1. Activision Blizzard, Inc. (ATVI) Minjoo Kim, Keng Hoe Wong, Qing Yi Yu, Salta Muslim-Ali, Vincent Yu & Vrushank Vora NME W11: Greg Yun

2. Introduction Largest pure-video game developer/publisher Merger of Vivendi Games and Activision in 2007 Majority Owned by Vivendi SA N.A., Europe & Asia Stock Summary Company Name:Activision Blizzard Stock Symbol:ATVI Market Capitalization: $ 13,404 MM Share Price: $ 11.17 LTM Revenue: $ 4,447 MM LTM Net Income: $ 418 MM Forward P/E:15.5x

3. Product Line

4. Product Line (Continued)

5. Thesis Industry: Growing Chinese Market Move towards digital revenue channels Move towards non-casual games from casual games Company: Consistent trend of quality “hit releases” Ability to innovatively monetize revenue opportunities Commitment to increasing shareholder value Quant: Analysts are undervaluing company due to 4Q failure to meet GAAP revenue expectations Cancellation of Guitar Hero

6. Industry Outlook

7. Industry Trend (Global) 52.9 billion (2009) / 86.8 billion (2014) Projected CAGR of 10.6 Percent Growth in industry MMOG gaming Online gaming Mobile gaming Fig. 1 Media Spending Growth Outlook by Segment from PwC

8. Industry Trend (Regional) Current Generation Console - 23% Growth First-Person Action Genre - 29% growth N.A./Europe sales Wii/Handheld Devices – Decrease in Sales Top 10 titles - 37% of U.S. sales Digital Distribution – 14% Growth in N.A./Europe sales Fig. 2 2010 Revenue Breakdown of Industry from Newsweek Fig. 4 2010 Game Growth by Segment by Newzoo

9. Industry Trend (China) 26% increase in Chinese gamers accounted for 61% increase in 2009 global online game revenue 20.9% CAGR of online game market through 2014 MMOGs account for 77% of online revenue growth Piracy is barrier to entry

10. Company Thesis

11. Revenue Sources/Channels Subscription/Licen sing: 31% Product Sales: 69% Digital Sales: 30% Overall / 20% Growth International Operations: 46% Asia 6% Overall / 32% Growth Fig. 5 ATVI Revenue Growth in 2009 Year-End Data

12. World of Warcraft 12 million subscribers (monthly US / hourly China) / Value Added Services $3.5 million in one day on a virtual horse WoW: Cataclysm was fastest-selling PC game ever Fig. 6 MMOG Breakdown May 2008 Fig. 7 MMOG Subscriptions 2011

13. World of Warcraft (China) 5% of China’s $3 billion MMO market 1.5 million paying customers in first month In 2008, one of three MMOs in China with over 1 million peak computer users (PCU) 5.5 million Asian Users /2.6 million PCU 55% Royalty - NetEase

14. Market Strategy Consolidate energies on high-margin hits WoW & CoD – 62% of Revenue CoD Downloadable Content – $21 million in 24 hours (Record for Xbox Live) Expand in China WoW: Cataclysm CoD: China F2P Digital Growth Fig. 8 US MMOG Breakdown May 2010

15. Competitive Advantages Quality Assurance with Big Recognizable Hits #1 Publisher in N.A. / Europe CoD: Black Ops was #1 Title Worldwide: $1 billion revenue 3/5 Top PC Titles in N.A./Europe In-line with Industry Trends 20% Digital Growth / Only 30% of total revenues Market Leaders in non-casual gaming titles Console Game Leader Crowd Effect Online Community in Battle.net

16. Competitive Advantages (Continued)

18. Future Releases 2012 2011 2012

19. Recent News Canceled Guitar Hero/Tony Hawk Series Laid off 500 Employees Shares dropped 8% on February 10 th Non-GAAP EPS of 53 cents beat 4Q expectations Year End GAAP EPS increased 33 cents Year End Non-GAAP EPS Increased by 15% Quarter End GAAP EPS dropped 20 cents Year End Non-GAAP Revenues 20% Growth

20. Shareholder Strategy 2009: $1.2 billion in shares repurchased 2010: $1.5 billion in shares to be purchased Three-Year Total – $3.7 billion Cash Dividends increased by 10%

21. Portfolio/Investment Risk Factors Deterioration of Economic Condition Controlled Company Lack of Franchise/Hit Diversification GAAP defers increasingly online-generated revenue Current tech holdings PWRD: Perfect World

22. Company Thesis Consistent trend of quality “hit releases”; ability to innovatively monetize revenue opportunities, especially in alignment with the current industry trends; and commitment to increasing shareholder value; demonstrate that ActivisionBlizzard to be a consistently successful leading innovator in the gaming market.

23. Quant Thesis

24. Historical Growth Summary ($ in millions of US dollars)CAGR Fiscal Year Ending: 12/3120062007200820092010 2006- 2010 Revenues $1,388.6 $1,349.0 $3,026.0 $4,279.0 $4,447.033.8% Growth-2.9%124.3%41.4%3.9% Operating Income 73.4 178.0 (40.0) 406.0 798.081.6% Growth142.5%-122.5%96.6% EBITDA 173.7 241.0 345.0 753.0 996.054.7% Growth38.7%43.2%118.3%32.3% Net Income 89.3 228.0 81.0 538.0 747.070.0% Growth 155.2%-64.5%564.2%38.8%

25. Historical Margins ($ in millions of US dollars) Fiscal Year Ending: 12/3120062007200820092010 Revenues $1,388.6 $1,349.0 $3,026.0 $4,279.0 $4,447.0 Gross Margin27.1%67.7%39.2%46.1%52.2% Operating Margin5.3%13.2%-1.3%9.5%17.9% EBITDA Margin12.5%17.9%11.4%17.6%22.4% Net Income Margin6.4%16.9%2.7%12.6%16.8% Assets 1,891.5 2,613.1 14,465.0 13,742.0 13,406.0 Asset Turnover0.7x0.5x0.2x0.3x Return on Assets4.7%8.7%0.6%3.9%5.6% Shareholders' Equity 1,408.9 1,866.4 11,527.0 10,756.0 10,203.0 Financial Leverage1.3x1.4x1.3x Return on Equity6.3%12.2%0.7%5.0%7.3%

26. Historical Financial Health ($ in millions of US dollars) Fiscal Year Ending: 12/3120062007200820092010 Debt $- Shareholders' Equity 1,408.9 1,866.4 11,527.0 10,756.0 10,203.0 Operating Income 73.4 178.0 (40.0) 406.0 798.0 Interest Expense - 3.0 4.0 - Current Assets 1,484.4 2,177.4 5,259.0 5,329.0 5,385.0 Inventory 85.7 153.4 262.0 241.0 112.0 Current Liabilities 441.5 725.7 2,084.0 2,507.0 2,907.0 Debt/Equity0.00 Current Ratio3.363.002.522.131.85 Quick Ratio3.172.792.402.031.81 Interest Coverage No Interest Exp59.33N/A101.50 No Interest Exp

27. Base case Assumptions Historical Financials 20062007200820092010 Revenue GrowthN/A-2.85%124.31%41.41%3.93% Operating Margin5.29%13.19%-1.32%9.49%17.94% Effective Tax Rate24.37%-29.21%200.00%-29.80%9.27% Depreciation & Amortization7.22%4.67%12.72%8.11%4.45% Capital Expenditures1.68%5.04%1.52%1.61%2.18% NWC as % of Revenue17.12%19.50%5.72%-9.89%-23.16% Growth and WACC Assumptions 20112012201320142015 Base Revenue Growth $3,993.6 $4,051.6 $4,375.7 $4,813.3 $5,390.9 Operating Margin18.4% Effective Tax Rate15.8% Depreciation & Amortization3.0% 2.2% Capital Expenditures2.2% NWC as % of Revenue2.0%-4.0%-1.0%0.0%1.0% Tax Rate15.8% Alternative Beta0.65Terminal Growth Rate Assumption2.50% Market Rate9.00%Terminal Shares Outstanding1,200.0

28. Low & High Case Assumptions Low Revenue Growth-15.0%1.0%5.0%7.0%9.0% Operating Margin18.4% High Revenue Growth-10.0%4.5%9.0%11.0%13.5% Operating Margin18.4% Terminal Growth Rate Assumption2.00% Terminal Shares Outstanding1,200.00 Terminal Growth Rate Assumption3.00% Terminal Shares Outstanding1,200.0

29. DCF Output: Base Case Scenario:Base Terminal Growth Rate: 2.50% Terminal Shares Outstanding:1,200.0 Weighted Average Cost of Capital:7.15% Present Value of Forecasted Cash Flows:2,958 Present Value of Perpetual Cash Flows:12,609 Present Value of Total Cash Flows:15,567 Value of Debt:0 Value of Cash:3,508 Value of Equity:19,075 Value of Equity Per Share:$15.90 Range (in %):10% Value Per Share Range:$14.31-$17.49 Current Price of Stock: $11.12 P/V Ratio:0.64x-0.78x Potential Upside:28.7%-57.2%

30. DCF Output: Low and High Case Scenario:DownsideUpside Terminal Growth Rate: 2.00% 3.00% Terminal Shares Outstanding: 1,200.0 Weighted Average Cost of Capital: 7.15% Present Value of Forecasted Cash Flows: 2,500 3,097 Present Value of Perpetual Cash Flows: 10,219 15,206 Present Value of Total Cash Flows: 12,719 18,303 Value of Debt: 0 0 Value of Cash: 0 3,508 Value of Equity: 12,719 21,811 Value of Equity Per Share: $10.60 $18.18 Range (in %): 10% Value Per Share Range:$9.54-$11.66$16.36-$19.99 Current Price of Stock: $11.12 P/V Ratio:0.95x-1.17x0.56x-0.68x Potential Upside:-14.2%-4.8%47.1%-79.8%

31. DCF Sensitivity DCF Valuation Sensitivity Analysis WACC7.15%WACC Sensitivity0.50% Terminal Growth Rate2.50% Term. Growth Sensitivity0.25% WACC $15.906.15%6.65%7.15%7.65%8.15% 2.00% $17.65 $16.08 $14.82 $13.78 $12.91 Terminal2.25% $18.46 $16.71 $15.32 $14.19 $13.25 Growth2.50% $19.39 $17.42 $15.88 $14.64 $13.62 Rate2.75% $20.45 $18.22 $16.51 $15.14 $14.02 3.00% $21.68 $19.13 $17.20 $15.69 $14.47

32. Football Field

33. Comparables Trading Comparables Valuation ($ in millions except for per share data) ATVI MultiplierLow Mult. High Mult.Price (low) Price high)Include? EV/Revenue (2011E)$3,900.000.5x-1.2x$4.43-$6.82Yes EV/Revenue (2012E)$4,540.000.4x-1.1x$4.56-$7.04Yes EV/EBITDA (2011E)$1,434.009.2x-14.1x$13.94-$19.83Yes EV/EBITDA (2012E)$1,727.007.3x-13.3x$13.42-$22.03Yes P/E (2011E) $0.7219.1x-27.5x$13.76-$19.77Yes P/E (2012E) $0.8815.6x-35.0x$13.74-$30.83Yes P/B$0.001.6x-2.6x$0.00- Yes Value Range:$9.12-$15.19 Suggested Premium:-18.0%-36.6%

34. Comparables Valuation Comps ($ in millions except for per share data)ATVIERTSTTWOTHQI Price Per Share $10.95 18.40 16.24 5.61 Market Capitalization 13,140.0 6,151.1 1,521.7 381.1 Shares Outstanding 1,200.0 334.3 93.7 68.0 Estimated EPS (2011E) $0.72 $0.67 $0.85 $(0.28) Estimated EPS (2012E) $0.88 $0.86 $1.04 $0.16 Estimated Revenue (2011E)3,900.03,760.01,110.0803.0 Estimated Revenue (2012E)4,540.03,940.01,290.0861.0 Estimated EBITDA (2011E)1,434.0465.094.0-4.0 Estimated EBITDA (2012E)1,727.0588.0165.028.0

35. Summary Company strength is aligned with industry trends Beginning to capitalize on tremendous market potential in China Leading innovator in the market; consistent history of hits Analysts don’t believe stock can overcome Guitar Hero cancellation

36. Questions?