Kristin Southey – VP, IR and Treasurer Bobby Kotick – President & CEO Thomas Tippl – CFO & Chief Corporate Officer Michael Griffith – President & CEO, Activision Publishing Inc. Michael Morhaime – President & CEO, Blizzard Entertainment

Jeetil Patel – Deutsche Securities Ben Schachter – Broadpoint AmTech Edward Williams – BMO Capital Markets Brian Pitz – UBS Heath Terry – FBR Capital Markets Justin Post – Bank of America Colin Sebastian – Lazard Capital Markets

Good day and welcome to the Activision Blizzard’s Fourth Quarter CY 2009 Earnings Conference Call. Today's call is being recorded. At this time for opening remarks and introduction, I would like to turn today's call over to Senior Vice President of Investor Relations, Ms. Kristin Southey. Please go ahead ma'am.

Good afternoon and thank you for joining us today for Activision Blizzard’s fourth quarter and calendar year end 2009 conference call. With me today are Bobby Kotick, our CEO; Thomas Tippl, Chief Corporate Officer and CFO; Mike Griffith, President and CEO of Activision Publishing; and Mike Morhaime, Chief Executive Officer of Blizzard Entertainment. I’d like to remind everyone that we will be making statements that are not historical facts. These forward-looking statements are based on current expectations and assumptions that are not subject to risks and uncertainties. As indicated in the slide that is now showing, a number of important factors could cause the company’s actual future results and other future circumstances to differ materially from those expressed in any forward-looking statements. Such factors include without limitation sales levels, shifts in consumer spending trends, current macroeconomic conditions, the seasonal and cyclical nature of our marketplace, difficulties related to World of Warcraft in China, our ability to predict consumer preferences among competing platforms, declines in pricing, product returns, price protections, product delays, retail acceptance of our products, adoption rate and availability of new hardware and related software, competition, the rapid changes in technology, industry standards and consumer preferences, protection of proprietary rights, litigation, maintenance of key relationships, including the ability of track, retain and develop key employees in studios, which can create high quality head titles, counter-party risks, economic, financial and political conditions and policies, foreign exchange and tax rates and identification of acquisition opportunities. These important factors and other factors that potentially could affect the company’s financial results are described in the company’s Annual Report on Form 10-K for the period ended December 31, 2008 and subsequently filed quarterly reports on Form 10-Q. The Company may change its intentions, belief, or expectation 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 today, February 10, 2010 or to reflect the occurrence of unanticipated events. I would also like to note certain numbers we will be presenting today will be made on a non-GAAP basis excluding the impact of the change in deferred net revenues and related cost of sales, expenses related to equity-based compensation costs, the operating results of products and operations from the historical Vivendi Games businesses that the company has exited or is winding down, costs related to the business combination for doing activation of Vivendi Games, the amortization of intangibles and impairment of intangible assets and the associated tax benefits. Please refer to our earnings release for full GAAP to non-GAAP reconciliation. In addition, due to the fact that our business combination was accounted for as a reverse acquisition, we will be presenting additional non-GAAP information that includes Activision’s standalone results for the periods prior to July 9, 2008, which we refer to as non-GAAP comparable basis. Please refer to our earnings release, which is posted on our Web site at www.activisionblizzard.com for reconciliations and further explanations. There is always PowerPoint overview, which you can access with the webcast and which will be posted to the Web site following the call. And now I would like to introduce our CEO, Bobby Kotick.

Thank you, Kristin. Today, we're pleased to report that Activision Blizzard delivered another quarter in calendar year of better than expected financial results with a record non-GAAP EPS, record non-GAAP operating margin and record cash flow in what was a very difficult economic environment. I’d like to thank our incredibly talented employees around the world whose hard work and extraordinary efforts resulted in the largest quarter delivered by a third-party publisher despite this challenging economic environment. I'm always proud to be associated with our fantastic people and I'm grateful for their continued commitment to excellence in every aspect of our business. This year, in addition to our strong financial performance, we increased our retail share to 16%, a high in the U.S. and in Europe. We executed the largest entertainment launch in our history setting a five-day sell-through record with Call of Duty Modern Warfare 2 which quickly became our third title in the last few years to exceed $1 billion in sales. And we ended the year as the largest third-party digital publisher with the No. 1 online subscription title, World of Warcraft. As we look ahead, we're presented with more market opportunities than ever before. First and foremost, despite these challenges, the retail software business remains large and lucrative for top brands and this isn't going to change any time soon. Within retail, we continue to demonstrate the great content sales and in fact can sell exceptionally well. In 2010, we plan to launch a strong line up of proven properties in addition to exciting new intellectual properties. Second, we're experiencing significant growth in the high margin digital online category which I think merit some more time in our discussion today. As you look at digital, it is important to deconstruct the opportunity into its various layers. Some, such as subscription, PC digital download, downloadable content, and value-added services have immediate and tangible business models along with rapid growth in consumer adoption, but require committed, careful and sometimes significant investment into infrastructure, content and execution. Others, such as social games, social network integration, mobile and portable games, a few you're hearing a lot about today, they're interesting and present brand development and marketing opportunities, although they remain characterized by unproven business models, a lot of clutter, and relatively low barriers to entry. Our focus on and investment into the categories with the highest tangible opportunity have made us the leader in the digital and online sectors. In 2009, we generated the most digital revenue in our industry, approximately 1.3 billion. And we expect further expansion in 2010. This year, our digital growth will come from across our portfolio. First, we plan to launch some of the most incredibly compelling downloadable content for a number of our key titles. For World of Warcraft, we expect to launch the next expansion pack, Cataclysm and continue to grow our player base around the world. And finally, our much anticipated release of StarCraft II, which will also be available for download on the new battle.net site. And that illustrates how we're building significant digital capabilities and that we expect these to present new and unique opportunities for game play. Battle.net represents breakthrough integration of game playing community, customer service and digital distribution of content. Overall, our continued focus and investment in the most attractive digital segments enables lower execution risk and improve near-term financial opportunity. This focus however, does not in any way preclude us from maintaining a solid presence or quickly entering other digital segments as attractive business models emerge. We plan to continue selectively expanding our brands into other digital segments like the iPhone as we did with Call of Duty, and will do with other brands like Guitar Hero. However, today these opportunities are better utilized as a means to connect and impact with and empower our community and extend the brand and less about financial scale or huge financial return. By investing prudently and leveraging the strength of our brands in exploration of these new market categories, we believe we are able to deliver to consumers the games they love while avoiding speculative and sometimes significant investments in categories that have yet to fully form. Our focus on applying the bulk of our resources against the most valuable as opposed to the most active segments of our industry has been vital to capturing share and delivering record profitability during these challenging times. As we enter 2010, we are mindful of the many risks that can impact our results, including the continued uncertainties related to consumer demand and macro economic conditions, changes in the digital and retail environments, and weakness in the casual and handheld segments in which we operate. Overall, we expect to continue to leverage our strengths, our strong brands, our proven operational capabilities, our best-in-class financial position, our ability to expand into growing high margin market categories and our commitment to delivering the best game quality in the industry to our audiences. Our leadership position in both retail and digital provides us with a significant advantage and should allow us to build on our success and continue as the largest third-party publisher in the world. In addition to our strong brand portfolio, our proven operational capability gives us another key competitive advantage. We conservatively model cost and we aggressively manage spending. This approach has allowed us to deliver industry-leading margins throughout this entire console cycle and it should enable us to achieve a record non-GAAP operating margin in 2010 of 29%. Finally, our strategy and capabilities are supported by a very strong financial position. We ended the year with 3.3 billion in cash and investments and no debt, and we continue to put our cash to work, including the announcements we made today, the authorization of our second billion dollar buyback program in two years, and our first cash dividend, both of which reflect our confidence in the future, confidence in the predictability of our cash flows, and our 18-year commitment to industry-leading shareholder value creation. Now I would like to turn the call over to Thomas Tippl, who will provide a review of Activision Blizzard’s financial results for the quarter and a review of our outlook for 2010. Thomas?

Thank you, Bobby. Today, I will begin with a recap of our December quarter and calendar year end results and then I will review our initial outlook for the first quarter and calendar 2010. For your reference, in our press release, are a set of schedules which provide non-GAAP comparables by business segment, and these will be the numbers that I will refer to unless otherwise noted. Also, please refer to our earnings release for GAAP to non-GAAP reconciliation. For the calendar year, GAAP net revenues were 4.3 billion, and GAAP earnings per share were $0.09. The results include a $0.19 per share reduction, the valuation of intangible assets, reflecting the impact of a weaker market on the casual and music genres. On a non-GAAP basis, net revenues for the calendar year were 4 8 billion and non-GAAP earnings per share were $0.69. Despite challenging market conditions and a number of product delays, we managed to exceed the $0.61 outlook we gave last February by 13% and delivered another year of non-GAAP profit and cash flow to record levels. For the calendar year, we further expanded non-GAAP operating margins to 26%, advancing another step towards our stated long-term operating margin target of 30% plus. For the fourth quarter, GAAP net revenues were $1.6 billion. We had a GAAP loss per share of $0.23. These quarterly results include the $0.19 per share reduction in the valuation of intangible assets I mentioned earlier. On a non-GAAP basis, December quarter net revenues were approximately $2.5 billion, 277 million higher than the outlook we gave in November. Non-GAAP EPS was $0.49, $0.06 ahead of our outlook. December quarter was driven by the groundbreaking performance of Call of Duty Modern Warfare 2 in addition to World of Warcraft, DJ Hero, Band Hero, Tony Hawk RIDE and Bakugan. This holiday we again benefited as both consumers and retailers focused their time in dollars on the product with the highest expected return on investments. With respect to the P&L line items in the December quarter, GAAP product costs, including cost of sales for MMOGs were 46% of net revenues. GAAP operating expenses, including the reduction in tangible assets were 81% of revenue, non-GAAP tax rate was 34%. In the December quarter non-GAAP product costs including costs for MMOGs were 37% of net revenues, about in line with our outlook, and non-GAAP operating expenses came in as expected at 28%. Our effective non-GAAP tax rate was 28% in the December quarter, lower than anticipated as we continue to benefit from growth in international geographies, which are subject to lower taxes. Now turning to the balance sheet, on December 31st, we had no debt and approximately 3.3 billion in cash and investments, an increase of about 200 million versus the prior year-end. This is higher than a year ago, despite returning more than a billion dollars to shareholders through stock repurchases. In total we bought back 115 million shares at an average price of $10.87 per share completing our previous buyback program. In today's capital market environment the strengths of our balance sheet is a major competitive advantage, which affords us the ability to allocate capital across a number of strategic initiatives. Today, our Board of Directors authorized an additional $1 billion of share repurchases for 2010. The Board also declared a cash dividend of $0.15 per share, which we expect to be an annual occurrence and not a first or a third-party publisher. Given our strong cash position and expected future cash flow generation we are pleased to further enhance shareholder return with both the buyback and the cash dividend. As you know, creating shareholder value has always been a top priority for the company and we continue to lead the industry in executing against that goal. Additionally, we will allocate capital to our own operating investments within our franchises and on the platform side with offerings such as Battle.net. Finally, we believe the prolong and challenging macroeconomic environment might provide acquisition opportunities for which we are well-positioned with our balance sheet, our more predictable cash flow outlook and the backing of Vivendi as a well capitalized shareholder. Now let me turn to our other key balance sheet positions. The account receivable balance was 739 million on December 31, a decrease of 235 million versus prior year. Inventories were 241 million, down 21 million versus the prior year. At quarter-end, capitalized software development costs were 234 million in line with the prior year. Of the 234 million approximately 95 million is related to deferrals of online-enabled games. Capitalized intellectual property costs were 83 million excluding deferrals capitalized intellectual property costs were 61 million. This is 40 million above a year ago due to payment of advances under our existing license agreement. Finally, in terms of cash flow, in 2009, we generated a record $1.2 billion of operating cash flow, which is more than ten times ahead of our next best competitor. For 2009, we exceeded target we gained in our E3 Presentation in May to convert 85% of net income to operating cash flow, as a result of tight working capital and CapEx management. In summary, our strong December quarter further strengthened our financial position again widening the gap between us and our competition. At the same time, our strong balance sheet puts us in an excellent position to capitalize on investment opportunities for long-term growth. Before turning to our financial outlook, I would like to highlight the few items. Our outlook is subject to significant risks and uncertainties including the risks highlighted in the Company's annual report on Form 10-K for the period ended December 31, 2008 and subsequently filed quarterly report on Form 10-Q. As a result of these and other factors, actual results may deviate materially from the outlook presented today. So, now on to the company's outlook, as we stand historically, we enter 2010 with a reasonably conservative approach due in part to the continued uncertainties relate to the broader macro economic and retail environments and consumer demand in the segments we participate in. We entered the year with strengths in multiple franchises and expect to deliver an exciting high quality slate through continue to direct our resources against the largest and most profitable opportunities and expect to leverage our best-in-class execution both online and offline. As I previewed on our last call, we are focusing on the following key building blocks to drive earnings growth and operating margin expansion in 2010. First, we expect significant growth in our digital online business. The majority of which should come from Blizzard, as we intend to launch StarCraft II with the upgraded Battle.net online platform as well as Cataclysm, the next World of Warcraft massively multiplayer online expansion pack. In addition, we expect our first full year of strong operating performance in China with our new partner and growth in Blizzard digital value-added service. Second, Activision Publishing is expected to release a strong product line of innovated new titles, the diversified line up is expected to include titles based on the best selling franchises in the company's history. Two new intellectual properties and a strong catalogue based on our 2009 top sellers, an exciting new downloadable content, which Mike Griffith will discuss in a moment. Third, we expect to increase the operating income contribution of our music business. We are taking the steps to right size the product offerings and the cost structure to position the business for profit growth, including the transition to a higher mix of software in the future. And finally, we will continue our overall productivity improvement effort in order to expand operating margins while investing into our product pipeline and we are funding those ongoing efforts from within our operating results. So for calendar 2010, we expect GAAP net revenues of 4.2 billion and non-GAAP net revenues of 4.4 billion. Net revenues are expected to be down year-over-year due to changes in our music business as we release a more focused slate and expect fewer sales of higher price lower margin peripherals. More conservative expectations for the Call of Duty franchise based on the record success we had in 2009 and less revenue from our low margin distribution business. We expect to partially offset the anticipate revenue declines with significant growth in Blizzard Entertainment, which I highlighted earlier. For calendar 2010, we expect GAAP EPS of $0.47 and non-GAAP EPS of $0.70. EPS is up year-over-year, despite a higher tax rate assumption as Blizzard’s growth comes with above average operating margin and we expect our music business to be more profitable as a result of higher margin software mix and rightsizing of our cost structure. For the calendar year, we expect GAAP product costs including MMOGs of approximately 31% and operating expenses, including royalties of about 49% of net revenues. We project the GAAP effective tax rate of about 28% and a diluted share count of about 1.29 billion. On a non-GAAP basis, we expect product costs, including MMOGs of 31%. Gross manufacturing margins are expected to expand meaningfully year-over-year due to Blizzard’s high margin PC slate and the mix shift from hardware to software in the music business. We expect non-GAAP operating expenses, including royalties of almost 40% of net revenues. This is higher than a year ago due to our larger publishing slate, which includes a number of new intellectual properties. Also, as we mentioned on our last call, Blizzard is increasing its investment in product development and customer service to drive long-term growth. For the calendar year, we expect a non-GAAP operating margin of about 29%. Yes, another step closer to achieving our long-term goal of 30 plus. We expect to achieve our margin expansion target by focusing on the core consumer at retail combined with a concurrent shift to our higher margin digital segment. We expect our effective non-GAAP tax rate to be about 30% and expect the diluted share count of about 1.29 billion. Now moving to the March quarter; we expect to release DreamWorks How to Train Your Dragon late in the quarter in the U.S. only. That release, in addition to catalog sales and significant revenue deferrals I expect it to generate GAAP net revenues of approximately 1.12 billion. We expect GAAP product costs of 33% of net revenues and operating expenses including royalties of about 36%. We project the tax rate of 28% and the share count of 1.31 billion and GAAP earnings per share of $0.20. For the March quarter, we expect non-GAAP net revenues of 525 million. Revenues will be down versus the prior year due to fewer product releases, the strong sales of higher priced music band bundled in Wrath of the Lich King in Q1 of 2009 and lower distribution revenues this year. We expect non-GAAP product cost of 31% and non-GAAP operating expenses including royalties of 60% of net revenue. We expect the non-GAAP effective tax rate of 30% and the diluted share count of about 1.31 billion. For the quarter, we expect non-GAAP EPS of $0.02. We expect EPS will be down versus the prior year due to the items I just mentioned and expenses related to our large Q2 line up and a higher tax rate. In addition, our earnings will also be impacted by $0.01 to $0.02 of expenses related to productivity initiatives, including the rightsizing of our music business cost structure. Disinvestment is expected to pay off within the year and should generate run rate savings of $30 million to $40 million for 2011. In summary, our combined company strength in the retail and digital/online segment, our continued cost containment efforts and our significant financial strengths leave us looking forward to driving another year of record non-GAAP operating margins and shareholder value creation. So I will now turn things over to Mike Griffith, President and CEO of Activision Publishing,

Thank you, Thomas. Today, I’ll focus my comments on the hardware and software markets, the key strategies that drove our performance in calendar 2009 and the review of key drivers for calendar 2010. First, starting with the review of the hardware market, console sales remain strong in 2009 and as of December 31st, the installed base of hardware in U.S. and Europe for current generation systems and handhelds was 218 million units, an increase of 37% year-over-year. Looking to 2010, we expect the installed base of current generation systems to grow to 265 million, making this cycle the largest ever. By platform specifically, we are projecting the PS3 to be up 9 million units, the 360 to grow 8 million, the Wii to be up 12 million and we expect the DS and PSP handhelds to grow in excess of 18 million units overall. Now turning to software In 2009, total retail software sales in the U.S. and Europe were down 10% due mainly to steep declines in PS2 software sales, as publishers continue to lessen their exposure to the platform, and lower cache rates for the casual consumer, including declines in higher priced peripheral-based games. For 2010, we expect to combine U.S. and European retail software market for the current generation console systems, PS3, Xbox 360 and Wii, will be up low-to-mid-single digit year-over-year. Our software outlook is based on the assumption that retailers will hold AAA launch pricing throughout the year. We also expect that the PS2 segment will again decline significantly and that software for the DS and PSP handhelds will also be down this year. Overall, our exposure to the PS2 and handheld markets are minimal, as they are projected to be less than 10% of our revenues in 2010. So in total, we expect software market sales in the U.S. and Europe will be flat to down mid-single digit. In the year ahead, we also expect that retailers will continue to be selective with their open to buy dollars and will be taking a cautious approach to inventories as they have for the past few years. Once again, we expect this will fuel disproportionate results for the largest propositions. In terms of the digital and online markets, we expect that the U.S. and European sales will grow in excess of 20%, driven by a higher broadband penetration, increased consumer adoption and additional content. We define the digital and online market as subscription, digital game download, downloadable content, value-added services, and mobile. So for 2010, we expect a combined retail and digital and online software markets will be up 5% to 8% in the U.S. and Europe. Now turning to Activision’s performance, for the December quarter, Activision publishing was the number one console and handheld publisher overall in the U.S. and Europe exceeding a 20% share for the first time. During the calendar year in the U.S. and Europe, Activision Publishing increased our share. We had two of the top five console and handheld franchises, Call of Duty and Guitar Hero had the No. 1 game overall with Call of Duty, Modern Warfare 2 created DJ Hero, the highest grossing new IP launch in 2009. And excluding our distribution business, Activision Publishing generated a 21% non-GAAP operating margin. Our success for both the quarter and the year was driven by focusing on three core strategies; smartly expanding our franchise portfolio, focusing our resources disproportionately on the top customers, top retail opportunities, and against our top properties, and increasing our digital and online capabilities. Our continued focus on these core strategies drove our success for the second year in a row despite a tough economic backdrop. We continue to advance our strengths and capabilities, which should continue to drive our long-term competitive advantage. During the holiday season, Call of Duty, Modern Warfare 2 broke all video game sell-through records and to-date has grossed more than $1 billion in worldwide retail sales. There are only a handful of entertainment products that ever reached this threshold, which illustrates the power of focusing on key select franchise. This unprecedented achievement is a result of a well orchestrated and globally integrated approach across the company. Our two-year leapfrog development strategy continues to deliver the goods on this franchise producing exceptional quality in a highly rated game. Our sales and marking teams for the first time successfully leveraged social media to event marketed launch date and engage our broad network of fans around the world. Retailers strongly supported the title with a number of retail funded TV campaigns that hosted over 10,000 midnight store openings in North America alone. And our finance and supply chain teams were able to execute the biggest global launch as measured by the first five days of sell-through in a history of our industry assuring that we had stock when and where we needed it without undue credit risk. In total, we use our learning and experience from this effort to the roadmap for future launches in terms of both effectiveness and efficiency. With respect to new intellectual property, we continue to approach new titles cautiously, and this approach has led to a track record of success with focus on creating new franchises with long-term potential. During the year, we successfully introduced the highly rated DJ Hero franchise, which was the highest grossing new IP launch in 2009, outselling even the Beetles in both the U.S. and Europe. Further highlighting our retail execution in 2009 we expanded our global footprint in the U.S. and Europe. Our category management and customer team initiatives continue to pay dividend as retailers allocated more square footage to our products than ever before. And we gained disproportionate share at the largest retailers in the U.S. and Europe. During this last holiday season, Toys"R"Us featured a dedicated store within a store section in nearly 600 stores across the U.S. and Europe. This new initiative was tremendously successful helping both Toys"R"Us and Activision to build share. And we expect to continue to expand this program with more titles in the coming year. And we’ll continue to work these types of initiatives with other global retailers as well. And finally, during the calendar year, digital online content gained critical mass and is now a viable and highly profitable revenue stream particularly through supplemental digital downloads at PC games and downloadable content on console. For Call of Duty Modern Warfare 2 PC online game downloads reached an all-time high. Additionally, more than 60 million Guitar Hero songs have been downloaded by gamers to-date and the Call of Duty World of War Map Packs have sold more than 8.5 million units in a single year. World of War remains one of the top three titles played over Xbox LIVE even more than one-year since its original launch. On November 20th, we released Call of Duty World at War Zombies for the iPhone, which is one of the top grossing apps worldwide. And recently, we released a light demo version of the game, which was downloaded more than one million times in just seven days. Trial and sample remains an excellent way to create awareness and drive consumers to purchase of the full priced game. We'll continue to advance our position in this emerging space, focusing on accretive margin opportunity, including downloadable content for key games. Overall, we entered 2010 with an exciting and focused slate and a strong catalog. This year we expect to launch the largest slate of proven franchises in our history in addition to two new wholly-owned IPs. And as a foundation, we expect to have robust catalog performance leveraging our strong Q4 launches in addition to meaningful growth in our digital revenues. Now, let me dive into a little more detail on some of our major genres. Beginning with music, the category overall was down significantly in dollars this year in the U.S. and Europe due to major declines in PS2 sales and decreased sales higher priced hardware bundles, particularly on the Wii, where we have seen a weakening in the attach rate to more casual consumers. And although our sell-through overall was down about 35% from a year ago, we strengthened our competitive position in the genre by building share to over 50%. Importantly, in 2009, units sales for Guitar Hero were up on the Xbox 360 and PS3 showing there is still strong demand for music and this is important that these two platforms are expected to have significant increases in their respective installed bases in 2010. In 2010 we are anticipating further declines in the music genre overall as the casual consumer proves less robust and the business naturally continues to migrate from hardware bundles to software only sales. Our strategy is to become more focused against fewer, but bigger proposition and to right size our investment against the opportunity to improve profitability. This year fewer SKUs will service a broader audience. In 2009, we released 25 music SKUs and in 2010 we plan to release less than 10. In 2010, we will not want any PS2 SKUs or a high priced Band Hero product. We are focusing our efforts against two major music base products. One, for Guitar Hero and the other, for DJ Hero, both of which will launch in the back half of the year. This allows us to significantly curtail our development, marketing and G&A costs, while focusing on more meaningful launch programs behind these two titles. In total, we have a sizable opportunity in front of us. We have a large installed base of consumers owning Guitar Hero hardware or candidates to purchase additional software. We have the opportunity to expand to new users, since there are still over 100 million current gen console owners, who have never purchased the game and we have the opportunity to attach to significant new hardware sales, as a key mainstream genre. Now before turning to the first quarter let me also cover an overview on Call of Duty expectations for the year. We’ve consistently grown the Call of Duty franchise revenues year-over-year for the past seven years and we expect to continue our strategy annualizing franchise opportunity. At the same time, we’ve recognized that Modern Warfare 2 was an unprecedented success driven in part by the game quality, our retail and marketing execution and by the relatively friendly competitive environment. We expect to have a more difficult competitive environment this year and therefore, we have not planned on repeating the same level of success as we enjoyed in 2009. That said, we are still bullish on this year’s title and we do see upside potential if we execute well by engaging the much larger set of consumers, who were introduced to the Call of Duty franchise in 2009. Now turning specifically to the first quarter, in late March, we expect to launch How to Train Your Dragon, which is DreamWorks animated feature film and which will be (inaudible). We also expect to continue supporting the sales of our top franchises with new current gen compatible downloadable content for Guitar Hero 5 and DJ Hero. During the second quarter, we expect to release a large line up starting with our new racing IP Blur on the Xbox, PS3 and PC. The racing genre is large and we have a distinctive and compelling proposition. Blur blends the fun and power ups like those in Mario Kart with the realism core gamers appreciate with real cars and real locations. The result, the unique combination that beyond its single player mode redefines competitive online racing action in a way that genre has never experienced. In March, we planned to launch a multiplayer beta that will enable media and consumers to sample how fun the multiplayer experience is and we’re very excited about this title and believe that it delivers a level of competition not seen before in a racing game. We also expect to release Shrek Forever After in May time to the DreamWorks animation upcoming feature film. Singularity, our new first person action game that pits shooter and Sci-Fi fans against the devastating fracture in time and Transformers, War for Cybertron, which is shaping up to be our best Transformers title yet. Now turning to the back half of the year, which is when we expect to release the majority of our titles. Starting with Guitar Hero, as I mentioned earlier, we expect to launch two properties, a new Guitar Hero game and DJ Hero 2, and we'll share more details about these games in the future. In addition, we'll be releasing a game in the $4 billion action genre based on our True Crime franchise. The game blends intense Hollywood style driving with martial arts combat and shoot outs deliver an Asian cinema inspired action thriller. This is a big open world action games that looks to be especially strong and should benefit as this year's competitive window in the genre is Wide Open. We also expect to introduce a new Tony Hawk game. Game ratings for Tony Hawk Ride weren't just high as we would have hoped last year. And in hindsight, it took longer to optimize the hardware leaving less time to develop the software we launched in 2009. Still, play testing and consumer feedback have been very encouraging. The premise of standing on the skateboard and performing tricks that only the pros can pull off is very compelling. This year, with the hardware complete, we’ll be focusing on improving the software in order to unlock the full potential of the board. We continue to believe that this innovative peripheral redefines the skateboarding experience and could potentially have different applications in the future. We also expect to release games based on the Spider Man and James Bond franchises. These are some of the most recognized franchises in entertainment and we're very excited about how the games are shaping up. And finally, this holiday, as alluded earlier, we plan to release a new Call of Duty game. We expect that the global Call of Duty user base will continue to grow driven by expected high attach rates, new sales of hardware and new downloadable map packs, which should continue to keep current players engaged while also attracting new consumers to the brand. The Call of Duty brand has never been stronger. We believe 2010 will be another big and exciting year for the franchise. In addition to our holiday release, we expect solid continued catalog sales from the franchise supported by exceptional marketing programs for the record. In addition to downloadable content, we expect to explore, analyze and pursue opportunities to expand the brand into new geographies, genres and business models. We look forward to sharing more details with you regarding our plans in the coming months. We believe we have the right slate to capitalize on the expected growth in the installed base worldwide and we're well-positioned competitively to leverage our opportunities. And now I’ll turn the call over the Mike Morhaime to discuss Blizzard.

Thank you, Mike. I’d like to begin by recapping the successful year that we’ve had at Blizzard with some discussion of our performance in 2009 as well as fourth quarter results. I will also touch on our situation in China and outline the exciting plans we have for 2010. Overall, we’re very pleased with our performance over the past year. Our non-GAAP net revenue for the year 2009 was about $1.2 billion with an operating margin of more than 46%. For the fourth quarter of 2009, our non-GAAP net revenue was $329 million, with an operating margin of more than 49%. The fact that we've been able to maintain revenue and operating margin at these levels is remarkable, given the current state of the economy and how it has affected the industry and the fact that we did not ship a new game in 2009. The stability of our World of Warcraft business has obviously played a big role, and we currently have about 11.5 million World of Warcraft subscribers. That subscribership is on par with the last time we announced subscriber figures. Our ability to maintain subscribership at this level in a down economy can be attributed to a number of factors First, it reflects a tremendous entertainment value, the tremendous entertainment value that World of Warcraft offers. We believe our players recognize the huge value they get from World of Warcraft, especially when they compare our subscription against the rising costs of cable television and the finite amount of entertainment they could get from other options such as movie or concert tickets. Equally important is the commitment of our development team to continue enhancing the game with fresh new content for players to enjoy. We also benefited from successful outreach marketing efforts in the fourth quarter, with a new TV commercial featuring Mr. T driving record trial and high visibility Black Friday promotions driving World of Warcraft sales volume online and at retail. And last but not least, we introduced some important value-added services in the past year, which we believe have contributed towards player retention. At this point, I would like to provide an update on the current situation with respect to World of Warcraft in China. I want to emphasize that NetEase is operating World of Warcraft normally in China right now as they have been since the relaunch on September 19. I mentioned on the last call that World of Warcraft in China hit an all-time peak concurrency after the re-launch. We are still seeing continued strength in the region, with the game as popular as ever. In celebration of the upcoming Chinese New Year holiday, NetEase is running a spring festival give back campaign. As part of this campaign, NetEase has temporarily suspended new account creations for one week and is rewarding our existing players with 21 hours of free game time, three hours per day. We continue to work hard with our local partner to bring new content to our Chinese players. Wrath of the Lich King is currently under review by the relevant Chinese government authorities and NetEase has been cooperating with the various requests so that we can launch Wrath of the Lich King as soon as possible. Meanwhile, NetEase has resubmitted the Burning Crusades to the JPP for their approval. Now, I would like to discuss the plans we have for 2010, which promises to be the most exciting year in Blizzard’s history. We have two huge product releases planned StarCraft II and the Cataclysm expansion to World of Warcraft. This will be the first time in 12 years that Blizzard is slated to ship two major products in the same calendar year. On top of that we'll also be releasing the revamped Battle.net service which will be the platform of the future for all Blizzard games. I do have some exciting news to share regarding StarCraft II. We are slated to begin closed beta testing later this month. The beta test will be conducted on a global scale including thousands of testers from North America, Europe, Korea, Taiwan, Australia, and New Zealand. We expect a tremendous response from our players and were eager to begin this phase of development as we enter the final stretch before release. Aside from gathering feedback from our players, which is a key step in the development cycle, the beta test will help generate new excitement for StarCraft II, building on the momentum from 2009 when StarCraft II won game of the show in Europe for GamesCon. StarCraft II has also shown up on several most anticipated lists for 2010, including publications like the Wall Street Journal, PC Gamer and Euro Gamer. With StarCraft II continuing to receive wider acclaim and recognition and publication and shows around the world we're very optimistic about our prospects for the game. We are still tracking toward our goal of a mid-2010 release. In addition to helping us fine tune and balance StarCraft II, our upcoming beta test is also important for the development of Battle.net. As we are building Battle.net to be the home of all Blizzard games going forward, this phase of testing will be key preparing the service for launch. We are designing Battle.net to be the premier destination for online gaming. When the service launches alongside StarCraft II it will include several advanced communications features, including the ability for players to chat between StarCraft II and World of Warcraft or between World of Warcraft rounds. Future games like Diablo 3 will plug right into that massive communications network. This is significant because the friend’s network that players have already built with World of Warcraft and Add II [ph] and StarCraft II will carry forward for all Blizzard games into the future. The new iteration of Battle.net will help us effectively grow our community of players as each new game release will build upon the momentum created by previous games. Keeping players connected to their friends at all times, no matter which game they're playing will make the online experience more enjoyable, extending the lives of our games. That brings me to World of Warcraft Cataclysm, which we announced at this past year's BlizzCon. Today I'd like to delve into one of the aspects of the expansion that make especially intriguing as a growth driver for the business. Like previous expansions Cataclysm will introduce some great new content, such as new races, new dungeons and new areas for players to explore. But the feature that makes this particular expansion standout is that we are completely overhauling much of the existing content in the game and bringing it up to our constantly rising design standards. Let me just take a moment to explain why this important. Over the past five years, since World of Warcraft initially launched, our development team has become much more skilled at creating compelling new content for the game. The issue is that much of the low level player content in World of Warcraft today remains the same as it was when we first launched in 2004. New players to the games do not in large part experience the games best content and design until they reach the end game. Our research shows that trial players who play World of Warcraft pass level 10 are much more likely to stick with the game for a long time. Currently, only about 30% of our trial players make it past this threshold. So anything we can do to improve the new player experience is a huge opportunity for us. With Cataclysm we will be overhauling the early gaming experience for players, bringing all of the content in World of Warcraft up to our current design standards and ensuring that even new players to the game will experience the best work of our development team. This will also provide additional replay ability for our veterans players as well. In the long run, we hope that this effort will capture more players and drive continued growth. Development on Cataclysm is proceeding smoothly and we're making great progress due release in the back half of 2010. In parallel with the development on Cataclysm, we’re continuing to create additional value-added services for our players. One of the new services we're looking forward to introducing soon is the ability for players to access the in-game auction house from outside of the game. Currently in World of Warcraft players can use an in-game eBay like service to buy and sell virtual items for in-game currency. This is the auction house and it's been part of World of Warcraft since launch. Soon, we will be introducing a mechanism for players to use the auction house remotely, using the web or mobile devices like the iPhone. Some aspects of this service will be free to use, some will be premium. We haven't finalized pricing just yet so we will be discussing those details at a later date. We will also be expanding upon the World of Warcraft Pet Store that we introduced last quarter. Just this morning, we announced two new virtual pets, the Wind Rider Cub and the Gryphon Hatchling. The players will be able to purchase from the Blizzard online store in the coming weeks. What is unique about these new pets is that players, who purchase them will also receive a plush stuffed animal version of their virtual pet. As I close out the Blizzard portion of the call, I want to summarize the huge year we have ahead of us. Not only are we poised to ship two major products in StarCraft II and Cataclysm, but we will be launching Battle.net to be the home of all Blizzard games going forward. This platform is a cornerstone for the future of Blizzard Entertainment and we're very excited to take the first step toward the future with the beta test of StarCraft II and Battle.net. With StarCraft II and Cataclysm planned for this year and the other three around the corner our product pipeline has never looked stronger. Thanks and I will turn the call back over to Kristin now.

Great. Operator, we'll open up for questions.

Thank you. (Operator instructions) And our first question will come from Jeetil Patel from Deutsche Securities. Jeetil Patel – Deutsche Securities: Great. Thank you. Couple of questions. First of all, I guess on the Blizzard side of the business, you have 11.5 million subs at Blizzard. I guess maybe can you talk about, is it possible that you can get to let’s say 50% growth over the next two years inside that Blizzard business and I guess I mean more specifically, broadly, the Blizzard segment. And then second, I guess other companies in the publishing side of the business seem to have kind of 0% to 5% core publishing margins versus your approach to about 15% to 20%. I guess, can you discuss maybe different or unique about your strategy that allows you to get to double-digit operating margins and sustain that as you have over the last couple years? Thank you.

Okay. Hi, this is Mike. Thanks for the questions. We don’t typically provide guidance for that type of information. I can tell you we have few reasons to be optimistic in 2010. Number one, we're shipping Cataclysm this year. Our growth does tend to be driven by new content and we have some fantastic new content that we're very excited about. We also very excited to have a complete year operating in China with our new partner in NetEase. There is a great momentum around World of Warcraft in China right now. And keep in mind, they still don’t have the Wrath of the Lich King expansion. And then lastly, just want to point out, the industry trends are still on our side with broadband penetration around the world increasing and I think the changes that we're making with the Cataclysm expansion is going to make the game more and more accessible to new players around the world so. Jeetil Patel – Deutsche Securities: Mike, maybe different way to ask that, but you got 11.5 million subs at Warcraft and wasn't asking about more Warcraft, but between Battle.net and StarCraft II, is it possible that you can capture another 5 plus million subs over the next couple of years between usage of the Battle.net platform and StarCraft II?

Okay, I understand. Again, we don't provide guidance in terms of sales forecasts on that level, but we are optimistic that the battle.net service and the content releasing with StarCraft II will bring in new players and will also be able to attract players to each franchise. So somebody may come in through StarCraft II and be exposed to World of Warcraft and vice versa.

Now let me pick up on your publishing margin question. I can't really comment about the performance of our competitors, but I can tell you what drives our strong operating margin performance is really a focus on three core areas. One is, we stay very focused on our largest opportunities. Our largest opportunities in terms of countries, customers, franchises, and we've consistently found a disproportionate return from focusing on areas of strength and size. Second, we continue to be very selective with new intellectual property. And as you look at our track record of new IP compared to others, our track record has been pretty successful, and it’s because we’re selective and narrowly focused, and when we deliver a new IP, we have a pretty good track record. And then finally, I would say we're very disciplined on costs. And we've got a system and performance criteria. We generally reward people based on operating margin and cost discipline, and that’s comprehensive to our entire business model, and those are kind of the three major areas I’d say that drive our margin performance. Jeetil Patel – Deutsche Securities: Congrats.

And our next question will come from Ben Schachter with Broadpoint AmTech. Ben Schachter – Broadpoint AmTech: Hey, guys, congratulations on a great year.

Thank you, Ben. Ben Schachter – Broadpoint AmTech: If you could talk about the StarCraft monetization model, just clarify, what percentage of revenue you expect to come from the initial price versus potential value-added services? And then also what percentage of operating profit in 2009 came from the combination of Blizzard and Call of Duty and what do you think that looks like in 2010? Thanks.

Okay, thanks for the question. We typically don't discuss the business model or pricing details about our games until we get closer to release for competitive reasons, but we have said that we'll tailor the business model in each region in a way that makes sense for each individual market, that won't necessarily be the same in all regions. And I can tell you that as we draw closer to the release, we’ll have more information for you in that regard.

And on your question on the contribution of the various parts of the business, as you know, we disclosed the Blizzard numbers separately, so that was about 45% of our $1.234 billion in non-GAAP operating income. Within Activision, it is fair to say that Call of Duty made a disproportionate contribution based on the size of the success that we have seen, but we also had a number of other successes in the product portfolio. Early in the year, we had a successful launch behind prototype, which game was an owned IP and nicely contributed to the overall profit numbers. We were successful with all of our Guitar Hero launches, Metallica, Smash Hits, DJ Hero has the new IP has been very successful. So, while Call of Duty made a significant contribution, it’s definitely not the only franchise with strengths in the publishing portfolio where just to come back to Jeetil’s question from earlier, we did actually exceed 20 margin this year.

And our next question comes from Edward Williams from BMO Capital Markets. Edward Williams – BMO Capital Markets: Hi, just a couple of quick questions for you. Can you give us an idea as to what your expectations are for the digital/online revenue component in calendar 2010, what’s your growth you expect you guys to receive from that area? And, Mike, if you can comment a little bit qualitatively about World of Warcraft, what sort of churn rates we may have seen in calendar '09 and how that compares to prior years?

Sure. I guess first, with respect to the digital revenue that we expect in 2010, we think it's going to be up double-digit compared to what we experienced in 2009. It does seem to be an emerging and more rapidly growing part of the market. We're disproportionately focused on downloadable content on the subscription services, obviously, and value-added services.

Okay. And regarding the World of Warcraft question, we don’t break out churn rates for competitive reasons. I can say that we had a strong Q4 and that we do see that churn rates are driven by new content, so we remain excited that Cataclysm is going to be coming later this year, and that should impact churn rate as well.

Does that answer your question, Ed? Edward Williams – BMO Capital Markets: Sure. Thank you.

Now, we go to Brian Pitz from UBS for our next question. Brian Pitz – UBS: Hey, thanks a lot. Can you discuss your thoughts on the catalyst that will help the industry growth really get back on track? And (inaudible).

Brian, you’re fading in and out. Brian Pitz – UBS: Sorry about that (inaudible).

Hey, Brian. Brian Pitz – UBS: Yes, I think…

We’re not able to hear you.

And I think he's asking what catalyst do you see in the industry that are going to kind of get it back on track, is that price cuts around E3, before E3 throughout the year, is it impact from some of the motion sensors coming? Any color you have there would be great.

Yes, (inaudible) I love the whole idea that we're now focused on digital revenues, because for the last 20 years, I don't remember when we were focused on analog revenues, but I think one of the things that you see is that the earnings catalyst has actually become a lot of these higher margin opportunities, and those are going to continue to be the catalysts for earnings growth. As far as overall consumption, if you look at consoles, I think you are going to need to see hardware price declines given the economic uncertainties that we have and I think you are going to need to see product innovations. And as you look at some of the new user interfaces that are coming out, I think those are certainly going to deliver some interesting product innovation. I think if you look at our own product portfolio, the features, the functionality, the capabilities that we've talked about a little bit today but that you will see later on in the year, incorporate into our products, these are the catalysts to get consumers really interested and excited about interactive entertainment. And then there is the natural growth that will come from expanding demographics, whether it's through new user interface or the increased addition of social capabilities and gaming. I think if you look at all the categories that we operate in today, in the aggregate, you're likely over the next few years to see some fairly significant growth if you look at the aggregate market for interactive entertainment. Brian Pitz – UBS: Thanks.

And our next question will come from Heath Terry from FBR Capital Markets. Heath Terry – FBR Capital Markets: Great, thanks. Can you give us a sense of what you’re seeing in retail so far this year, particularly now that we’ve started to see some of the bigger franchises were slated to launch this year hit? What kind of impact if any is it having on the catalog sales, particularly of Call of Duty?

Sure. I think overall the retail environment continues to be cautious. We see retailers continuing to play inventories very tight and consistent with tight open to buy dollars. We see the same general trends that we saw in the last quarter of the year playing out in to the first quarter. The retailers continuing to focus on disproportionately on the largest of the opportunities that are out there. And I think that the sentiment in the retail environment in both North America and Europe, I would say, there’s a cautious optimism and there’s a lot more energy being put against trying to put some impactful promotions together to drive consumers back into the store. So, I’d characterize it as optimistic, but it is still a somewhat challenged environment.

Great. Thank you.

Great. Thank you.

Our next question will come from Justin Post from Bank of America. Justin Post – Bank of America: Thanks. Two quick questions. First, when you think about the EPS mix you're guiding to about flat EPS. I think Blizzard is going to be up quite a bit and clearly you’ve said music will be up quite a bit. Could you walk through the headwinds? Is it all Call of Duty or are there some other earnings headwinds as you look at the next year? And then secondly, just on the subscriber mix 11.5, how does that compare to say, a year ago western versus eastern subs? Thank you.

Yes, so, Justin, let me take the first one. Yes, you are right, Blizzard is going to contribute. That's going to be an up elevator. Guitar Hero is going to be part of an up elevator in terms of profit growth. I think the down elevators are more conservative planning assumptions year-over-year on Call of Duty as Mike spoke to earlier. We've also planned, as we always do as act more conservatively, so we have a negative impact there. And then as we talked about, we have a smaller skew count, because we’re no longer investing again product development for games on the PlayStation 2 and also taking a very conservative view on the handheld market based on what we’ve seen over the last year. So, when you add all that up and combine that with a higher tax rate assumption and that’s largely driven by the fact that the legislation for R&D tax credit has not yet passed. And if that passes, there will be some upside to our operative percent tax rate assumption, but I don't think it will be prudent to assume unchanged tax rates in light of effective that’s pending. You add all that up, you get to EPS growth that we have provided in our outlook so far.

In terms of the regional breakdowns on the World of Warcraft subscribership, we don’t provide detailed regional breakdowns, but I can confirm that the rough mix between east and west is about same as it was last year. Justin Post – Bank of America: Thank you.

And our final question of the day will come from Colin Sebastian from Lazard Capital Markets. Colin Sebastian – Lazard Capital Markets: Thanks very much for taking my questions and congratulations on the quarter. First of all, just curious on the plans for the Call of Duty franchise in the coming years whether you’re keeping the same leapfrog strategy with infinity word or perhaps integrating some of the other studios there? And then Bobby, I think you characterized the emerging game platform is speculative. And I'm wondering whether you think the social games could be an exception to that rule just given the remarkable pace of growth and what the barriers exist for Activision to make a run at that market? Thanks.

Good question. Again, social games is like digital revenues to me where games are social, and to be talking about like casual games like Farmville that are in Facebook, the monetization opportunities are still very speculative. And I think we're hopeful; we're spending a lot of time looking at them. I think as we always have in the past, when there is an opportunity for a new platform or a new revenue opportunity, we always pursue it thoughtfully, we've had great success in doing that, and I don't think that any of these new potential platforms is any exception. And I think when you look out at all of these categories, one of the things that you're seeing happen, whether it's with an iPhone or whether it's back to the PC or the eventual browser on the television and I think we are seeing a lot of traction on moving the browser to the television. The one thing that is a critical skill in being able to exploit all these interactive platforms is the ability to make compelling content. And I think when you look at the 8,000 people that we have at the company and the 20-year track record that we have at the company of creating compelling content and doing it in a thoughtful, extremely profitable way that’s focused on providing a return to our shareholders, these new platforms will be no exception. If there is an opportunity to capitalize on some of these new trends in social gaming or in mobile gaming, there’s no better company that's better positioned to capitalize it on it than we are. And I think we've shown that over a 20-year history. Colin Sebastian – Lazard Capital Markets: On the Call of Duty question?

Well, yes, on the Call of Duty question, our strategy continues to be to annualize our key franchises. We've indicated before that Call of Duty is on a two-year development cycle, given the content and the work that needs to go into a high quality game experience. We also have new business models that are potential for the franchise in the future and we've been building capabilities on both the business development side of it as well as the studio side of it. So we remain committed to annualizing the Call of Duty franchise.

And I would say too is that if you think about the success that we’ve had in other product categories on subscription you can get a sense of the direction that we want to take that franchise. Colin Sebastian – Lazard Capital Markets: Great, thanks very much.

And that does conclude our question-and-answer session for today. I would like to turn the call back over to Ms. Southey for any further closing or additional remarks.

Okay. We would like to thank everyone for your time and consideration and support and we look forward to talking to you in the future.

That does conclude our conference for today. Thank you for your participation.