Activision Blizzard, Inc.

(Nasdaq: ATVI)
 Recommendation - Buy

27.24%* $65.97 $83.54

Nasdaq: ATVI 12-month return 3/28/18 per share 12-month price target

$85 $40

$80
$35
$75
$30
ATVI Share Price

$70
$25
$65

$60 $20

$55
$15
$50
$10
$45
$5
$40

$35 $0
3/28/2017 6/28/2017
6/28/2017 9/28/2017
9/28/2017 12/28/2017
12/28/2017 3/28/2018
3/28/2017 6/28/2018
Axis Title

* Includes dividends of $0.40 per share; Source: Yahoo Finance, price data
Business Overview
Timeline of Historical Performance

ATVI’s acquisition of the world’s largest mobile game developer further diversified its product portfolio, attributing $1.3bn in revenue

2005 July 9, 2008 February 23, 2016

ATVI maintains one of the ATVI acquires shares for $5.9bn, ATVI completes its acquisition of
$70 $7,200
world’s top video game creating Activision Blizzard, the King, making it the world’s
product portfolios, with world’s leading video game largest game network with more
various products as publisher
$6,600
than 500 million users
$60 household names
$6,000
$5,400
$50
$4,800

$40 $4,200
$3,600
$30 $3,000
$2,400
$20
$1,800
$1,200
$10
$600
$0 $0
2004
2004
2004
2004
2004
2005
2005
2005
2005
2005
2006
2006
2006
2006
2006
2007
2007
2007
2007
2007
2007
2008
2008
2008
2008
2008
2009
2009
2009
2009
2009
2010
2010
2010
2010
2010
2010
2011
2011
2011
2011
2011
2012
2012
2012
2012
2012
2013
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2013
2013
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2014
2014
2014
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2014
2015
2015
2015
2015
2015
2015
2016
2016
2016
2016
2016
2017
2017
2017
2017
2017
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Business Overview: Console Gaming
2017 Revenue Breakdown Quarterly Revenue ($mm) and % of Total Revenue
$2.5 100%
$2.0 80%
$1.5 60%
$1.0 40%
$0.5 20%
$0.0 0%
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017

Quarterly Revenue ($mm) and % of Total Revenue

$0.8 100%

$0.6 80%
60%
$0.4
40%
$0.2 20%
$0.0 0%
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017

Quarterly Revenue ($mm) and % of Total Revenue

$0.6 100%
80%
$0.4
60%
40%
$0.2
20%
Monthly Average Users (MAUs) (mm) N/A N/A N/A
38.2% 60
$0.0
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017
0%

2017 EBITDA Margin

40
55 49 46 51 48 47 49 55
20
36.6% 0
of 2017 Revenue Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Business Overview: PC Gaming
2017 Revenue Breakdown Quarterly Revenue ($mm) and % of Total Revenue
$2.5 100%
$2.0 80%
$1.5 60%
$1.0 40%
$0.5 20%
$0.0 0%
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017

Quarterly Revenue ($mm) and % of Total Revenue

$0.8 100%

$0.6 80%
60%
$0.4
40%
$0.2 20%
$0.0 0%
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017

Quarterly Revenue ($mm) and % of Total Revenue

$0.6 100%
80%
$0.4
60%
40%
$0.2
20%
Monthly Average Users (MAUs) (mm) N/A N/A N/A
33.2% 60
$0.0
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017
0%

2017 EBITDA Margin

40
20 42 41 41 46 42 40
33
28.8% 0
26

of 2017 Revenue Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Business Overview: Mobile Gaming
2017 Revenue Breakdown Quarterly Revenue ($mm) and % of Total Revenue
$2.5 100%
$2.0 80%
$1.5 60%
$1.0 40%
$0.5 20%
$0.0 0%
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017

Quarterly Revenue ($mm) and % of Total Revenue

$0.8 100%

$0.6 80%
60%
$0.4
40%
$0.2 20%
$0.0 0%
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017

Quarterly Revenue ($mm) and % of Total Revenue

$0.6 100%
80%
$0.4
60%
40%
$0.2
20%
Monthly Average Users (MAUs) (mm) N/A N/A N/A
35.0% 600
$0.0
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017
0%

2017 EBITDA Margin

400
200 463 409 394 355 342
27.9% 0
314 293 290

of 2017 Revenue Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
 Business Overview: eSports
2017 Revenue Breakdown Quarterly Revenue ($mm)
$2.5 100%
$2.0 80%
$1.5 60%
$1.0 40%
$0.5 20%
$0.0 0%
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017

Quarterly Revenue ($mm)

$0.8 100%

$0.6 80%
60%
$0.4
40%
$0.2 20%
$0.0 0%
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017

Quarterly Revenue ($mm)

$0.6 100%
80%
$0.4
60%
40%
$0.2
20%
eSports Industry Audience (mm) N/A N/A N/A
10.5%* 600
$0.0
Q1-20132013 Q1-20142014 Q1-20152015 Q1-20162016 Q1-20172017
0%

2017 EBITDA Margin

400
150 487 550
200 335 380 430
5.7% 0
75 281

of 2017 Revenue 2014 2015 2016 2017 2018P 2019P 2020P 2021P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
* Implicit EBITDA margin, likely a result of startup costs
Industry Overview
 Industry Overview
Porter’s Five Forces Analysis Video Game Publishing Industry ($ bn) Market Share

Very Low Impact $35

Low Impact Industry Rivalry
$30
Moderate Impact Total
High Impact $25
Very High Impact $20

$15 8.5%
14%
$10

$5
Bargaining Power Threat of New 7.8%
of Suppliers Entrants $0
2017 2018 2019 2020 2021 2022 2023

US Console & PC Game Industry ($ bn)

$40
$35
$30
$25
$20
$15 $30.0 $32.0
$27.0 $29.0
$24.0 $26.0
$23.0
$10
Threat of Bargaining Power $5
Substitutes of Customers
$0
2017 2018 2019 2020 2021 2022 2023

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
 ATVI Segment Industries
Console Gaming PC Gaming Mobile Gaming eSports & Alternative Gaming

Console Gaming Industry ($ bn) PC Gaming Industry ($ bn) Mobile Gaming Industry ($ bn) eSports Industry ($ bn)
$45 $45 $100 $2.0
$40 $40 $90 $1.8
$35 $35 $80 $1.6
$30 $30 $70 $1.4
$60 $1.2
$25 $25
$50 $1.0
$20 $38 $39 $20 $92 $1.8
$36 $37 $35 $36 $40 $82 $0.8 $1.7
$32 $34 $34 $33 $34 $34 $73 $1.5
$15 $15 $31 $31 $66
$30 $58 $0.6 $1.2
$10 $10 $51 $0.9
$20 $41 $0.4
$0.7
$5 $5 $10 $0.2 $0.5
$0 $0 $0 $0.0
2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Favorable Market Dynamics
Smartphones (bn) and Internet Traffic Volume (exa/mth) U.S. Per Capita Disposable Income ($ 000’s)

4.0 3.8 600 $50,000

Number of Smartphones (CAGR: 7.2%)
3.5 $48,375
3.5 Internet Traffic (CAGR: 21.2%) 500
3.2
3.0 $46,750
2.9 479.3
3.0 2.7 400
$45,125
2.5 402.4
2.5 2.3 300 $43,500
335.6 $48,890
2.1
278.1 $41,875 $47,204
2.0 1.9 200 $45,580
228.4 $44,395
1.6 $40,250 $43,194
186.5 $42,095
1.5 150.9 100 $41,032
121.7 $38,625 $39,850
78.5 96.1 $37,439 $38,720 $38,989
64.9
1.0 0 $37,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014 2015 2016 2017 2018P 2019P 2020P 2021P 2022P 2023P 2024P

eSports Audience (mm) and Revenue ($ mm) International Opportunity – Asian Games Market ($ bn)

800 $2,500 $45

eSports Audience (CAGR: 17.8%) 717 Asian Mobile Gaming Industry (CAGR: 7.4%)
700 667 $40
eSports Industry Revenue (CAGR: 20.1%) Asian Other Gaming Industries (CAGR: 0.1%)
613 $2,000
600 550 $35
$2,049 $13
487 $1,933 $13 $13
$1,799 $30 $13
500 430 $1,500 $12
$1,650 $13
380 $25
400 335 $1,488 $13
$20 $13
281 $1,188 $1,000 $13
300
$15 $14
150 $906 $24 $25 $26
200 $14 $21 $23
$675 $500 $10 $20
75 $15 $17
100 $463 $5 $11
$194 $325
$5 $7
0 $0 $0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Competitive Landscape and MAUs
Electronic Arts Inc. develops,
Take-Two Interactive Software, Inc.
markets, publishes, and distributes
develops, publishes, and markets
games, content, and services for
interactive entertainment solutions
game consoles, PC , mobile phones,
for consumers worldwide. Take-Two
and tablets worldwide. EA is
is headquartered in New York, NY.
headquartered in Redwood City, CA.

NEXON Co., Ltd. Ubisoft Entertainment SA

develops, operates, engages in the production
and distributes PC online and mobile publishing, and distribution of video
games in countries throughout Asia, games for consoles, PC, smartphones
the Americas, and Europe. NEXON is and tablets worldwide. Ubisoft is
headquartered in Tokyo, Japan. headquartered in Rennes, France.

Nintendo Co., Ltd.,

together with its
subsidiaries, develops, manufactures,
and sells electronic entertainment
products worldwide. Nintendo is 385mm
headquartered in Kyoto, Japan. 2017 MAUs 238mm 84mm 98mm 92mm

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Financial Overview
 Financial Analysis Overview
Strong and Consistent Revenues ($ bn) Margin Expansion via Digital Distribution ($ bn)
$18 Console Games $18 Revenue via Digital Distribution 50%
$16 PC Games $16 Revenue via Retail Distribution 45%
Mobile Games Revenue via Other Distribution
$14 $14 40%
eSports and Alternative Games Operating Margin
35%
$12 $12
30%
$10 $10
25%
$8 $8
20%
$6 $6
15%
$4 $4 10%
$2 $2 5%
$0 $0 0%
2016 2017 2018P 2019P 2020P 2021P 2022P 2023P 2015 2016 2017 2018P 2019P 2020P 2021P 2022P 2023P

Projected Average Metrics EBITDA ($ bn) and Diluted EPS Growth

$8 EBITDA ($ bn) 60%
Financial Metric ‘15A – ’17A ’18P – ’23P
$7 Diluted EPS
Revenue CAGR 14.6% 14.2% EBITDA Margin 50%
$6
Operating Margin (Avg) 22.8% 28.6% 40%
$5
EBITDA Margin (Avg) 37.3% 45.9%
$4 30%
Business Overview
Diluted EPS (Avg) Industry
$1.29 Overview $3.76
$3
Percent Digital Distribution (Avg) 87.5% 20%
68.5%
$2
Percent eSports/Alternative (Avg) 6.7% 23.1% 10%
$1
$0 0%
2015 2016 2017 2018P 2019P 2020P 2021P 2022P 2023P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
 Revenue Growth
The video game and video game publishing industries are projected to experience solid growth throughout the
High-Level Industry Dynamic projection period of our analysis. Historically, ATVI has outperformed industry growth, and we expect this to
continue in the coming years as the Company maintains its position as a global video game leader.

U.S. Video Game1 and U.S. Video Game Publishing Industries ($ bn)
Expanding
Geographic Footprint $160 U.S. Video Game Industry (CAGR: 5.6%)
U.S. Video Game Publishing Industry (CAGR: 6.1%)
$140

Positive Outlook Across $120

Established Segments
$100

Rapid eSports and $80

$143 $151
Alternative Product Growth $128 $136
$60 $116 $123
$109
$101
$40

$20
$24 $26 $27 $29 $30 $32
$22 $23
Robust Revenue Growth $0
2016 2017 2018P 2019P 2020P 2021P 2022P 2023P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
1 IBIS World report ignores mobile gaming within the U.S. Video Game market, ignoring one of the highest growing segments
Revenue Growth
ATVI has already begun tapping into the Asia Pacific marketplace through its acquisition of King and establishment
High-Level Industry Dynamic of Overwatch League, increasing revenue in the region at a CAGR of 42.8% since 2015. Asia is expected to contribute
more than any other region towards the global gaming industry’s projected growth through 2023.

Revenue by Region ($ bn)

Expanding
Geographic Footprint $18 U.S. Revenue (CAGR: 13.1%)
EMEA Revenue (CAGR: 9.3%)
$16
Asia Pacific Revenue (CAGR: 42.3%)
Positive Outlook Across $14 $3.9
Established Segments $12 $3.2
$2.5
$10 $4.2
$2.0
Rapid eSports and $1.5 $3.9
$8 $3.6
Alternative Product Growth $1.2
$3.3
$1.0 $0.9 $3.0
$6
$2.7
$2.2 $2.5
$4 $7.5
$6.0 $6.7
$4.7 $5.3
$2 $3.4 $3.6 $4.1
Robust Revenue Growth $0
2016 2017 2018P 2019P 2020P 2021P 2022P 2023P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Revenue Growth
Below are our projections for ATVI’s well-established revenue streams, including sales from console, PC, and mobile
High-Level Industry Dynamic game products. The global markets for console, PC, and mobile gaming are expected to grow at CAGRs of 1.9%,
3.1%, and 10.0% through 2023. As ATVI is a global leader, we expect it to realize above-average growth.

Well-Established Revenue Streams ($ bn)

Expanding
Geographic Footprint $18 Console Game Revenue (CAGR: 9.9%)
PC Game Revenue (CAGR: 9.6%)
$16
Mobile Game Revenue (CAGR: 13.0%)
Positive Outlook Across $14
Established Segments $12

$10 $4.3
Rapid eSports and $3.5
$8 $3.2
Alternative Product Growth
$2.9
$6 $2.4 $2.7 $3.5
$1.7 $2.1 $3.2
$2.8
$4 $2.2 $2.3
$2.1 $2.0 $2.1
$2 $3.4 $3.8 $4.2
$2.5 $2.4 $2.6 $2.7 $2.9
Robust Revenue Growth $0
2016 2017 2018P 2019P 2020P 2021P 2022P 2023P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Revenue Growth
ATVI expects to enter the alternative product (AR/VR) marketplace within the next several years, and has already
High-Level Industry Dynamic established itself as one of the eSports industry’s first participants. As such, we see growth in these segments to
have more meaningful effects in the projection period’s later years.

Rapid Projected YoY Growth in eSports and Alternative Product Industries

Expanding
Geographic Footprint 180% Console & PC Virtual Reality Industry Growth (CAGR: 47.8%)
Mobile Virtual Reality Industry Growth (CAGR: 78.7%)
160%
eSports Industry Growth (CAGR: 28.2%)
Positive Outlook Across 140%
Established Segments 120%

100%
Rapid eSports and
80%
Alternative Product Growth
129%
60%
100%
40% 83%
70% 64% 68% 72%
58% 56%
48% 50% 44%
20% 41% 42% 35%
26% 33% 25% 29% 27% 27%
Robust Revenue Growth 0%
2017 2018P 2019P 2020P 2021P 2022P 2023P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Revenue Growth
Total Revenue by Platform ($ bn)
High-Level Industry Dynamic $18 Console Game Revenue (CAGR: 8.1%)
PC Game Revenue (CAGR: 7.7%)
$16 Mobile Game Revenue (CAGR: 9.5%)
Expanding eSports and Alternative Game Revenues (CAGR: 48.3%)

Geographic Footprint $14 $3.6

$12 $3.3

Positive Outlook Across $2.7

$10
Established Segments $2.4
$4.3
$3.5
$1.7
$8 $3.2
$0.5 $1.0
$0.4
Rapid eSports and $2.9
$6 $2.4 $2.7 $3.5
Alternative Product Growth $1.7 $2.1 $3.2
$2.8
$4 $2.2 $2.3
$2.1 $2.0 $2.1

$2 $3.8 $4.2
$2.9 $3.4
$2.5 $2.4 $2.6 $2.7
Robust Revenue Growth $0
2016 2017 2018P 2019P 2020P 2021P 2022P 2023P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Operating Income and EBITDA Growth
2015 2016 2017 2018P 2019P 2020P 2021P 2022P 2023P
EBIT $1,320 $1,420 $1,310 $2,220 $2,755 $3,225 $3,897 $4,618 $5,229
EBIT Margin 28.3% 21.4% 18.7% 27.6% 29.8% 30.5% 32.2% 33.5% 33.4%
EBITDA $1,966 $2,370 $2,378 $3,410 $4,132 $4,782 $5,678 $6,649 $7,532
EBITDA Margin 42.1% 35.9% 33.9% 42.3% 44.7% 45.2% 46.9% 48.1% 48.1%

$8,000 EBITDA
60%
EBIT
$7,000
EBITDA Margin 50%
EBIT & EBITDA ($ mm)

$6,000
40%
$5,000

$4,000 30%

$3,000
20%
$2,000
10%
$1,000

$0 0%
2015 2016 2017 2018P 2019P 2020P 2021P 2022P 2023P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
 Digital Distribution Expansion
Company Digital Distribution1 2015-2017 CAGR Company Digital Distribution1 2015-2017 CAGR

14.8% 78.1% 13.3% 49.0% -8.3%

of Projected Margin Growth
Attributable to Digital Distribution 59.3% 6.8% 51.8% 7.2%

Revenue by Distribution Channel ($ bn)

$18 Revenue via Digital Distribution

$16 Revenue via Retail Distribution
Revenue via Other Distribution
$14

$12

$10

$8
$14.2
$6 $12.5
$10.8
$9.3
$4 $7.9
$6.5
$4.9 $5.5
$2

$0
2016 2017 2018P 2019P 2020P 2021P 2022P 2023P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
1 Refers to 2017 percent of revenue that is earned through digital distribution
 EPS Growth
Company TTM EPS1 2022 PEG Company TTM EPS1 2019 PEG
ATVI EPS growth is fueled by digital
$1.39 1.71x $1.32 0.92x
distribution, eSports/alternative revenue,
and favorable macroeconomic factors $3.19 1.87x $1.63 1.08x

Projected Diluted TTM EPS and PEG Ratio

PEG 0.74x 0.34x 1.41x 1.57x 1.71x 1.88x

$6.0
$5.37
$5.0 $4.74
$4.00
$4.0
$3.31
$3.0 $2.83
$2.28
$2.0

$1.0

$0.0
2018P 2019P 2020P 2021P 2022P 2023P

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
1 TTM EPS adjusted for non-recurring tax-related expenses; Source: Yahoo Finance, EPS & PEG Ratio;
Valuation Overview
Valuation Overview

Discounted Cash Comparable

Flow Analysis Companies Analysis
Implied Multiple
Implied Multiple
29.3x EV/EBITDA Implied Multiple

29.3x 29.2x
EV/EBITDA EV/EBITDA

Implied Share Price Implied Share Price

$83.74 $83.37
per share Implied Share Price per share

$83.65
75% weighting 25% weighting

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Discounted Cash Flow Analysis

WACC Assumptions Perpetuity Growth

Equity Risk Premium 7.15% Implied Multiple Global GDP Estimate (50%) 3.07%
20-yr CAGR S&P 500 10.02%
10-yr Treasury Yield

Beta
2.87%

1.250
29.3x EV/EBITDA 12%
10%
8%
6%
Median Unlevered Beta (Comps) .927 Implied Share Price: $83.74 4%
Debt-to-Equity Ratio .44 2%
0%
Cost of Equity (CAPM) 11.81% 2017P 2018P 2019P 2020P 2021P 2022P

U.S.A. (40.0%) Asia Pacific (12.0%)

Weighted Average Cost of Capital South America (10.0%) MEA (8.0%)
Europe (30.0%)
Cost of Debt 2.37%
Weighted Avg Interest on Debt 3.00%
8.66% 10-Year Treasury (50%) 2.87%
Tax Rate 21.00%

Capital Weighting 1 GDPP * (50%)

Equity / Total Capitalization 68.31% Perpetuity Growth Rate
Debt / Total Capitalization 31.69%
2.97%
2 Yield10 * (50%)

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Comparable Companies Analysis

Pre-Discount Comps Results Applied Discount

Implied Multiple Forward Discount

35.5x Implied Multiple 17.87%

EV/EBITDA

Implied Share Price

29.2x EV/EBITDA Discount

Discount per Share

Implied Share Price: $83.37
$101.51 -$18.14
per share per share discount

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Risks Overview
Risks Overview

Probability
Internal Risks External Risks
1 4
Highly Concentrated Threat of
Product Portfolio Emerging Technologies

2 4 5
Failure to Maintain Decentralized Distribution
Significant Market Share 5 and Gaming Networks

2 1
3 6
Failure to Effectively 3 6 Gaming Market and eSports
Integrate Acquisition of King Growth Failure

Impact

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Key Risk Highlights
Concentrated Product Portfolio Threat of Emerging Technologies Decentralized Distribution & Gaming Gaming & eSports Growth Failure

AR and VR Global Market ($ bn) Global eSports Market Revenue ($ mm)

Increased Peer-to-Peer Transactions
$250 $1,800
$1,600
$200 • Decentralized gaming platforms $1,400
provide the ability for developers to $1,200
$150
create content and sell directly to $1,000
215 consumers in a peer-to-peer manner, $800 1,650
$100 1,488
rather than having to go through a $600 1,187
143 906
$50 third-party payment system $400
18 655
$200 493
6 9
$0 $0
2016 2017 2018P 2020P 2021P Secure Data Sharing 2015 2016 2017 2018P 2019P 2020P

• The augmented and virtual (AR/VR) reality • A advantage of decentralized gaming • The global eSports market is forecasted to
gaming markets are forecasted to grow platforms is secure data sharing. grow considerably through the coming five
significantly, reaching an aggregate industry Blockchain technology can enhance years, generating an expected global
revenue of $215 billion by 2021 data sharing and make gaming revenue of $1.6 billion by 2020
• The growth of new, less expensive hardware platforms more secure and efficient • In 2017, the number of frequent eSports
will put virtual and augmented reality viewers and enthusiasts amounted to 143
technology within the grasp of a growing Cryptocurrency Initial Coin Offerings million. This number is projected to reach
number of companies and individuals 250 million in 2021
• Mobile devices are anticipated to emerge as • Decentralized platforms can allow • Due to increased investment and focus in the
the fastest growing platform for the content creators to launch tokens for global eSports market, ATVI has
adoption of AR/VR content within the digital game licenses and in-game digital progressively grown its exposure to
gaming industry assets fluctuations within the eSports market

Business Overview Industry Overview Financial Overview Valuation Overview Risks Overview
Conclusion – Buy Recommendation

Recommendation: Buy 27.24% $83.54

12-month return 12-month price target

Favorable

$83.54 Macroeconomic Trends

x
12-month price target Superior Market
Positioning

Growth-Oriented
Business Model

$65.97
3/28/18 per share