of those charges are non-cash and we project to deliver the larger synergies while staying within the original goal of no more than $100 million in cash restructuring costs net of tax benefits. In summary, we are excited about even greater long-term opportunities afforded by our merger with Vivendi Games and we look forward to updating you on our plans for calendar 09 and beyond at the upcoming analyst day in September. I will now turn things over to Mike Griffith, President and CEO of Activision Publishing, who will provide his thoughts on the balance of the calendar year. Michael J. Griffith: Thank you, Thomas. Today, my comments will focus on our updated market projections for calendar 2008, the plans we have for the Vivendi Games businesses, and the strength of our holiday 08 product line-up. First, starting with the market -- overall industry fundamentals are very strong and we expect them to continue to improve. On June 30th, the installed base of hardware in North America and Europe for current and next generation systems, including hand-held, was 278 million units. In the second calendar quarter, we continued to see strong hardware sales and we now expect the following increases in North America and Europe during calendar year 2008: we are estimating PS2 will be up 4 million to 5 million PS3 up 8 million units; we expect Xbox 360 growth of 6 million to 7 million; and we expect the Wii to add 15 million units; finally, we expect handhelds will grow in excess of 24 million units. Calendar 2008 is an important year for the three consoles, as we expect the hardware installed base on the next-gen platforms will increase this year by more than 60% in the U.S and Europe. [inaudible] the software, we define our market to include all major platforms in North America and Europe. In calendar 2007, the software market grew 32% and the momentum has continued into calendar 2008. For the first-half of 2008, the software market grew 41%, which was stronger than anticipated and higher than the 28% growth in the first-half of last year. Given the strong start to the year, we now expect the combined North America and Europe packaged goods retail software markets will grow in excess of 20% in calendar 2008. This is five points higher than our previous estimates. We anticipate that overall, the software market will continue to hold pricing and disproportionately reward large proven franchises broadly across platforms and geographies. Additionally, at the end of 2007, the worldwide online gaming market across North America, Europe, and Asia was just less than $6 billion in revenue and is projected to grow to almost $8 billion in revenues by the end of calendar 2008. So in summary, our global marketplace is large and growing. Turning now specifically to Activision Publishing, our strong performance this quarter was driven by positive industry fundamentals, our strong slate and execution in the U.S, Europe and Australia. In particular, we continued to be very pleased by strong catalog performance of Call of Duty 4 and Guitar Hero III, along with strong new release performance of Guitar Hero On Tour for the DS, which was the largest third-party DS launch in its first four weeks, according to NPD, and is currently number one on the European charts, giving us desired momentum in this geography. We are also pleased with Guitar Hero Aerosmith, which is also successfully extending the appeal of our franchise with the third-best initial sell-through in Activision history, eclipsed only by Guitar Hero III and Call of Duty 4. We are also pleased with Kung Fu Panda performance, which proves that a strong game, combined with a strong box office, is still a formula for success in the kid space. Over the past few months, we have been conducting a thorough review of the Vivendi Games’ products portfolio and studio operations, and we have identified those products and studios that fit within our financial requirements and long-term strategies. First and foremost, as you know, we are committed to building brand franchises that resonate with consumers, and we are excited to add to our portfolio two proven wholly-owned intellectual properties -- Crash Bandicoot and Spyro. Games based on these two franchises have sold more than 55 million units worldwide life-to-date. We feel these brands have a lot of runway left and will positively benefit from our consumer research and testing. We are encouraged by these games that are in development for release in the December quarter but we also know these properties are ripe for reinvention to increase their appeal, and that’s what we are focused on for the future. With respect to licensed properties, we are also pleased to add Ice Age to our lineup. The Ice Age movies have been very successful, grossing over $1 billion in revenues, and the Ice Age games have sold more than 2 million units. In summary, all three of these proven properties complement our brand portfolio and further strengthen our leadership position in family entertainment and movie-based video games. In addition to these proven properties, we will also add two new very promising wholly-owned intellectual properties. The first is Prototype, which is in late-stage development and has already delivered strong buzz and anticipation. The game looks great, it is very distinctive, and we think it has exciting potential. The second property has yet to be announced, but I can tell you that it has generated an awful lot of internal excitement and I look forward to sharing more details with you in the future. Finally, with respect to the catalog, we will continue to support the Vivendi Games catalog business, including the recently released Mummy, which was timed to coincide with this week’s theatrical release. In terms of studios, our key strategy is to drive our independent model as a long-term competitive model and, as announced, we are adding two Vivendi Games studios to our model: High Moon, the studio behind the Bourne game; and Radical, the developers of Crash Bandicoot and Prototype. With respect to all other Vivendi Games’ products and operations, there are some very talented people at these units and we are currently evaluating various options, but we have determined that these units will not play a strategic role in Activision Publishing’s future portfolio. In summary, we are broadening our product portfolio with five new properties, four of which are wholly-owned, a catalog business, and two additional proven studios which will enhance our future operating performance. Turning now to our brand plans for the balance of the year, last year we had the best holiday season in our history and we expect this holiday will be even larger. This year, there are number of levers that will drive our growth. From a market perspective, our proven titles will benefit from a 60% increase in the next-gen hardware installed base, and leverage the robust software market which is expected to grow more than 20% year-over-year, and especially reward larger titles. For the September quarter, as Thomas mentioned we have a very light release schedule as the majority of our time and effort this quarter will be spent ramping up for the December quarter. For the October/December quarter, we will launch the company’s strongest holiday line-up, anchored by three of the industry’s most successful properties: Call of Duty, James Bond, and Guitar Hero. The Guitar Hero franchise continues to grow in global popularity and consumer awareness making it one of most successful entertainment properties in any medium. For the first-half of calendar 2008, Guitar Hero is still the number one selling franchise in the U.S, and life-to-date we have sold 21 million units of Guitar Hero, versus only 3 million from our nearest competitor. This performance has demonstrated our continued ability to increase our content and expand our reach with more SKUs, more music, and new hardware innovations. Additionally, compared to last holiday, we are focused on quadrupling our local song content for Europe, more than tripling downloadable song content, more than doubling our in-store kiosk presence, and once again leading hardware innovation and supply. In the holiday quarter, we will launch another title for the Nintendo DS -- Guitar Hero Decades, and our next major multi-platform game, Guitar Hero World Tour, which marks yet another significant step forward for the brand, in terms of quality and innovation. Guitar Hero World Tour will transform music gaming through a cooperative band experience that combines the most advanced wireless guitars, drums, and a microphone with new innovative online game play, and introduces an innovative music studio creator that lets players create and share their own music online through GH Tunes, our new online interface. The Guitar Hero consumer has already established that they like to download music, having downloaded more than 22 million songs life-to-date on the 360 and PS3 alone. Beyond continued traditional download capabilities, GH Tunes will now create countless new music experiences our fans can share and enjoy with each other. Guitar Hero World Tour provides a breakthrough range of gameplay, from traditional single player guitar gaming to cooperative band play with multiple instruments, to online music creating and sharing. Presales for this game are already up nearly 30% versus Guitar Hero III at a comparable period of time last year. And finally, we are pleased to announce earlier today an exclusive partnership with Logitech to continue to drive cutting-edge premium hardware innovation to the franchise. Turning now to Call of Duty -- last calendar year, Call of Duty 4 was the number one selling game in units in the U.S and Europe, and our research showed that more than 40% of its consumers were new to the Call of Duty franchise. This will give us an especially strong base this year to sell Call of Duty World at War. In total, we see another strong year for the brand, as Call of Duty 4 is still selling well at original launch pricing, and this holiday we will launch Call of Duty World at War. For World at War, we will bring the intensity of the Call of Duty Modern Warfare experience to a new military theatre in the Pacific, to engage our significantly larger user base. We will launch the grittiest and most realistic Call of Duty ever on all four of the platforms we released on last year, plus we will add the PS2 and the Wii this year. We will provide the enhanced playability consumers have been asking for through cooperative play in both the base game and multiplayer modes, and we will also continue to drive catalog sales with downloadable maps and enhanced Call of Duty 4 retail SKUs that continue to sell at premium pricing. We are very pleased by the game quality of World at War and we are encouraged by early presales that are nearly double those for Call of Duty 4 at a comparable period of time last year, reflecting the significantly expanded audience for this franchise. In addition, we look forward to launching James Bond Quantum of Solace. Surprisingly, this is the first Bond movie game that has ever been launched simultaneously with a corresponding Bond movie. The game uses the Call of Duty 4 engine and technology to bring Bond games to a new level, and we are very pleased with how the game is looking. Combined with the successful reinvention of James Bond at the box office, we continue to increase our confidence about the long-term potential of this brand. This holiday, we will also launch a number of other well-established, successful properties, including: Madagascar 2, Escape to Africa; Spider-Man, Web of Shadows; Crash Bandicoot, Mind Over Mutant; and The Legend of Spyro, Dawn of the Dragon. In total, we have a great holiday lineup and we expect this holiday will be even larger than last year. As we look ahead to calendar 2009, even though it is early, the slate is strong. Our lineup will be anchored by: multiple new Guitar Hero SKUs; an all-new Call of Duty, utilizing our leapfrog studio strategy; and a completely reinvented Tony Hawk. In addition, we will launch Marvel Ultimate Alliance 2 and we will have a number of movie titles, including Marvel’s Wolverine, Transformers 2, DreamWorks’ Monsters versus Aliens, and 20th Century Fox’s Ice Age. We also have a number of other exciting projects in development, including: Return to Castle Wolfenstein; added new intellectual properties, including our first racing game being developed by our newly acquired studio, Bizarre Creations; and exciting new titles called Singularity and Prototype. We will announce our complete slate at a later date. So in summary, we are in a growing market, we have a strong and deep brand portfolio that resonates with this cycle’s strongest genres and strongest platforms, and we have high-quality development resources that have best-in-class sales and marketing expertise. Our company has never been stronger or more profitable. Our record performance continues to highlight the long-term financial opportunities that the interactive entertainment industry has to offer, and there are few companies better positioned for the future than Activision Blizzard. And now, I would like to introduce and welcome Mike Morhaime, the CEO of Blizzard Entertainment.

Thank you, Mike. It’s great to be here. Hello, everyone; I’m Mike Morhaime, the CEO and Co-Founder of Blizzard Entertainment. First, I would like to say how excited we are at Blizzard to be partnering with a great company like Activision. The Activision financial results for the first-half of the year are impressive and when you look at what is driving those numbers, I think it really underscores just how complementary the Activision and Blizzard Entertainment businesses are. While Activision has experienced tremendous growth, the past three years have been pretty incredible for us at Blizzard Entertainment as well. Our contribution to Activision Blizzard encompasses a number of factors. First, we offer tremendous strength in the PC and online spaces, which complements Activision’s strength on consoles. Having a big presence on PC is important, because the platform has a higher installed base and higher margins than any other gaming platform. The facts about user base and margins on PC often get lost in a lot of hype around the gaming industry. That said, World of Warcraft dominates both the PC and online as the number one massively multiplayer online role-playing game in the industry, with 10.9 million active players worldwide. Those players pay recurring fees to play the game, which gives us a continuous stream of revenue. This industry is normally very cyclical, so having a consistent source of revenue helps by making financial performance more consistent and more predictable. We also provide unique expertise in the Asian markets. Millions of people play World of Warcraft and other Blizzard games in Asian markets such as China, South Korea, and Taiwan. No other western publisher has this kind of presence in Asia, and combined with our broad appeal in the North American and European markets, this gives Blizzard Entertainment a global reach that no other publisher can match. We are continuing to reach new territories as well. Last week, we launched the Latin American version of World of Warcraft, and in early August, we will release a Russian language version. We intend to keep spreading Blizzard’s reach to new global markets, as increased broadband penetration around the world brings in new potential players. As for financial aspects of the company, we generate revenue in a number of ways. There are, of course, product sales and subscription revenues, which includes monthly fees from World of Warcraft players, but we are also seeing a significant contribution from value-added services, such as character transfers and name changes in World of Warcraft. These ancillary services not only create revenue but also satisfy demands from players, and work to increase subscriber retention. World of Warcraft: Wrath of the Lich King will be World of Warcraft’s second major expansion pack. We are currently in the beta phase and are planning to release it later this year after thorough testing. The game’s previous expansion, World of Warcraft: The Burning Crusade, was released in January 2007, breaking PC games sales records by selling nearly 2.4 million copies in just 24 hours, and approximately 3.5 million in its first month. Given that subscriber-ship has grown from over 8 million to 10.9 million subscribers since The Burning Crusade’s release, we believe that Wrath of the Lich King has the potential to sell even faster. Aside from new content additions, I would also like to address other reasons why we believe World of Warcraft will continue to grow, despite increased competition. First, there are significant barriers to entry for this genre. It costs hundreds of millions of dollars to not only develop a game as robust as World of Warcraft, but also to create the infrastructure needed in order to support the operation of the game. This includes hardware costs, networking expertise, and hundreds of trained support staff. World of Warcraft is fully localized in eight different languages and we have support centers around the world, with trained staff providing 24/7 service to our players in their native language. On the content side, we have a team of over 100 developers who are continually expanding the game. Any massively multiplayer online game that launches today is not just competing with the amount and the breadth of content that we launched with back in 2004; they are also competing with a product and a service that has been continuously enhanced, expanded, and refined for almost four years now, as well as our years of experience in running the game. As an example, Age of Conan released with some initial success a couple of months ago, and we did see some of our players leave to try the game. However, we have already seen about 40% of those players return to World of Warcraft and we expect even more to come back when Wrath of the Lich King launches later this year. Another competitive advantage is our ability to amortize our development costs across more than 10 million subscribers, spread out over three continents. No other massively multiplayer online game has this kind of global footprint. The size of our user base creates other scale advantages too, such as providing a much larger user base against which to run referral promotions, which have generated millions of subscribers to date. Nobody can sell World of Warcraft better than an active player, so you could say we have mobilized the world’s largest sales force in the form of 10 million satisfied customers. We are also continuing to have great success driving free trial of World of Warcraft, and converting those free trials into paying subscribers at an attractive cost per acquisition. Finally, even the size of our churned user base provides an important advantage, as various win-back initiatives have proven successful in inspiring players to return to the game. The ultimate win-back initiative of course is always new content, so the launch of Wrath of the Lich King will be a substantial driver. It is easy to spend all my time talking about World of Warcraft, but I also want to point out the incredible pipeline of games that we currently have in development at Blizzard. Our portfolio includes StarCraft II, which we first unveiled in May 2007 in Seoul, South Korea. The original StarCraft was the game that put Blizzard Entertainment on the map in Asia, and especially in South Korea, where StarCraft is practically a national sport. In South Korea, StarCraft tournaments are regularly covered on television, with top pro-gamers becoming national celebrities, earning corporate sponsorships and bringing in six-figure incomes. Since the release of StarCraft, we have focused on serving gamers in South Korea and throughout Asia, and every Blizzard release since has been well-received both in the East and in the West. Combined, the StarCraft franchise has sold over 9.5 million copies worldwide. We are also working on the long-waited third entry in our Diablo series of action role-playing games, which we announced at Blizzard’s Worldwide Invitational Event in Paris, France, in late June. The original Diablo has been widely credited with helping to revitalize the role-playing game genre. Combined, previous games in the series have sold over 18.5 million copies worldwide. As with StarCraft II, Diablo III will benefit greatly from our revamped online game service, Battle Net, since the focus will be on cooperative online play. I would also like to point out that sales of the previous StarCraft and Diablo games broke into the top PC games sales charts in the weeks following the announcements of StarCraft II and Diablo III. This activity shows that there is tremendous continued interest in these franchises, that gamers will go back and purchase games that have been out for more than eight years. We do not currently have a release date for either StarCraft II or Diablo III, but we can say that they are heavily in development on both games and we are committed to making sure these games meet and exceed the high expectations of our players. Beyond these, Blizzard has begun staffing on another unannounced massively multiplayer online project but for competitive reasons, we are not able to share any additional information on that project at this time. Our primary focus right now remains on Wrath of the Lich King, StarCraft II, and Diablo III. People often ask us how we are able to consistently create fun, best-selling games. It is not a big secret to us; we are all gamers at Blizzard and we are driven to create games that we ourselves want to play. We are committed to the highest quality in the games we create, because settling for anything else would be a disservice to ourselves, our brand, and most of all, to our players. Though the process can be time-consuming, our peers, the media, and our players respect it. Most of all, our track record speaks for itself, both commercially and critically. Our commitment to our players and to the highest quality is the reason that we have had 10 number one selling games, and this approach has delivered the highest operating margins and the highest shareholder return in the industry. I hope that gives you some insight on the exciting things we have in the works at Blizzard Entertainment and I would like to now turn the call back to over Kristin.

Thanks, Mike. Operator, we would now like to open up for questions but before we do, I understand a few people were dropped from the line for a short period and we want to apologize for that. It seems like we had an unexpected amount of callers coming into the call, and that overloaded the system, so we apologize about that and we will also have the replay up quickly after the call. So with that, Operator, we will take questions and, given the length of the call, we really ask that you limit your questions to one per call. Operator.

(Operator Instructions) First we’ll go to Jeetil Patel at Deutsche Bank Securities. Jeetil Patel - Deutsche Bank: Congratulations on the deal close and welcome aboard to the new team, but a couple of questions; can you I guess talk about the $1.2 billion pro forma number that you were talking about that you are on pace to do for calendar ’08, assuming the deal were closed? If I take the $100 million to $150 million in costs saved, that would imply $1.3 billion to $1.35 billion, assuming no growth in the business next year, and is that a way to think about it? Second, can you just give a sense of, on the $1.20 in earnings that you talked about for calendar 09 when you announced the deal, what type of free cash flow generation would that represent? Would that be equal to that $1.20, or can you just give us a sense of that? Thanks.

Jeetil, first on the first part of the question, on the $1.2 billion; if you recall at the time of the deal announcement, we said $50 million to $100 million, which it was at that time, which now is $100 million to $150 million, impacts both businesses, the Sierra business as well as our business, being Activision and the Blizzard businesses. And therefore, within the $1.2 billion, this includes all of the businesses that we are keeping but of course, as we have announced, we are going to eliminate a lot of overhead at the Sierra headquarters and in other areas of the business, and hence there is a piece of the 100 to 150 already built into the $1.2 billion. So that’s consistent I think with the way we presented it at the time we announced the deal. Then on your question regarding free cash flow and how it relates to the $1.20, a significant portion of our net income obviously is going to translate into free cash flow. The Blizzard business is a high-cash generating business but we have also by now, based on the profitability of our own business, burned through most of our net operating loss carry-forwards and as a result, will be a tax payer going forward, and so therefore historically, our cash flow is very close to our operating income numbers and in the future, it will track more closely to our net income numbers. Michael J. Griffith: A couple of things, Jeetil; so if you think about what we said earlier on the call, the non-GAAP pro forma revenues for this year of roughly $4.9 billion, and the operating income targets are greater than the targets that we set for next year, so what we have accomplished is actually to bring forward into 08 what we had expected for next year. Now, when you think about free cash flow for a minute, one of the things that you will realize is that the Blizzard business, being a subscription business, you have essentially instant conversion to free cash flow. Now, there are going to be buckets that will move around but we are adding a faster conversion component to the business in Blizzard.

Thank you. We will next go to Tony Gikas of Piper Jaffray. Tony Gikas - Piper Jaffray: Thank you, and my congratulations as well, guys. A couple of quick questions; did I hear you correctly that we will get guidance on calendar 09 at the analyst day, or could that come earlier, some revised guidance there? And then maybe Mike could talk a little bit about the seasonality of the revenues for the Blizzard assets. And the third part; as Wrath of the Lich King is expected to launch late this year, will it launch in China simultaneously? And previously, when you had the last expansion set out, how did that grow the user base and how should we look at that going forward when you launch Wrath of the Lich King? Robert A. Kotick: Thanks for that single question, Tony. No, they’re all good questions.

Okay, the first question I think was about seasonality of the World of Warcraft business. Certainly the growth rates have not been constant. There are certain drivers to growth. We have seen stronger growth around our marketing campaigns, holiday season, and the release of new content and so I would expect that trend to continue. We also see growth around our releases in new markets, like I mentioned most recently we launched in Latin America just this past month, and our next market will be in Russia and we are continuing to look at additional markets as they come online, as broadband penetration and economies of some up-and-coming markets make them viable. You asked about the release of Wrath of the Lich King in China. Our desire is to release in China as close as possible to the release elsewhere in the world. We do have to work with getting certain government approvals to be able to do that and so we are working with the government to get those necessary approvals and hope to launch as soon as possible. There was a third question? Although, you are really only allowed one question. Robert A. Kotick: Well, Tony’s been covering the company probably longer than anybody on the call, he’s entitled to two.

What was the third one? I can’t remember.

Thank you. Next we will go to Ben Schachter with UBS. Benjamin Schachter - UBS: Congratulations to all of you as well. A question for Michael Morhaime; Blizzard has been really protective of Warcraft and the other brands that you have. I’m just wondering if you think there is a home for some of these brands, particularly Warcraft, on the consoles and the handhelds? Thanks.

We will continue to be very protective of our brands and our intellectual property and basically, we will look at all the gaming platforms with each of our games and figure out which platforms make the most sense. Currently though, our primary focus is on the PC and there are no plans currently to bring World of Warcraft to any consoles.

Thank you. Next we’ll go to David Joseph with Morgan Stanley. David Joseph - Morgan Stanley: Just a simple question; it looks like your pro-forma non-GAAP guidance for 2008 for an operating margin is about 24% -- how should we think about that going forward? Should we expect that to expand over the next couple of years? And when can we get a little bit more clarity on what you are going to be doing with your cash? I know you mentioned a share buy-back as well as some acquisitions. How serious are we about a share buy-back at this point? Thanks.

David, first on the margins, we are very pleased that the pro-forma margin is already showing about a five-point margin extension, as we have anticipated. We always talked about how the combination is going to sweeten the mix for us and get a significant margin expansion. Now, recognize that the 2008 numbers still show very margin dilutive performance from the Vivendi Games businesses that we retained, because of all the investments against those titles is still sitting in the ‘08 pro-forma numbers here that I have provided you. So looking forward, we continue to be very confident that we can exceed the 25% operating margin goal that we have set at the time of the deal announcement, and there’s additional synergies that are not yet in the $1.2 billion number that we will get to realize, and then there are a whole lot of margin expansion initiatives on our base business that we, Activision Publishing business, that we continue to drive forward, as we have done in the past. And then I think Mike has already spoken to on the Blizzard Entertainment business, the significant margin expansion opportunities there. Now, with regard to the cash, we are not ready on today’s call to talk about our future capital structure but as you know, we have been very successful in deploying our cash in accretive ways to our shareholders. Our strategy on the M&A front is not going to change. We are going to continue to go forward in a very disciplined way and to the extent that we do not think we have ways how we can invest the cash in an accretive way to our shareholders, we will consider the best ways to return them. Robert A. Kotick: But I think you know we have, David, a history of, when it was appropriate, buying back shares. With the cash balances that we have today, that is certainly something that we are considering.

Thank you. Next we will go to Eric Handler with Lehman Brothers. Eric Handler - Lehman Brothers: Thanks very much. As I try to figure out your pro formas for calendar 2008, am I correct in looking at it with -- for your full year, that’s a full year number and you gave essentially your outlook for the back half of the year. If I take the numbers from the proxy for Vivendi’s first quarter and take your March quarter numbers, is that essentially allowing me to sort of back into the rest of the second quarter numbers? Am I looking at that properly?

No, Eric, you are not. What we were intending to do here by providing you the $4.9 billion revenue and $1.2 billion operating income number is an apples-to-apples comparison to what we talked about at the time of the deal announcement. So the $1.2 billion, for example, would not include operations that we are not having in our go-forward business plan. We talked about certain parts of the businesses not being a strategic fit for us, like Vivendi Games Mobile or Sierra Online, and some of the development projects and studios that we will not be carrying in our go-forward plan. But you cannot add up our pro-forma numbers from the proxy, which included the total company Vivendi Games, and get to that same result. Robert A. Kotick: But I think the important point we wanted to establish is that we have seen opportunities for synergies greater than what we originally expected and that we are getting to numbers, both operating income and revenue numbers, earlier than we expected.

Thank you. Next we will go to Evan Wilson with Pacific Crest. Evan Wilson - Pacific Crest Securities: Thanks. You mentioned that your forecast implies a reiteration of the Activision standalone business, yet we had a pretty big beat in the June quarter. Can you talk about potentially what changed in terms of your Activision SKU plan or your plans for this Christmas? Thanks.

No, nothing changed. What we said is our guidance is consistent, which means that we have not changed our September and December numbers, so we have not taken the over-performance of the June quarter out of the back half of the year. The June quarter over-performance would have been additive from -- based on our previous fiscal year guidance, which was ending in March of ‘09.

Thank you. Next we’ll go to Mark Wienkes with Goldman Sachs. Mark Wienkes - Goldman Sachs: Thank you. The simple math on your year-to-date and expected industry growth argues for a slow down in the holiday season. Some of the other publishers expect to see more challenging trends coming up. Are you noticing any slowdowns or hesitancy at all from retailers, and do you worry that the second half becomes a share shift story? Michael J. Griffith: We actually are quite encouraged by what we have seen so far for this holiday and we think there are a couple of trends that are playing to our favor here. The installed base, as we mentioned, is up quite considerably, particularly the next-gen platforms in both North America and Europe. Retailer enthusiasm for supporting the strongest titles continues to grow. If you look at the broad trends of what is winning this cycle versus last cycle in terms of genres, I think we are well-positioned in the music genre, as certainly a growing and emerging genre this cycle versus last. If you look at the quality of the games that we are launching, between Guitar Hero World Tour and Call of Duty World at War, they are excellent. If you look at our early presale numbers, which are up between 30% and 100%, compared to where we were a year ago. I think our portfolio plays well to the strength of this console cycle. Retailers are very supportive of our plans and so we feel very good about going forward into the holiday quarter. Robert A. Kotick: Mark, I think it is definitely worth emphasizing when you look at some of our big releases, like World Tour or Call of Duty, we are seeing significant increases in the preorders as compared to last year. I think Mike Morhaime pointed out that for the Wrath of the Lich King, there actually -- there’s a substantially larger installed base to sell into than they did when they sold Burning Crusade, and so that bodes very well for opportunity, and I also think that retailers are generally focused on the proven franchises that have had great success, that are coming with big marketing and selling programs and I think that we will be the beneficiary of that again this holiday season, like we were last year. And, probably not to dismiss one of the most important things, is that based on where we see the market, we are going to look at another year of 20%-plus growth, which is really significant growth again.

Thank you. Next we will go to John Taylor at Arcadia. John Taylor - Arcadia Investments: I’ve got two housekeeping and then one other one -- have you guys picked a Lich King date, launch date yet? Second one, catalog in the quarter of June, kind of housekeeping. And then, I wonder if you could talk, explain a little bit more about the Guitar Hero business, what you think the U.S versus international mix of that is going to be in 08 and maybe even make a guess at 09 percentages. Thanks.

So the first question was about the Lich King launch date -- we have entered the beta phase and testing is going very well, but there is still a lot of testing and preparation that we need to do before we are ready to lock down a date. But we have said that it will be coming out this year and I can tell you it is not going to come in Q3 -- I’m sorry, it is not going to come in the July to September quarter. John Taylor - Arcadia Investments: Okay.

The catalogue percentage for the June quarter, and again this is Activision standalone, was 45% behind continued momentum on Guitar Hero 3 and Call of Duty 4, that we talked about earlier. Michael J. Griffith: And on the Guitar Hero franchise in total, we continue to see growth in both continents, North America and Europe, on the franchise. Guitar Hero 3 continues to perform strongly, which was launched last year. Guitar Hero On Tour and Guitar Hero Aerosmith are all selling through well. I think in terms of your question on the split, the franchise continues to grow in Europe. Guitar Hero On Tour for the NDS, which launched earlier this month in Europe, is number one on the charts in all major geographies. Guitar Hero 3 also continues to perform well in Europe. It is in the top 10 on the charts in the U.K., and as we would expect, Europe is growing faster than North America, given its smaller base. Having said that, Europe remains a tremendous opportunity for us. I think we had said before that Europe was about 15% of North America revenues on Guitar Hero, and while we are seeing that grow substantially, there is significant upside potential to reach our fair share that we would normally see in a franchise between Europe and North America. So that is why Europe remains a focus and why we have put a lot of energy into improved in-store execution, why we have increased localized song content this coming holiday quarter four-fold over last year, why we have engaged European-based development resources, et cetera. We think that the franchise is healthy but we continue to see a very strong opportunity in Europe that we will capitalize on. Robert A. Kotick: And J.T., one other thing regarding your question for next year, without getting into the product specifics, and obviously for competitive reasons, it is a really strong slate of a combination of new opportunities, new genres, continued focus on the international markets, and so as enthusiastic as we have been about On Tour, Aerosmith, some of the other products we have announced, and World Tour later this year, next year there is a really exciting line-up that should broaden the concept of unleashing your inner rock star to an even bigger audience.

Thank you. Next we will go to Shawn Milne with Oppenheimer. Shawn Milne - Oppenheimer & Company: Thanks for taking my questions. Tom, just a quick housekeeping -- can you give the pro forma impact from the $50 million from the first week of Activision sales that are left out of the merger? And then secondly, if you look at the December quarter revenue guidance, I know you say you had not changed your plans but it is a little bit higher than we were expecting, if I am doing the math right, on the Activision side. It is up about 25%. It looks like with preorders up on Guitar Hero World Tour, you are obviously modeling that franchise up year over year. Can you speak to whether or not you are modeling Call of Duty up? Thanks.

First of all, the $50 million revenue translated into about a $0.01 of EPS, so it is not a dramatic impact on the bottom line. With regard to our guidance, we have previously not broken out the specific quarterly numbers. You could only back into it by making an assumption for the March quarter and looking at our fiscal year guidance, so I do not know what you are specifically starting from. In terms of our own ambitions on Guitar Hero, we certainly believe, based on all the plans that Mike laid out, that we have growth potential on Guitar Hero, and every indication so far suggests that is a reasonable and still conservative approach. On Call of Duty, while we are getting more and more encouraged as the game is getting closer to the finish line and as our marketing efforts have started and as we are starting to see the momentum we have behind presales, there is probably some upside on Call of Duty but at this time, so far we have been following our usual approach and planning pretty conservatively. Robert A. Kotick: I think the only thing I would add is that we are very pleased to see the early presales so strong on the new Call of Duty, being 100% up over where we were last year. Michael J. Griffith: It is probably worth mentioning, Shawn, that when you look at the number of consumers that bought Modern Warfare, who it is the first time that they have owned any of the Call of Duty products, I think it was in excess of 40%. So if you think about that from now an [historical] perspective, those are people who have never owned any other Call of Duty product before and we think that is going to result in new consumers coming into the market for World At War.

Thank you. We will take our final question from Edward Williams at BMO Capital Markets. Edward Williams - BMO Capital Markets: Good afternoon, and congratulations again. A couple of questions; first of all, if you can look at the Activision Publishing business, how much of that is coming from downloadable content currently? And looking forward, I guess this is for Mike and Mike, but do you guys see working with each other to bring some of the Activision properties into the MMO space, such as the Call of Duty or Guitar Hero? And how long might that take? Robert A. Kotick: Well, let me start by saying that on the downloadable content, as you know, it has been a steadily growing and accretive component of our business, although in the grand scheme still relatively small. This year in 08, we expect about $40 million to $50 million of revenue from downloadable content. Most of that comes from Guitar Hero and Call of Duty, with downloadable songs and downloadable maps. In terms of taking Activision Publishing into new areas like MMO genres, that is something that we are examining. We have been interested in, if we can find the right opportunity, and I think now with Blizzard as part of our company we have access to institutional knowledge and specific context and capabilities that will only help us over time.

From the Blizzard perspective, I can tell you that we have an excellent pipeline of games that we are working on but that that is taking 110% of our focus, so I think that the extent we will be talking a lot, I will be talking frequently with Mike and we will see in what ways we can share some of that institutional knowledge. But our focus is going to be on the Blizzard pipeline. Michael J. Griffith: I think probably the area where we are getting the greatest learning and benefit is from Asia. We have historically not had a business in China or Korea. Blizzard has probably the most successful entertainment property from a Western company in Korea and China, and so that is an area where we think there is going to be great upside opportunity. And then, when you talk about that institutional knowledge, there are a whole those of things that are -- whether it is how you manage a persistent state universe with 11 million subscribers, or how you manage credit and collection, or how you train customer support representatives to provide customer service and support 24/7 to that number of subscribers, how you manage 50,000 servers in a server infrastructure, or the databases -- those things are all going to accrue very well to what we do for the Guitar Hero and Call of Duty franchises going forward.

Thank you and at this time, I would like to turn things back to Kristin Southey for additional or closing remarks.

Thank you, everyone, for your time and consideration and we look forward to seeing and talking to you all at our analyst day, which is on September 15th. Thank you.

That does conclude today’s conference. Thank you for participating and have a nice day.