瑞银-美股-美国互联网服务行业-美国互联网与娱乐业：博彩业评估 43页

'GlobalResearch10October2017USInternet&InteractiveEntertainmentEquitiesUBSEvidenceLab:AssessingtheGamingAmericasLandscapeVolume1InternetServicesEricJ.SheridanAnalysteric.sheridan@ubs.comUBSEvidenceLab:BuildingaPrismtoExamineCurrent/FutureGamingTrends+1-212-7139310PartneringwithUBSEvidenceLab,welaunchaglobalvideogamepanelsurveyacross5BridgetHankeygamingmarkets(US,UK,Germany,Japan,andChina)toprovideacomprehensiveAssociateAnalysthealthcheckontopPC&consolegamingfranchises.Oursurveytracksatotalof5k+bridget.han@ubs.comconsole/PCgamersacrossthe5marketsandprovidesongoinginsightsonthechange+1-212-7133309oftheirgaming&purchasingbehaviorsaswellastheirforwardpurchaseintent.Inaddition,wedevelopaproprietaryscorecardforexistingPC&consolefranchisesbasedonawiderangeofengagement&monetizationmetricstoevaluatetherelativestrengthacrosstitles.Lastly,weleverageoursurveytomonitorkeyindustrydynamicssuchasdigitalpurchases(fullgamedownload,DLC,microtransactions),adoptionforgamingsubscriptions,andeSportsconsumption.3PivotalQs–AnswersPaintaHealthyIndustrywithFutureOptionalityInthereport,westructurethedata/responsesaround3pivotalquestions:1)Howarethekeytitlespositionedforthe"17fall/holidayseason?–keytitlescontinuetosurprisetotheupsideforpurchaseintent(ledbyCoD&DestinyforATVIandFIFA&StarWarsBattlefrontforEA);2)Howareengagement&monetizationtrendingforkeyactiveconsole/PCtitles?–ourpanelpresentsapictureofahighlyengagedglobaluserbasethatengagewithgaming(console/PC)multipletimesaweek(weeklyhabit)formultiplehourspersession.Asaresult,weseealongtailformonetizationtoclosethegapwithengagement;&3)WhatisthestateofadoptionforgamingsubscriptionservicesandeSports?–whileawareness/adoptionremainlowtoday,boththemespresentinterestingoptionalitytodriveLTindustrygrowthifexecution/adoptionareachieved.AdjEststoReflectBetterthanExpectedTitlePerformance&IndustryDynamicsOnthebackofchannelchecks&panelsurveydata,weputforwardourunitestsformajor"17ATVI&EAgamelaunches.ForATVI(Buy,$72PT),weexpectCoD:WWIItosell~19munits(~30%YoYunitsgrowth)andDestiny2tohit~14munits(vs.12m+fortheoriginalgame).Accordingly,weraiseATVIQ3&Q4revenueeststoaccountfor1mincrementalunitsforCoD&Destinyrespectivelyvs.ourpreviousests.ForEA(Buy,$132PT),weexpectFIFA18tosell19munits(&UTrevenuesgrowing~20%YoYinFY18)andStarWarsBattlefrontIItosell15munits–unchangedvs.ourpreviousests.Figure1:UBSUnitEstimatesforMajorATVILaunchTitlesFigure2:UBSUnitEstimatesforMajorEALaunchTitlesFIFA1819CallofDuty:WWII19StarWarsBattlefront215Destiny214MaddenNFL187CrashBandicootTrilogy3NeedforSpeed:Payback5Source:UBSestimatesSource:UBSestimateswww.ubs.com/investmentresearchThisreporthasbeenpreparedbyUBSSecuritiesLLC.ANALYSTCERTIFICATIONANDREQUIREDDISCLOSURESBEGINONPAGE38.UBSdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision. TableofContentsEricJ.SheridanAnalysteric.sheridan@ubs.comGamerPenetration&DemographicAnalysis..................................3+1-212-7139310PivotalQuestion1:HowAreKeyTitlesPositionedfortheBridgetHanAssociateAnalyst2017/Fall/HolidaySeason?...............................................................6bridget.han@ubs.com+1-212-7133309UBSTitleUnitEstimates...............................................................................7PC/ConsoleTitlePurchaseIntent.......................................................................8PivotalQuestion2:HowAreEngagement&MonetizationTrendingforKeyActiveConsole/PCTitles?..................................11TimeSpendTrends....................................................................................12GamerBaseforKeyTitles...............................................................................14GamerEngagementwithKeyTitles................................................................15PlayerSentimentforKeyTitles........................................................................16ConsoleDigitalDownloadTrends...................................................................17DLCPenetration.............................................................................................20MicrotransactionSpend..................................................................................21ActiveConsoleTitleScoreCard......................................................................23ActivePCTitleScoreCard..............................................................................24PivotalQuestion3:WhatIstheStateofAdoptionforGamingSubscriptionServicesandeSports?...............................................25GamingSubscriptionTrends......................................................................26eSportsTrends................................................................................................29ChangeinOperatingEstimates.....................................................33ATVI..........................................................................................................33EA.............................................................................................................35USInternet&InteractiveEntertainment10October20172 USInternet&InteractiveEntertainmentLaunchingUBSEvidenceLabGlobalVideoGameSurveyPartneringwithUBSEvidenceLab,welaunchaglobalvideogamepanelsurveyacross5keygamingmarkets(US,UK,Germany,Japan,andChina)toprovideacomprehensivehealthcheckonkeyPC&consolegamingfranchisesandassessforwardbuyerintentforupcomingtitles.Ourperiodicsurveytracksatotalof5k+console/PCgamers(consumerswhoplaygamesonPC/console/handheldgamingdeviceatleastonceevery7-12monthsandlastplayed4-6monthsago)acrossthe5marketsandprovidesongoinginsightsonthechangeoftheirgaming&purchasingbehaviorsaswellastheirforwardpurchaseintent.10October2017Ourinitialsurveyalsoprovidesasnapshotofmarketdemographicssuchasage,gender,incomedistributionaswellasgamerpenetration.WedevelopaproprietaryscorecardforexistingPC&consolefranchisesbasedonawiderangeofengagement&monetizationmetricstoassesstherelativestrengthacrosstitles.Weleverageoursurveytomonitorkeyindustrydynamicssuchasdigitalpurchases(download,DLC,microtransactions),adoptionforgamingsubscriptions,andeSportsconsumption.VastmajorityofpeopleplayvideogamesinsomecapacityOverlapbetweenPC&consolegamersarehighTotalGamerPenetrationbyMarketPC/ConsoleGamerPenetrationbyPlatform8%10%12%8%42%59%58%62%65%85%84%87%84%74%53%33%33%27%23%4%USUKGermanyChinaJapanUSUKGermanyChinaJapanGameronConsoleonlyGameronbothPCandConsoleGameronPConlySource:UBSEvidenceLab;Note:Onlinepopsampledata,%ofrespondentswhoplaySource:UBSEvidenceLab;Note:console/PCgamerspanelsampledata;US,UK,gamesonPC/console/handheldgamingdeviceatleastonceevery7-12monthsandlastGermany,Japansamplesize~1kpermarket,Chinasamplesize~1.3kplayed4-6monthsago3 USInternet&InteractiveEntertainmentDemystifyingthePC/ConsoleGamerDemographicsPC/Consolegamerbasearediverseinage,gender,incomelevel&occupation.Contrarytopopularbelief,femalesmakeupalmosthalfofthegamerbaseacrossmarketsandstudentsareonlymid-teens%ofthebaseaccordingtooursurvey.GamersskewtowardstheolderdemographicsindevelopedContrarytopopularbelief,almosthalfofthegamerbasearemarketswhileChina"sgamerbaseisnotablyyoungerfemale,whichisaconsistenttrendacrossmarketsGamerAgeDistributionAvgAgeGamerGenderDistributionUS31%35%34%3110October201743%46%45%46%46%UK27%36%37%31Germany23%37%40%32China35%53%12%2757%54%55%54%54%Japan23%42%35%3118-2425-3435-44USUKGermanyChinaJapanMaleFemaleGamersskewtowardslowerincomegroups,especiallyforMajorityofgamersarefull-timeemployed;studentsonlymakeChinaupmid-teens%ofthebaseGamerIncomeDistributionGamerEmploymentDistributionOther30%11%9%16%14%13%41%Student51%51%65%Unemployed52%Homemaker/retired43%76%34%32%64%60%59%Employedpart-time26%46%Employedfull-time/15%18%16%17%9%Self-employedUSUKGermanyChinaJapanUSUKGermanyChinaJapanHighMiddleLowSource:UBSEvidenceLabNote:PanelsampletrackPC/consolegamersonly;mobileonlygamersareexcludedfromthepanel.Forincomesegmentation,US(high:>$100K,middle:$40K-99K,low:<$40K),UK(high:>£50K,middle:£20K-49K,low:<£20K),Germany(high:>60KEUR,middle:30K-59KEUR,low:<30KEUR),China(high:>=RMB15K,middle:RMB7K-14.9K,low:7mnJPY,middle:3mn-6mnJPY,low:<3mnJPY).4 USInternet&InteractiveEntertainmentGamingIsaWeeklyHabitGamingisaweeklyhabit–console/PCgamersonaverageplay~3-4timesaweek.Vastmajorityofthesegamersalsoplaymobilegamesandtheirgamingfrequencyonmobileisslightlyhigherat~4-5timesaweek.Console/PCgamersplayonaverage~3timesaweekinUS,UK,andGermanybutmoreoften(~4timesaweek)inAsiamarkets.Notsurprisingly,oldergamersplayslightlylessoftenthanyoungergamersandfemalegamersplaylessoften(about1timelessperweek)thanmalegamersacrossmarkets.Vastmajorityoftheseconsole/PCgamersalsoplayonmobileacrossmarketsbutJapanhasthehighestpercentage(~36%)of10October2017console/PCgamersthatarenotplayingmobilegames.Gamers"playingfrequencyonmobileisslightlyhigher(about1timemoreoften)thanonconsole/PC.GamingFrequencyonconsole/PCGamingfrequencyonMobile(amongconsole/PCgamers)AvgFrequencyAvgFrequency(timesperweek)(timesperweek)US71%18%3.3US68%14%4.1UK75%17%3.1UK70%9%3.5Germany77%15%3.2Germany76%6%3.8China88%9%4.2China92%1%4.8Japan77%16%3.7Japan58%32%4.7Atleastonceaweek1-3timesamonthLessoftenAtleastonceaweek1-3timesamonthLessoftenNotatallSource:UBSEvidenceLab5 USInternet&InteractiveEntertainment10October2017PivotalQuestion1:HowAretheKeyTitlesPositionedforthe2017Fall/HolidaySeason?Keytitlescontinuetosurprisetotheupsideintermsofpurchasingintent–ledbyCoD:WWII&Destiny2forATVIandFIFA18&StarWarsBattlefront2forEAKeyfranchisescontinuetoattractnewplayers–vastmajorityofgamerswhoexpressedinterestinplayingthemajornewgamelaunchesarenotcurrentplayersofthefranchises6 USInternet&InteractiveEntertainmentUBS2017TitleSlateUnitEstimatesOnthebackofourindustrychannelchecksandpanelsurveyresults(tobepresentedlaterindetails),wepublishourtitleunitestimatesformajor2017ATVIandEAgamelaunches.WeexpectCallofDuty:WWIItosell~19munits,a~30%YoYincreasefromInfiniteWarfare(14-15munits)onthebackofpositivegamersentimentforbootsonthegroundandanactiveCoDcommunity.WeexpectDestiny2tosell~14munitsvs.12m+unitsfortheoriginalgame.Destiny2enjoyedastrongconsolelaunch,reaching1.2mconcurrentplayersthefirstweekend.WeexpectlaunchingonPCandhavingarobustcontentpipelineforpostlaunchmonetizationtoprovidesignificantboosttothefranchiserevenues.10October2017WeseeStarWarsBattlefront2tooutsellthepreviousgameby~2munits(foratotalof~15munits)givenpositivegamerfeedback(&additionofasingleplayercampaign)andstrongpurchaseintent.Onthebackofthefranchisemomentumandastablegamerbase,weexpectFIFA18tosell~19munits(vs.18-19munitsforFIFA17)withUltimateTeamrevenuesgrowing~20%YoYforFY2018.ActivisionBlizzard2017LaunchTitleUnitEstimatesElectronicArts2017LaunchTitleUnitEstimatesFIFA1819CallofDuty:WWII19StarWarsBattlefront215Destiny214MaddenNFL187CrashBandicootTrilogy3NeedforSpeed:Payback5Source:UBS7 USInternet&InteractiveEntertainment2017PC/ConsoleLaunchTitlePurchaseIntentSelf-reportedpurchaseintentshowsstrengthforAssassin"sCreed:Origins,CallofDuty:WWII,SuperMarioOdyssey,andFIFA18withroughly1outof4gamersindicatingsomeinterestinbuyingthetitles.StarWarsBattlefront2andDestiny2aresecondinline,tracking~25%lessgamersexpressinginterest.PurchaseIntentforMajor2017Fall/HolidayTitlesAssassin"sCreed:Origins9%15%Assassin"sCreedtakesthecrownforthisyear"snewgame10October2017launches(24%expressinginterestinpurchasingthetitle)butCallofDuty:WWII9%14%CoD:WWII(23%)andSuperMarioOdyssey(23%)arecloseSuperMarioOdyssey9%14%runner-ups.thFIFA1811%11%Despiteranking4ontotalpurchaseintent,FIFA18hasthehighestpercentageofgamersindicatingtheyare"verylikelytoStarWarsBattlefront27%12%buy"thetitle,demonstratingstrongbrandloyaltyandattestingtoDestiny26%12%thestickinessofsportstitles.TheSims4(consoleversion)6%10%StarWarsBattlefront2andDestiny2areclosecompetitorsforsecondtierofpurchaseintent,tracking~25%lessgamerinterestCrashBandicootN.SaneTrilogy5%10%thanthetop4titles.NeedforSpeed:Payback4%10%Sims4(consoleversion)andCrashBandicootremasteredMaddenNFL185%8%(alreadylaunchedonJune30)showstrongmomentumfornostalgiatitles.NBA2K184%8%WewillbemonitoringthechangeinpurchaseintentforthekeyStarCraft:Remastered3%8%franchisesinfuturewavesofthesurvey.NBALive183%8%NHL183%8%VerylikelytobuySomewhatlikelytobuySource:UBSEvidenceLabNote:Amongallgamersinthepanel;%"verylikelytobuy"+%"somewhatlikelytobuy"8 USInternet&InteractiveEntertainmentKeyFranchisesContinuetoAttractNewPlayersOurdataindicatesthatkeyATVI&EAAAAfranchisesarecontinuingtoattractgamersoutsideoftheirexistingplayerbase.CoDandFIFAhavethehighest%ofexistinggamersexpressinginteresttoplaynextcomparedtoDestiny2,Battlefront2,andMadden18.Vastmajorityofgamerswhoexpressedinterestinplayingthemajornewgamelaunchesarenotcurrentgamersofthefranchises,indicatingpotentialfortheseestablishedfranchisestocontinueexpandingsales.Amongthetitles,StarWarsBattlefront2andFIFA18farethebestforpotentialgamerpoolexpansion,followedbyDestiny2.10October2017CoDappearstohavethemoststablegamerbasewhileMaddenseemstostruggle(vs.othertitles)toretainexistinggamers&attractnewgamers.%ofExistingGamersIndicatingInterestinPlayingthe%ofGamersInterestedinPlayingtheNextGamethatAreGameNextnotaCurrentPlayer67%67%62%49%45%55%51%28%30%29%CoD:WWIIFIFA18MaddenNFL18Destiny2StarWarsStarWarsFIFA18Destiny2MaddenNFL18CoD:WWIIBattlefront2Battlefront2Source:UBSEvidenceLab9 USInternet&InteractiveEntertainmentHowCompellingAretheUpcomingGames?Togaugerelativegamersentiment,weaskedourpaneltorateeachoftheupcomingorannouncedtitleonascaleof0to10(0beingnointerestinplaying,10beingamustplay).SuperMarioOdysseyscoredthehighest,followedbyAssassin"sCreed:Origins.AmongATVIandEAtitles,CoD:WWIIandFIFA18areneckandneckforoverallsentiment.8%&9%ofgamersratedCoD:WWIIandFIFA18asamustplayrespectively–onparwiththetoptwogamesonthesentimentchart.Despiterankingatthemiddleofthepack,Destiny2enjoyedastronglaunch–reaching1.2mconcurrentplayersduringthefirstweekend(evenwithoutPClive).10October2017EA"snewBioWareactionadventureIPAnthemdidnotyieldstrongresultsbutwebelievethisismainlyduetoalackofdetailsonthegame(gamewillbelaunchedinfall2018).%ofGamersRatingtheGameCompellingoraMustPlayMustplayCompelling(10)(8-9)16%15%14%13%11%13%10%12%12%11%9%9%9%9%9%8%7%7%8%8%8%9%7%7%4%5%4%4%4%4%4%3%3%2%2%3%2%1%UFC3FIFA18NHL18AnthemDestiny2NBA2K18NBALive18MaddenNFL18CallofDuty:WWIISuperMarioOdysseyStarWarsBattlefront2StarCraft:RemasteredAssassin"sCreed:OriginsRedDeadRedemption2NeedforSpeed:PaybackMassEffect:AndromedaTheSims4(consoleversion)CrashBandicootN.SaneTrilogyAverageforallsurveyedfranchisesSource:UBSEvidenceLabNote:"Foreachtitle,plsindicatehowcompellingornot(onascaleof0to10)itisforyoutoownandplaythetitle?"–0:don"twanttoplay,10:mustplay10 USInternet&InteractiveEntertainment10October2017PivotalQuestion2:HowAreEngagement&MonetizationTrendingforKeyActiveConsole/PCTitles?Videogameshaveahighlyengagedglobaluserbase–gamersplayonconsole/PCmultipletimesaweek(weeklyhabit)formultiplehourspersessionWeseealongtailformonetizationtoclosethegapwithengagement11 USInternet&InteractiveEntertainmentTimeSpendonConsoleGamingConsolegamersonaverageplay~3.5timesaweekandspendonaverage~3.4hoursplayingeachtime.Wewillbemonitoringthesetwometricsinourfuturesurveytomeasurethegrowthofgamingtimeonconsole.Groupaveragesimplygamersspendroughly~12hoursperweek(or~1.7hoursaday)onconsolegames.Easternplayerstendtogamemoreoftenbutinshortersessionscomparedtowesterngamers.InChinaandJapan,~30%ofconsolegamerbaseplayvideogamesdaily.Germanystandsoutforhavingthelowest%ofdailygamers(atonly~13%).10October2017Vastmajorityofgamersspend2-4hoursonconsoleeachtimetheyplay.UKhashighestaveragesessiontimeamongallthemarkets(~4.2hours).GamingFrequencyonConsoleAverageSessionTimeonConsoleDAU/MAUAvg(hrs)Allgamers22%51%20%24%Allgamers18%63%13%3.4US21%49%20%23%US17%60%16%3.9UK20%51%21%22%UK15%62%13%4.2Germany13%57%20%14%Germany13%67%14%3.6China31%48%16%33%China21%64%13%2.8Japan29%43%20%32%Japan27%63%9%2.5DailyWeeklybutnotdailyMonthlybutnotweeklyLessoftenLessthan2hours2-4hours5-9hours10hoursandaboveSource:UBSEvidenceLab12 USInternet&InteractiveEntertainmentTimeSpendonPCGamingPCgamersonaveragealsoplay~3.5timesaweekbutgameslightlylongereachtime(average~3.7hours)comparedtoconsolegamers.WewillbemonitoringthesetwometricsinourfuturesurveytomeasurethegrowthofgamingtimeonPC.Groupaveragesimplygamersspendroughly~13hoursperweek(oralmost1.9hoursaday)onPCgames.Similartoconsole,easternplayerstendtogamemoreoftenbutinshortersessionscomparedtowesterngamers.InChinaandJapan,almosthalfofPCgamerbaseplayvideogamesdaily.UKstandsoutforhavingthelowest%ofdailygamers(at~19%).10October2017Similartoconsole,vastmajorityofgamersspend2-4hoursonconsoleeachtimetheyplayalbeitthegroupaverageis~0.2hrs(or12minutes)higherthanonconsole.GamingFrequencyonPCAverageSessionTimeonPCDAU/MAUAvg(hrs)Allgamers29%51%16%41%Allgamers12%66%15%3.7US30%39%21%43%US11%59%19%4.4UK19%54%23%23%UK13%61%14%4.4Germany27%54%15%37%Germany7%67%17%4.2China34%53%10%52%China12%73%13%3.0Japan31%48%16%45%Japan26%58%13%3.0DailyWeeklybutnotdailyMonthlybutnotweeklyLessoftenLessthan2hours2-4hours5-9hours10hoursandaboveSource:UBSEvidenceLab13 USInternet&InteractiveEntertainmentGamerBaseforKeyTitlesAmongourpanelrespondents,GrandTheftAutoV(GTAV)hasthelargestactivegamerbaseonconsole,followedbyFIFA17,Assassin"sCreed,andCallofDuty(CoD).ForPC,LeagueofLegends,GTAV,andAssassin"sCreedaretopofthechartintermsofgamerbase,followedbyFIFAandCoD.DespiteInfiniteWarfareunderperformedfor2016holidayseason,theCallofDutyfranchisegamerbaseremainsstablewithBlackOpsIIIstillseeingsizeableengagementtwoyearsafterlaunch.OverwatchhasshownstrongmomentumonbothPCandconsole1½yearsafterlaunch;itsPCgamerbasealoneisclosingthegapswithWorldofWarcraft(WoW)butstilllaggingbehindthetopeSportstitleLeagueofLegends(LoL).10October2017DestinyandStarWarsBattlefrontenjoyroughlythesamesizeofgamerbaseonconsole;DestinylaunchingonPCthisyearshouldprovideaboosttoitsgamerbase.Interestingly,thisyear"sPCbreakoutgamePlayerUnknown"sBattlegrounds(PUBG)hasnotshownitsstrengthonourchartvs.legacyPCtitles.Webelievethisisduetotherelativeinfancyofthetitle(gamestillinearlyaccess&havenotadvertised)concentratesitsexistinggamerbasetowardshardcoregamerswhileoursurveyattemptstocapturebroadervideogameaudiences.Wewillbemonitoringthistitle"sprogressclosely.%ofGamersPlayingConsoleTitlebelowin2017%ofGamersPlayingPCTitlebelowin2017GrandTheftAutoV16%LeagueofLegends16%FIFA1715%GrandTheftAutoV16%Assassin"sCreed15%Assassin"sCreed16%CallofDuty(allthreeactivegames)12%FIFA1715%CallofDuty(allthreeactivegames)13%CallofDuty:BlackOpsIII10%CallofDuty:BlackOpsIII12%Battlefield19%WorldofWarcraft12%FinalFantasyV9%Overwatch11%CallofDuty:InfiniteWarfare8%Diablo311%Overwatch7%Battlefield111%Destiny7%TheSims411%StarWarsBattlefront7%CallofDuty:InfiniteWarfare8%CallofDuty:ModernWarfareRemastered6%Starcraft28%TheLegendofZelda:BreathoftheWild6%FinalFantasyV8%NBA2K175%StarWarsBattlefront7%MaddenNFL174%CallofDuty:ModernWarfareRemastered6%RedDeadRedemption4%Hearthstone5%CrashBandicootN.SaneTrilogy4%Titanfall24%Titanfall23%NBA2K174%MassEffect:Andromeda3%HeroesoftheStorm3%MassEffect:Andromeda3%Source:UBSEvidenceLabPlayerUnknown"sBattlegrounds3%Note:Resultscombiningallmarkets;wedefineaplayerforaspecifictitleasonewhohasspentmorethan2hoursplayingsuchtitlein2017.14 USInternet&InteractiveEntertainmentGamerEngagementLengthforKeyTitlesOnaverage,gamersplayaAAAtitlefor~5monthsonconsoleand~6monthsonPC,demonstratingtheshiftofvideogamebusinessmodelfromahit-driven,short-durationinteractionmodeltoamediaconsumptionmodelwheremonetizationislayeredontopofprolongedengagement.WelayoutourthoughtstothistransitioninmoredetailsinourJunedeepdive.NotsurprisinglyGTAV(openworldgenre)seesthelongestengagementonconsoleandWoW(MMOgenre)&LoL(MOBAgenre)seesthelongestengagementonPC.Aheadofthenewgamelaunchesthisfall/holidayseason,BattlefrontseeslongerperiodofengagementamongplayerscomparedtoDestinyonconsole.OverwatchranksinthemiddleofthepackforbothconsoleandPC–agoodreadthroughforthegamegivenit’sa10October2017brandnewIPonlylaunchedlastyear.BlizzardshowsstrengthonPCengagementwithnewertitles(Hearthstone&HeroesoftheStorm)andclassics(Diablo3&StarCraft2)AverageLengthofPlayonConsole(inMonths)AverageLengthofPlayonPC(inMonths)Averageacrossallsurveyedfranchises4.7Averageacrossallsurveyedfranchises5.8GrandTheftAutoV8.3WorldofWarcraft10.7RedDeadRedemption7.1LeagueofLegends9.3Assassin"sCreed6.9GrandTheftAutoV7.8StarWarsBattlefront5.5Hearthstone7.6FIFA175.4Diablo36.9CallofDuty:BlackOpsIII5.3TheSims46.4Destiny5.1Assassin"sCreed6.3MaddenNFL175.0Starcraft26.2Overwatch4.3HeroesoftheStorm5.9Battlefield14.1Overwatch5.5FinalFantasyV4.0StarWarsBattlefront4.8CallofDuty:InfiniteWarfare3.9FIFA174.6MassEffect:Andromeda3.6Battlefield14.5CallofDuty:ModernWarfareRemastered3.5CallofDuty:BlackOpsIII4.4Titanfall23.3NBA2K174.0TheLegendofZelda:BreathoftheWild3.2NBA2K173.2FinalFantasyV3.7CrashBandicootN.SaneTrilogy1.7Titanfall23.4MassEffect:Andromeda3.3CallofDuty:InfiniteWarfare3.2Source:UBSEvidenceLabCallofDuty:ModernWarfareRemastered2.6Note:Resultscombiningallmarkets;Q:"ForhowlonghaveyoubeenPlayerUnknown"sBattlegrounds2.0playingthefollowingtitle?".15 USInternet&InteractiveEntertainmentPlayerSentimenttowardsKeyActiveTitlesTogaugerelativegamersentiment,weaskedourpaneltoratetheenjoymentforeachgameonascaleof0to10(10beingthoroughlyenjoying).Majortitlesappeartohavesimilar&stablegamersentimentamongtheirrespectiveplayerbase.%ofTitleGamerBaseRatingtheGameHighlyEnjoyable(Console)70%Thoroughly(10)Enjoyable(8-9)60%50%Onconsole,Destiny"ssentimentwasnoticeably10October201740%30%lowerthanotherAAAtitles.Webelievethis20%couldbeduetooursurveybeingfieldedright10%aroundDestiny2launchandgamersmigrating0%Vtothenewgame.AverageFIFA17DestinyZeldaandGTAVappeartohavethehighest%NBA2K17OverwatchTitanfall2Battlefield1Warfareofengagedgamers(ratingthegamea"10"forTrilogyAssassin"sCreedMaddenNFL17FinalFantasyenjoyment)onconsole.GrandTheftAutoVCallofDuty:InfiniteBreathoftheWildCallofDuty:ModernWarfareRemasteredStarWarsBattlefrontTheLegendofZelda:RedDeadRedemptionCrashBandicootN.SaneCallofDuty:BlackOpsIIIMassEffect:AndromedaFIFAstandsoutamongATVIandEAfranchisesthatshowstrongsentimentonbothplatforms.%ofTitleGamerBaseRatingtheGameHighlyEnjoyable(PC)Despitelacklustersales,CoD:InfiniteWarfarescoresthehighestamongthreeactiveCoD70%gamesonbothplatforms,consistentwithourThoroughly(10)Enjoyable(8-9)60%player&developerconversationsthatInfinite50%40%Warfarewasahighqualitygame.30%PUBGshowsstrengthingamersentiment20%amongPCtitlesdespiteitsinfancy.10%0%OverwatchonceagainscoresinthemiddleofVTotalthepackonbothplatforms.FIFA17Diablo3Starcraft2TheSims4Titanfall2OverwatchNBA2K17Battlefield1HearthstoneWarfareBattlegroundsAssassin"sCreedFinalFantasyPlayerUnknown"sWorldofWarcraftLeagueofLegendsGrandTheftAutoVCallofDuty:InfiniteCallofDuty:ModernWarfareRemasteredStarWarsBattlefrontHeroesoftheStormSource:UBSEvidenceLabCallofDuty:BlackOpsIIIMassEffect:AndromedaNote:%asofthegamerbaseforthatspecifictitle.Q:"Towhatextentareyoucurrentlyenjoyingthegameonascaleof0-10(0=nolongerplaying,10=stillplayingandthoroughlyenjoying)?"16 USInternet&InteractiveEntertainmentConsoleDigitalDownloadPenetrationOnaverage,~32%ofourpanelpurchasedtheconsoletitle(s)throughdigitaldownload,consistentwithindustrycommentarythatfullgamedownloadratebroadlyisinthemid-30%range.Wealsoseeroughly~10%ofunitsbeinggiftedtoplayers,potentiallyputtinganuppercapfordigitaldownloadpenetration.Over50%ofOverwatchconsoleunitsarepurchasedthroughdigitaldownload,higherthanmanagementcommentarythatOverwatchisinthemid-30%range.SWBattlefrontandBattlefield1areseeingdigitaldownloadrateinthehigh30%,higherthanexpectation.Webelievethesediscrepanciescouldspeaktothemomentumofcataloguesalesforsuchgames,whicharemostlypurchasedthroughdigitalchannels.10October2017CoDisseeingimprovementwithdigitaldownloadratewithInfiniteWarfarefaroutpacingBlackOpsIIIindigitaladoption.FIFAlagsondigitaldownloadpenetrationwithonly25%ofunitsbeingpurchasedthroughfullgamedownload.%ofPlayersWhoAcquiredtheConsoleTitlethroughDigitalDownloadorGift54%46%44%40%39%37%37%36%35%34%34%32%30%30%28%25%25%23%16%12%11%12%11%9%11%8%10%11%10%11%8%9%8%10%6%5%6%3%AverageDestinyFIFA17OverwatchTitanfall2NBA2K17Battlefield1WarfareTrilogyMaddenNFL17Assassin"sCreedFinalFantasyVCallofDuty:InfiniteGrandTheftAutoVBreathoftheWildCallofDuty:ModernWarfareRemasteredStarWarsBattlefrontTheLegendofZelda:RedDeadRedemptionCrashBandicootN.SaneMassEffect:AndromedaCallofDuty:BlackOpsIIIDigitaldownloadGiftedSource:UBSEvidenceLab17 USInternet&InteractiveEntertainmentAttitudestowardsConsoleDigitalDownloadGamerattitudestowardsconsolefullgamedownloadarestillmixedanddigitaldownloadhasnotyetbecomeconsolegamer"spreferredwayofgettingnewgames.Only16%ofgamersindicatethatfullgamedownloadistheirpreferredoptiontogetnewgames.Gamersappreciatetheconvenienceofdigitaldownloadandbelieveitisagoodoptiontohave.Ontheotherhand,diskspaceconstraints,inabilitytoresell,anddownloadspeedaretopconcernsinhibitinggamersfromadoptingfullgamedownload.10October2017Wewillbemonitoringhowgamerattitudestowardsfullgamedownloadevolveinourfuturesurveys.%AgreeingwithViewsonFull-GameDownloadsMoreconvenientthangoingtoastore29%Isagreatoptiontohave28%Helpsmegetnewgamesfaster25%PositiveStatementsWouldbemypreferredoptiontogetnewgames16%Takes/Wouldtaketoomuchdiskspace23%Notabletoresellthegame22%Takes/Wouldtaketoolongtodownload21%Toodifficulttogivethegametoothers16%NegativeStatementsNotasagoodadealasbuyinggamesfromastore15%Toodifficulttoplayonsomeoneelse"sconsole13%Source:UBSEvidenceLab18 USInternet&InteractiveEntertainmentPremiumEditionPenetrationOnaverage,roughlyaquarteroftheplayerspurchasepremiumeditions(ultimate,deluxe,limited,etc.)onbothplatforms.CoDseemstohave~30-40%ofplayerspurchasingpremiumeditionsacrossactivegames.DestinyandOverwatchalsoseehigh%ofpremiumeditionpenetration.SportstitlessuchasMaddenNFLandFIFAhaverelativelylowpenetrationcomparedtoothergenres.10October2017%ofPlayersWhoBoughtPremiumEditionsforConsoleTitle%ofPlayersWhoBoughtPremiumEditionsforPCTitleAverage26%Average27%CallofDuty:ModernWarfareRemastered39%WorldofWarcraft43%NBA2K1736%Diablo339%Destiny35%CallofDuty:InfiniteWarfare35%Overwatch32%Overwatch34%StarWarsBattlefront32%CallofDuty:ModernWarfareRemastered31%MassEffect:Andromeda31%TheSims431%Starcraft229%RedDeadRedemption31%MassEffect:Andromeda29%FinalFantasyV30%FinalFantasyV29%CallofDuty:InfiniteWarfare29%CallofDuty:BlackOpsIII28%Battlefield127%Titanfall225%Titanfall225%LeagueofLegends25%Assassin"sCreed25%StarWarsBattlefront23%CallofDuty:BlackOpsIII22%Assassin"sCreed23%MaddenNFL1722%Battlefield122%TheLegendofZelda:BreathoftheWild21%PlayerUnknown"sBattlegrounds22%FIFA1720%NBA2K1721%CrashBandicootN.SaneTrilogy20%FIFA1719%GrandTheftAutoV14%HeroesoftheStorm17%GrandTheftAutoV17%Hearthstone15%Source:UBSEvidenceLabNote:Premiumeditionsdenote"Ultimate/Deluxe/Limitededition,i.e.thebasegamewithdownloadablecontentandpossiblyotherextras".19 USInternet&InteractiveEntertainmentDownloadableContent(DLC)PenetrationConsistentwithourindustryconversations,videogameDLCpenetrationseemstobeinthe30-40%rangeoverall.Massmarketestablishedfranchisesseemateriallyhigherattachratethanindustryaverage.NBA2KstandsoutastheconsoletitlewiththehighestDLCpenetration.CoDDLCattachrateisintherangeof50%-60%,highestamongmajortripleAshootertitles.StarWarsBattlefrontandBattlefield1haveslightlyhigherDLCattachratethanDestinyandOverwatch.Destiny"sexpansionpackattachrateisroughly~35%.10October2017WedonotviewFIFA"slowreportedresultsasareadthroughforUltimateTeam(UT)momentumduetoUTbeingagamemoderatherthanastandaloneproduct.DLCAttachRateforConsoleTitlesDLCAttachRateforPCTitlesAverage34%Average42%NBA2K1753%CallofDuty:ModernWarfareRemastered65%CallofDuty:BlackOpsIII48%Starcraft259%CallofDuty:InfiniteWarfare44%CallofDuty:InfiniteWarfare56%Diablo354%MassEffect:Andromeda44%CallofDuty:BlackOpsIII50%StarWarsBattlefront41%WorldofWarcraft50%CrashBandicootN.SaneTrilogy41%Battlefield145%Battlefield141%Titanfall245%Overwatch38%Hearthstone44%Destiny35%NBA2K1743%RedDeadRedemption34%StarWarsBattlefront41%TheLegendofZelda:BreathoftheWild34%LeagueofLegends41%Overwatch40%CallofDuty:ModernWarfareRemastered33%TheSims440%Titanfall232%FIFA1737%Assassin"sCreed32%Assassin"sCreed34%FIFA1730%MassEffect:Andromeda34%FinalFantasyV29%FinalFantasyV34%GrandTheftAutoV27%PlayerUnknown"sBattlegrounds32%MaddenNFL1727%GrandTheftAutoV29%HeroesoftheStorm21%Source:UBSEvidenceLabNote:Q:"Didyousubsequentlybuyanydownloadablecontent(i.e.,expansionpack/seasonpass)?"20 USInternet&InteractiveEntertainmentMicrotransactionSpendforKeyTitlesMicrotransactions(orpost-launchmonetizationingeneral)haveemergedasamajorrevenuestreaminrecentyears.PCgamersspendroughly2Xonmicrotransactionsthanconsolegamers.Themonetizationissignificant–PCaverages~$60pergameor1Xfrontlinetitlepurchasepriceandconsoleaverages~$25pergameintheUS.NBA2Kstandsoutastheconsoletitlewiththehighestmicrotransactionspendlevel.WoWtopsthePCchartbutitistobeexpectedgiventhelongevityofthetitle(launchedinNov2004).OverwatchgarnerssimilarMTSspendonconsoleandPC,collecting1frontlinetitlesales(Overwatchretailsat$40forbasicedition).10October2017FIFAdemonstrateshighlevelofincrementalspendthroughitssuccessfulUltimateTeammodeonbothconsoleandPC.Internationalmarkets(UK,GermanyandJapan)spendlevelisonparwithUSonconsolebut~15-30%lessonPC.AverageMicrotransactionSpendtoDateonConsole(US)AverageMicrotransactionSpendtoDateonPC(US)Average$25Average$58NBA2K17$52WorldofWarcraft$122Overwatch$45CallofDuty:ModernWarfareRemastered$86LeagueofLegends$78FIFA17$42TheSims4$68CallofDuty:InfiniteWarfare$33Battlefield1$67CallofDuty:BlackOpsIII$31InfiniteWarfare$63MaddenNFL17$27FIFA17$62Battlefield1$25Hearthstone$61CallofDuty:ModernWarfareRemastered$22CallofDuty:BlackOpsIII$58Assassin"sCreed$22PlayerUnknown"sBattlegrounds$57Destiny$22Titanfall2$56NBA2K17$53FinalFantasyV$21Starcraft2$51GrandTheftAutoV$19FinalFantasyV$51StarWarsBattlefront$19Assassin"sCreed$49MassEffect:Andromeda$18Diablo3$47TheLegendofZelda:BreathoftheWild$14MassEffect:Andromeda$44CrashBandicootN.SaneTrilogy$11StarWarsBattlefront$43RedDeadRedemption$11GrandTheftAutoV$42Titanfall2$6Overwatch$37HeroesoftheStorm$28Source:UBSEvidenceLabNote:Q:"Approximatelyhowmuchhaveyouspentonmicrotransactionstodateforthefollowinggames?"21 USInternet&InteractiveEntertainmentMultiplayerGameModePenetrationMultiplayer(MP)gamemodeelongatesgamerengagement,promotesnetworkeffect,andcreatesstickinessamongplayerbase.OursurveydatasuggestsmultiplayerpenetrationishigheronPC(onavg~65%ofgamersplayMPmode)vs.console(avg~55%).Successfulmultiplayeradoptionisalsocrucialforafranchise"seSportspotentialandbuildingoutaspectatoraudience.Overwatchtopsthechartformultiplayeradoption(evenaheadofCoD)onconsoleandisaheadofthecurveonPC.FIFAmultiplayeradoptionisroughlyinlinewithindustryaverage,pavingtherunwayforultimateteamrevenuegrowthpotential.10October2017Ourpaneldatasuggestsamultiplayergamercircleisroughly5-6players.MultiplayerPenetrationforConsoleTitlesMultiplayerPenetrationforPCTitles90%100%Onlyonlinemultiplayer,notcampaignBoththecampaignandonlinemultiplayerOnlyonlinemultiplayer,notcampaignBoththecampaignandonlinemultiplayer80%90%70%80%70%60%60%50%50%40%40%30%30%20%20%10%10%0%0%AverageDestinyFIFA17AverageDiablo3FIFA17OverwatchTitanfall2NBA2K17OverwatchTitanfall2Starcraft2NBA2K17TheSims4Battlefield1HearthstoneBattlefield1MaddenNFL17Assassin"sCreedFinalFantasyVFinalFantasyVAssassin"sCreedGrandTheftAutoVLeagueofLegendsWorldofWarcraftHeroesoftheStormGrandTheftAutoVCallofDuty:Modern…StarWarsBattlefrontStarWarsBattlefrontRedDeadRedemptionCallofDuty:BlackOpsIIIMassEffect:AndromedaCallofDuty:BlackOpsIIIMassEffect:AndromedaCallofDuty:InfiniteWarfareTheLegendofZelda:Breath…CallofDuty:InfiniteWarfareCallofDuty:ModernWarfare…CrashBandicootN.SaneTrilogyPlayerUnknown"sBattlegroundsSource:UBSEvidenceLab22 USInternet&InteractiveEntertainmentActiveConsoleTitleScoreCardTovisualizethestrengthoftheupcomingtitles,wetabulatevariousmetricsweusetoevaluatethegameincl:1)sizeofgamerbase;2)lengthofplayerretention;3)currentplayersentiment;4)digitaldownloadpenetration;5)premiumeditionpenetration;6)DLCpenetration;7)multi-playerpenetration;&8)microtransactionspendtodate.Overall,FIFA17,CoD,Overwatch,Destiny,&StarWarsBattlefrontareamongthehealthiestconsoletitles(usage+monetization)currently.Despitesmallergamerbase,NBA2K17demonstratesstrongmomentumespeciallyinmonetization.10October2017GTAVandAssassin"sCreedcontinuetodemonstratestickinesswithplayersbutlagonpost-launchmonetization.Enjoyable/PremiumMonthsofThoroughlyDigitalEditionDLCMultiplayerMicro-spendEVALUATIONMETRICGamerBasePlay(8-10)download%PenetrationPenetrationPenetration(US)WEIGHTEDAVERAGE/BENCHMARK8%4.753%32%26%34%55%$25CallofDuty:BlackOpsIII10%5.353%30%22%48%72%$31CallofDuty:InfiniteWarfare8%3.959%36%29%44%66%$33CallofDuty:ModernWarfareRemastered6%3.557%44%39%33%67%$22Overwatch7%4.352%54%32%38%78%$45Destiny7%5.144%34%35%35%63%$22FIFA1715%5.461%25%20%30%59%$42StarWarsBattlefront7%5.555%37%32%41%67%$19Battlefield19%4.150%37%27%41%63%$25Titanfall23%3.340%46%25%32%68%$6MassEffect:Andromeda3%3.649%34%31%44%40%$18GrandTheftAutoV16%8.361%25%14%27%56%$19NBA2K175%3.256%40%36%53%55%$52Assassin"sCreed15%6.954%30%25%32%43%$22FinalFantasyV9%4.047%28%30%29%37%$21MaddenNFL174%5.054%35%22%27%54%$27RedDeadRedemption4%7.152%23%31%34%43%$11TheLegendofZelda:BreathoftheWild6%3.252%16%21%34%23%$14CrashBandicootN.SaneTrilogy4%1.755%39%20%41%36%$11Source:UBSEvidenceLab23 USInternet&InteractiveEntertainmentActivePCTitleScoreCardSimilarlywetabulatedtheengagementandmonetizationmetricsforPCtitles.LoLandWoWcontinuetodominatethePCplatform.Similartoconsole,GTAVandAssassin"sCreedhavelargeengagementpoolsbutbehindonpostlaunchmonetization.FIFA17andCoDexhibitstrongmomentumwhileOverwatchandBattlefield1trendshavecooledoff.Hearthstone,HeroesoftheStorm,Titanfall2,andMassEffect:Andromedashowrelativeweaknessacrosstheboard.Enjoyable/Premium10October2017ThoroughlyEditionDLCMultiplayerMicro-spendEVALUATIONMETRICGamerBaseMonthsofPlay(8-10)PenetrationPenetrationPenetration(US)WEIGHTEDAVERAGE/BENCHMARK9%5.850%27%42%64%$58CallofDuty:BlackOpsIII12%4.451%28%50%69%$58CallofDuty:InfiniteWarfare8%3.252%35%56%70%$63CallofDuty:ModernWarfareRemastered6%2.652%31%65%69%$86WorldofWarcraft12%10.760%43%50%88%$122Overwatch11%5.547%34%40%81%$37Hearthstone5%7.633%15%44%82%$61HeroesoftheStorm3%5.930%17%21%81%$28Diablo311%6.945%39%54%66%$47Starcraft28%6.252%29%59%56%$51FIFA1715%4.658%19%37%57%$62StarWarsBattlefront7%4.848%23%41%67%$43Battlefield111%4.550%22%45%68%$67Titanfall24%3.448%25%45%69%$56MassEffect:Andromeda3%3.341%29%34%41%$44LeagueofLegends16%9.359%25%41%91%$78GrandTheftAutoV16%7.856%17%29%59%$42NBA2K174%4.045%21%43%53%$53Assassin"sCreed16%6.350%23%34%39%$49FinalFantasyV8%3.745%29%34%46%$51PlayerUnknown"sBattlegrounds3%2.054%22%32%85%$57TheSims411%6.449%31%40%26%$68Source:UBSEvidenceLab24 USInternet&InteractiveEntertainment10October2017PivotalQuestion3:WhatIstheStateofAdoptionforGamingSubscriptionServicesandeSports?AwarenessandadoptionforbothgamingsubscriptionservicesandeSportsremainlowBoththemespresentinterestingcalloptionsthatcandrivelong-termgrowthfortheindustryifexecution&adoptionareachieved25 USInternet&InteractiveEntertainmentAwareness&AdoptionofGamingSubscriptionServicesRemainsLowGamingsubscriptionservicesarguablycouldcarrythenextlegofvideogamebusinessmodeltransition,similartoenterprisesoftwarevendors.Ourpaneldataindicatesthatawarenessandadoptionofmajorgamingsubscriptionsremainlow.Wewillbemonitoringtheseresponsesgoingforwardtoassesstheprogress.~60%ofgamersdonotownanysubscriptionservicesand~30%ofgamersarenotevenawareofanysubscriptionservicesavailable.PlayStationNowhasthehighestawareness(~40%)andadoption(~20%)amongallgamingsubscriptionsservices.Despiteonlybeingannouncedforacoupleofmonths,NintendoSwitchOnline(paidfeaturestocomein2018,freetilllaunch)has10October2017rackedupsizableawarenessandsubscriberscomparedtoothermoreestablishedservices.EA"stwosubscriptionsservicesseerelativelylowgameradoption.%ofGamersAwareofGamingSubscriptionServices%ofGamersCurrentlySubscribedtotheServices57%39%29%27%27%18%17%18%15%12%11%5%2%2%PlayStationboxLiveNintendoEAAccessboxGame(EA)OriginNone,notPlayStationNintendoboxLiveGold(EA)OriginEAAccessboxGameNone,don"tNowGoldSwitchPassAccessawareofanyNowSwitchOnlineAccessPassownanyOnline$20/month$5/month$4/month$5/month$10/month$5/monthSource:UBSEvidenceLab26 USInternet&InteractiveEntertainmentPurchaseIntentforSubscriptionServicesAmongmajorvideogamesubscriptionservices(detailedbelow),PlayStationyieldsthehighestpurchase/renewalintent(36%ofgamersindicatethey"definitelywill"or"probablywill"subscribeorrenewtheservice),followedbyXboxLiveGold(33%)andNintendoSwitchOnline(31%).Stillalmost~20%ofthegamersindicatetheywillnotsubscribetoanyservices.10October2017MajorVideoGameSubscriptionServicesPurchaseIntentforMajorVideoGameSubscriptionServicesServicePricingBenefitsPlayStationNow$19.99/monthorAccesstoover500PS4andPS3games,directlyPlayStationNow13%23%31%15%$99.99/yeartoyourPS4andWindowPCboxGamePass$9.99/monthAccessto100+boxOne&box360gamesboxLiveGold14%19%28%16%(onboxOne)and20%discountoncataloggames&10%discountongameadd-onNintendoSwitchOnline10%21%29%16%boxLiveGold$4.99/monthorAccesstoonlinemulti-playercommunityand$40/yearcertainnumberoffreegameseverymonth&discountongames&add-onsEAAccess7%20%29%18%EAAccess$4.99/monthorUnlimitedplayoffullEAgamesonboxOne,$29.99/yearexclusivetrialsofnewEAgamesbeforereleaseanda10%discountonEAdigitalpurchaseon(EA)OriginAccess8%18%30%18%boxOne(EA)OriginAccess$4.99/monthandAccessto70+EAPCgamesandexclusivetrailsboxGamePass8%17%30%18%$29.99/year.ofnewEAPCgamesbeforereleaseNintendoSwitch$3.99/month(3Accesstovoicechatandonlinelobby(forDefinitelywillsubscribe/renewProbablywillsubscribe/renewOnlinemonthsfor$7.99)multiplayer)features;accesstoclassictitles,andMaybewillsubscribe/renewProbablywillnotsubscribe/renewor$19.99/yearspecialoffersondigitalcontents;tobelaunchedin2018(freeusagetillthen)Source:Companywebsites,UBSSource:UBSEvidenceLab27 USInternet&InteractiveEntertainmentAttitudestowardsGamingSubscriptionServicesOurPanelindicatesthatpriceisthemajorimpedimenttoadoptinggamingsubscriptionservices.Otherthanprice,gamerswhoarenotinterestedingamingsubscriptionservicesindicatethattheydon"tplayoftenenoughordon"tplayawidevarietyofgamestobeworthasubscription.Interestingly,technicalchallengessuchasbandwidthandlatencydonotrankhighongamers"concerns.OutofourentireUSpanel,~30%ofgamersindicatethattheyarewillingtospend$30+permonthonsubscriptioniftheserviceoffersnewgamereleases.Themonetizationpotentialonthesubscriptionbusinessmodelseemstohaveplentyofrunwayahead.10October2017%SitingPrimaryReasonforNotBeingInterestedinSubscriptionMaximumAmountWillingtoSpendpermonthiftheServices(AllMarkets)SubscriptionServiceOfferNewGameReleases(USonly)$20-$29Tooexpensive40%12%$30andDon"tplayoftenenough39%above31%Don"tplayawidevarietyofgames33%Lessthan$5Selectionnotcompelling17%17%Cannotresellgamesorgifttoothers14%Streamingtakestoomuchbandwidth10%Streamingexperienceisnotoptimal(latency9%issues,etc.)Subscriptionsdonotincludenewreleases5%$5-$919%$10-$1921%Source:UBSEvidenceLabSource:UBSEvidenceLabNote:AmonggamersindicatingnotinterestedinNote:AllUSgamers.purchasinggamingsubscriptions.28 USInternet&InteractiveEntertainmentLowPercentageofGamersHaveParticipatedineSportsOnlyalowpercentage(~20%inourpanelsamplebase)ofgamershavecompetedineSports.Amongthosewhohaveengagedincompetitivegaming,realtimestrategy,fighting,andfirstpersonshooterarethemostpopulargenres,followedbymultiplayeronlinebattlearena.SportsisnotahugelypopulareSportsgenreperourdata.10October2017%ofGamersWhoHaveEngagedineSportsMainGenreofeSportsGamersCompetein37%36%Yes35%21%31%19%4%Real-timeFirstpersonFightingMultiplayerSportsOthersNostrategy(RTS)shooter(FPS)onlinebattle79%arena(MOBA)Source:UBSEvidenceLab29 USInternet&InteractiveEntertainmenteSportsSpectatorSceneStillSubduedWhilevastmajorityofthegamersarenowawareofeSports,eSportsviewingisstillratherinfrequent:onaverageacrossall5markets,only~30%ofgamersvieweSportsonamonthlybasis.AquarterofthegamersareawareofeSportsbuthaveneverwatchedandanother~20%arenotawareofeSports.MostofgamerswatcheSportsfor~1houreachtime.Chinastandsoutamongstallsurveyedmarketsforhavingthehighestviewingfrequency:~20%ofgamerswatchweeklyandanother~40%watchmonthly.JapanontheotherhandlagsoneSportsawarenessaswellasaveragesessiontime.10October2017WeexpecteSportsspectatorshipamongthebroaderconsumergroupstobeevenmoresubduedgivenourpanelareconsistofconsoleandPCgamers.eSportsWatchingFrequencyeSportsViewingTimeperSession100%0%10%20%30%40%50%60%70%80%90%100%90%80%Allmarkets70%US60%50%UK40%30%Germany20%10%China0%AllmarketsUSUKGermanyChinaJapanJapanWeeklyMonthlybutnotweeklyEvery2-3monthLessoften/notregularly1hour2hours3-4hoursMorethan4hoursAwarebutneverwatchedeSportsNeverheardofeSportsbeforeSource:UBSEvidenceLab30 USInternet&InteractiveEntertainment…butTimeSpendisGrowingTimespendcontinuestogrow–44%ofgamerswhocurrentlywatcheSportsreportedanincreaseintimeviewingeSportsvs.12monthsagoandonly20%reporteddecline.Whilewehaveyettoseemajorimpactongamers"purchasing&spendingbehaviors,eSportsviewingisencouraginggamerstospendmoretime&moneyingame(fullgames/downloadablecontent/microtransactions).10October2017ChangeinamountoftimewatchingeSportsvs12monthsago%AgreeingwiththeImpactofeSportsViewingAlotmore12%Noimpact39%Spendingmoretimeplaying16%SpendingmoremoneytoupgradePCandaccessories11%Alittlemore32%Spendinglesstimeonotherleisureactivities11%Buyingmoregames10%Thesame36%Spendingmoremoneyondownloadablecontent9%Spendingmoremoneyonin-gamespurchases9%SubscribingtoeSportschannels9%Alittleless10%AttendingeSportsmatchesinperson7%Spendinglesstimeplayinggames7%Buyingfewergames6%Alotless10%Spendinglessmoneyonmicro-transactions6%Spendinglessmoneyondownloadablecontent5%Source:UBSEvidenceLab31 USInternet&InteractiveEntertainmentTopeSportsFranchisesataGlanceNotsurprisingly,LoLhasthelargesteSportsviewerbaseamongmajoreSportsfranchises,followedbyWoWandCS.Overwatchshowsmomentumgivenithadonlylaunchedlastyearandranks4thonviewerbasesize.StarCraft2,Dota2,andLoLhavethehighestviewingfrequencywhileOverwatchandWoWrankthelowest.ChinahasdisproportionallylargerviewerbaseforLoL%ofViewersRatingtheeSportsViewinghighlyEnjoyableona%basis(almost3vs.othermarkets).Italsohaslarger%ofgamerswhoviewWoW,CS,andDota2.60%50%10October2017ATVI"sOverwatchLeaguefirstseasonissettobegininJanuary2018with12teams.Theleaguetakesacity-40%basedstructureandafranchiseformat,similarto30%professionalsportsleague.Teamsbuyinwith$20m20%franchisefeeandsharerevenueswithBlizzard50/50.10%Viewersentimentwise,Overwatchranksthelowest0%AverageLeagueofHearthstoneStarCraft2WorldofHeroesofCounterDota2Overwatchamongallthefranchises,echoingsomeconcernsthatLegendsWarcrafttheStormStrikeOverwatchisfuntoplaybutslightlychallengingtoThoroughlyenjoying(10)Highlyenjoyable(8-9)watch.ViewerBaseofeSportsFranchisesViewingfrequencyforKeyeSportsFranchises100%LeagueofLegends35%90%80%WorldofWarcraft24%70%CounterStrike:Global19%60%Offensive50%Overwatch18%40%StarCraft216%30%20%Dota212%10%Hearthstone11%0%StarCraft2Dota2LeagueofHeroesofHearthstoneCounterOverwatchWorldofHeroesoftheStorm10%LegendstheStormStrikeWarcraftWeeklyMonthlybutnotweeklyEvery2-3monthLessOftenSource:UBSEvidenceLabNote:Gamersentimentquestion:"TowhatextentareyoucurrentlyenjoyingtheeSportsonthebelowfranchise?"32 ChangeinOperatingEstimatesActivisionBlizzard(ATVI,Buy,$72PT)Revenue–WetakeupourQ3andQ4revenueestimatestoaccountfor1mincrementalunitsalesforDestiny2andCoD:WWIIrespectively.EBITDA–WemodestlytakeupgrossmarginforQ3andQ4tokeepourCOGS(inabsolutedollarterm)roughlyinlinewithpreviousestimates.EPS–ReflectchangesinrevenueandEBITDAestimates.Figure3:ATVIOldvs.NewEstimatesQ32017FY2017FY2018OldNew%ChangeOldNew%ChgOldNew%ChgAdjRevenue$1,707$1,7321.5%$6,618$6,7301.7%$7,333$7,3340.0%GAAPRevenue$1,387$1,3990.9%$6,401$6,4570.9%$6,862$6,8830.3%AdjEBITDA$550$5663.0%$2,364$2,4262.6%$2,675$2,6910.6%AdjOpInc$521$5373.1%$2,237$2,2992.8%$2,536$2,5520.6%GAAPOpInc$136$133-2.4%$1,091$1,0960.4%$1,495$1,5332.5%FCF$391$4053.5%$2,211$2,2984.0%$2,597$2,5980.0%AdjEPS$0.47$0.483.4%$2.04$2.103.0%$2.28$2.300.7%GAAPEPS$0.09$0.08-3.5%$1.03$1.040.4%$1.20$1.232.8%Source:Companyreports;UBSestimatesUSInternet&InteractiveEntertainment10October201733 Valuation–Our$72pricetarget(nochange)isbasedona20.3xEV/FCFmultiple(nochange)appliedtoourslightlyrevised2018FCFestimate.Figure4:ATVIPriceTargetAnalysisSCENARIOANALYSISDOWNSIDEBASEUPSIDEValuation$43$72$95%Upside/Downside-32%14%50%Sales(FY17E)$6,528$6,730$6,932Bear/BullAdjustment-3%—3%Sales(FY18E)$6,894$7,334$7,775Bear/BullAdjustment-6%—6%SalesCAGR("16-"18)2.2%5.4%8.5%EBITDA(FY17E)$2,220$2,426$2,565EBITDAMargin34%36%37%EBITDA(FY18E)$2,344$2,691$2,954EBITDAMargin34%37%38%EBITDACAGR("16-"18)-2.3%4.7%9.7%FCF(FY17E)$2,089$2,298$2,496FCF%ofSales32%34%36%FCF(FY18E)$2,137$2,598$2,954FCF%ofSales31%35%38%EV/2018FCF14.0x20.3x24.0xFCFCAGR("16-"18)2.9%13.4%21.0%EV/FCFtoGrowth4.85x1.51x1.14xEnterpriseValue$29,922$52,602$70,903WeightingsEVderivedfromFCF100%100%100%EnterpriseValue$29,922$52,602$70,903CapitalStructureAdjustmentsAdjustedNetDebt-2018E$(3,326)$(3,326)$(3,291)DividendperShare$0.30$0.30$0.35Buyback(@CurrentPrice)---AdjustedSharesOutstanding779779779Source:Companyreports;FactSet,UBSestimatesUSInternet&InteractiveEntertainment10October201734 ElectronicArts(EA,Buy,$132PT)Revenue–Wemodestlyshift~$15mofrevenuesfromFQ3toFQ2onthebackofastrongFIFAlaunch(expectingmorefrontloadedsellthroughvs.previousestimates)whileourfull-yearestimatesremainunchanged.EBITDA–WeonlyreviseourFQ3grossmarginassumptionsslightlytomodelheaviergrossmargincompressiongivenStarWarsBattlefront2tendtoskewlowerondigitalunitmixvs.Battlefield1&Titanfall2fromayearago.EPS–ReflectchangesinrevenueandEBITDAestimates.Figure5:ATVIOldvs.NewEstimatesQ2FY18FY2018FY2019OldNew%ChangeOldNew%ChangeOldNew%ChangeNon-GAAPRevenue$1,160$1,1741.2%$5,223$5,219-0.1%$5,585$5,581-0.1%(NetSales)Revenue(GAAP)$947$9530.7%$5,062$5,0620.0%$5,401$5,397-0.1%AdjEBITDA(implied)$228$2426.2%$1,862$1,8620.0%$2,075$2,0760.0%Non-GAAPOpInc$198$2127.1%$1,741$1,7420.0%$1,952$1,9520.0%(implied)GAAPOpInc$(82)$(74)9.0%$1,325$1,3300.4%$1,502$1,5050.2%FreeCashFlow$337$3534.6%$1,592$1,591-0.1%$1,818$1,817-0.1%AdjEPS(implied)$0.50$0.547.1%$4.33$4.330.0%$4.91$4.910.0%GAAPEPS$(0.20)$(0.18)9.2%$3.57$3.580.3%$4.00$4.010.1%Source:Companyreports;UBSestimatesUSInternet&InteractiveEntertainment10October201735 Valuation–Our$132pricetarget(nochange)isbasedona19.2xEV/FCFmultiple(nochange)appliedtoourslightlyrevisedFY2019FCFestimate.Figure6:EAPriceTargetAnalysisSCENARIOANALYSISDOWNSIDEBASEUPSIDEValuation$78$132$174%Upside/Downside-35%10%45%Sales(FY18E)$5,010$5,219$5,427Bear/BullAdjustment-4%—4%Sales(FY19E)$5,246$5,581$5,916Bear/BullAdjustment-6%—6%SalesCAGR("17-"19)3.0%6.3%9.4%EBITDA(FY18E)$1,678$1,862$2,062EBITDAMargin34%36%38%EBITDA(FY19E)$1,731$2,076$2,307EBITDAMargin33%37%39%EBITDACAGR("17-"19)1.3%10.9%16.9%FCF(FY18E)$1,378$1,591$1,682FCF%ofSales28%30%31%FCF(FY19E)$1,364$1,817$2,011FCF%ofSales26%33%34%EV/2019FCF13.5x19.2x23.8xFCFCAGR("17-"19)-7.0%7.3%12.9%EV/FCFtoGrowthn/m2.63x1.84xEnterpriseValue$18,413$34,887$47,769WeightingsEVderivedfromFCF100%100%100%EnterpriseValue$18,413$34,887$47,769CapitalStructureAdjustmentsAdjustedNetDebt-FY19E$(5,524)$(5,524)$(5,524)DividendperShare$-$-$-Buyback(@CurrentPrice)000Adj.Shares-FY19E306306306Source:Companyreports;FactSet,UBSestimatesUSInternet&InteractiveEntertainment10October201736 *UBSEvidenceLabprovidesourresearchanalystswithrigorousprimaryresearch.Theteamconductsrepresentativesurveysofkeysectordecision-makers,minestheInternet,systematicallycollectsobservabledata,andpullsinformationfromotherinnovativesources.Theyapplyavarietyofadvancedanalytictechniquestoderiveinsightsfromthedatacollected.ThisvaluableresourcesuppliesUBSanalystswithdifferentiatedinformationtosupporttheirforecastsandrecommendations—inturnenhancingourabilitytoservetheneedsofourclients.Forthisreport,UBSEvidenceLabconductedanonlinesurveywith5,346PC/console(includinghandheldgamingdevicebutexcludingsmartphone/featurephones)gamerswhoplayvideogamesatleastonceevery7-12monthsandlastplayed4-6monthsago.Respondentsareage18-44yearsoldandresideacrossUS,UK,Germany,China(inT1-4cities),andJapan.ConductedfromAug21toSept252017,conclusionsbasedonthemarketsamplehaveapotentialsamplingerrorof+/-2.2%(China)and+/-2.5%(eachothermarkets)ata90%confidencelevel.ValuationMethodandRiskStatementThepotentialrisksintheInteractiveEntertainmentsectormayinclude,butarenotlimitedto:aslowdowninconsumerspending;changestotheretailchannel;operationaldifficulties;competition;consumerfatigueinparticulargamegenres;releasedateslips;theimpactoflegalandlicensingissues;softwarepiracy;andforeignexchangeandcurrencyrates.OurInternetvaluationsarebasedonacombinationofEV/Sales,EV/GrossProfit,EV/EBITDA,EV/FCF,EV/(FCF-SBC)andinsomecases,sum-of-the-partsmethodologies.KeyrisksthatcouldpotentiallyimpactActivisionBlizzardsharesincludeweaksalesduringthenewconsolecycletransitionandafailureofActivisionBlizzardtosuccessfullyclosependingM&A.Additionalrisksincludemacroeconomicheadwinds,currencyfluctuations,aconcentrationofrevenuesgeneratedbythreekeyfranchises,aconcentrationofsalestotwokeycustomers,regulatoryrisks,increasedpublicscrutinyaroundfirst-personshootergames,andintellectualpropertyclaims.WevalueActivisionBlizzardbasedonanEV/FCFmultipleappliedtoourforwardFCFestimates.KeyrisksthatcouldpotentiallyimpactElectronicArtssharesincludemacroeconomicheadwinds/lowerdiscretionaryspendingbyconsumers,currencyfluctuations,customerconcentration,potentiallyincreasedpublicscrutinyand/ornegativeconsumersentiment,anyinterruptionofinformationtechnologyandcommunicationssystems,andanyfailuretoobtainlicensesatareasonablecostoranunexpectedissuewithathird-partyevent.Additionally,IPandcopyrightclaimsagainstElectronicArtsand/oranyfailuretoprotectElectronicArts’ownintellectualpropertycouldnegativelyimpactthebusiness.AlsoworthnotingisthattherapidpaceofevolutioninthesectorcouldcauseashiftinuserpreferencesthatreducesdemandforElectronicArts’games.Thebusinessmodelisdependentonitsabilitytolaunchnew,“hit”games.IfElectronicArtsdoesnotsuccessfullylaunchgamesthatattractasignificantnumberofplayers,thecompany’sfinancialresultscouldbeatrisk.WevalueElectronicArtsbasedonanEV/FCFmultipleappliedtoourforwardFCFestimates.USInternet&InteractiveEntertainment10October201737 RequiredDisclosuresThisreporthasbeenpreparedbyUBSSecuritiesLLC,anaffiliateofUBSAG.UBSAG,itssubsidiaries,branchesandaffiliatesarereferredtohereinasUBS.ForinformationonthewaysinwhichUBSmanagesconflictsandmaintainsindependenceofitsresearchproduct;historicalperformanceinformation;andcertainadditionaldisclosuresconcerningUBSresearchrecommendations,pleasevisitwww.ubs.com/disclosures.Thefigurescontainedinperformancechartsrefertothepast;pastperformanceisnotareliableindicatoroffutureresults.Additionalinformationwillbemadeavailableuponrequest.UBSSecuritiesCo.LimitedislicensedtoconductsecuritiesinvestmentconsultancybusinessesbytheChinaSecuritiesRegulatoryCommission.UBSactsormayactasprincipalinthedebtsecurities(orinrelatedderivatives)thatmaybethesubjectofthisreport.Thisrecommendationwasfinalizedon:09October201707:04PMGMT.AnalystCertification:Eachresearchanalystprimarilyresponsibleforthecontentofthisresearchreport,inwholeorinpart,certifiesthatwithrespecttoeachsecurityorissuerthattheanalystcoveredinthisreport:(1)alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthosesecuritiesorissuersandwerepreparedinanindependentmanner,includingwithrespecttoUBS,and(2)nopartofhisorhercompensationwas,is,orwillbe,directlyorindirectly,relatedtothespecificrecommendationsorviewsexpressedbythatresearchanalystintheresearchreport.UBSInvestmentResearch:GlobalEquityRatingDefinitions12-MonthRatingDefinitionCoverage1IBServices2BuyFSRis>6%abovetheMRA.45%26%NeutralFSRisbetween-6%and6%oftheMRA.39%23%SellFSRis>6%belowtheMRA.16%11%Short-TermRatingDefinitionCoverage3IBServices4StockpriceexpectedtorisewithinthreemonthsfromthetimeBuy<1%<1%theratingwasassignedbecauseofaspecificcatalystorevent.StockpriceexpectedtofallwithinthreemonthsfromthetimeSell<1%<1%theratingwasassignedbecauseofaspecificcatalystorevent.Source:UBS.Ratingallocationsareasof30September2017.1:Percentageofcompaniesundercoveragegloballywithinthe12-monthratingcategory.2:Percentageofcompanieswithinthe12-monthratingcategoryforwhichinvestmentbanking(IB)serviceswereprovidedwithinthepast12months.3:PercentageofcompaniesundercoveragegloballywithintheShort-Termratingcategory.4:PercentageofcompanieswithintheShort-Termratingcategoryforwhichinvestmentbanking(IB)serviceswereprovidedwithinthepast12months.KEYDEFINITIONS:ForecastStockReturn(FSR)isdefinedasexpectedpercentagepriceappreciationplusgrossdividendyieldoverthenext12months.MarketReturnAssumption(MRA)isdefinedastheone-yearlocalmarketinterestrateplus5%(aproxyfor,andnotaforecastof,theequityriskpremium).UnderReview(UR)StocksmaybeflaggedasURbytheanalyst,indicatingthatthestock"spricetargetand/orratingaresubjecttopossiblechangeinthenearterm,usuallyinresponsetoaneventthatmayaffecttheinvestmentcaseorvaluation.Short-TermRatingsreflecttheexpectednear-term(uptothreemonths)performanceofthestockanddonotreflectanychangeinthefundamentalvieworinvestmentcase.EquityPriceTargetshaveaninvestmenthorizonof12months.EXCEPTIONSANDSPECIALCASES:UKandEuropeanInvestmentFundratingsanddefinitionsare:Buy:Positiveonfactorssuchasstructure,management,performancerecord,discount;Neutral:Neutralonfactorssuchasstructure,management,performancerecord,discount;Sell:Negativeonfactorssuchasstructure,management,performancerecord,discount.CoreBandingExceptions(CBE):Exceptionstothestandard+/-6%bandsmaybegrantedbytheInvestmentReviewCommittee(IRC).FactorsconsideredbytheIRCincludethestock"svolatilityandthecreditspreadoftherespectivecompany"sdebt.Asaresult,stocksdeemedtobeveryhighorlowriskmaybesubjecttohigherorlowerbandsastheyrelatetotherating.Whensuchexceptionsapply,theywillbeidentifiedintheCompanyDisclosurestableintherelevantresearchpiece.USInternet&InteractiveEntertainment10October201738 Researchanalystscontributingtothisreportwhoareemployedbyanynon-USaffiliateofUBSSecuritiesLLCarenotregistered/qualifiedasresearchanalystswithFINRA.SuchanalystsmaynotbeassociatedpersonsofUBSSecuritiesLLCandthereforearenotsubjecttotheFINRArestrictionsoncommunicationswithasubjectcompany,publicappearances,andtradingsecuritiesheldbyaresearchanalystaccount.Thenameofeachaffiliateandanalystemployedbythataffiliatecontributingtothisreport,ifany,follows.UBSSecuritiesLLC:EricJ.Sheridan;BridgetHan.CompanyDisclosuresCompanyNameReuters12-monthratingShort-termratingPricePricedateActivisionBlizzard16ATVI.OBuyN/AUS$63.2506Oct2017ElectronicArts4,6a,6b,7,16EA.OBuyN/AUS$120.0906Oct2017Source:UBS.Allpricesasoflocalmarketclose.Ratingsinthistablearethemostcurrentpublishedratingspriortothisreport.Theymaybemorerecentthanthestockpricingdate4.Withinthepast12months,UBSAG,itsaffiliatesorsubsidiarieshasreceivedcompensationforinvestmentbankingservicesfromthiscompany/entityoroneofitsaffiliates.6a.Thiscompany/entityis,orwithinthepast12monthshasbeen,aclientofUBSSecuritiesLLC,andinvestmentbankingservicesarebeing,orhavebeen,provided.6b.Thiscompany/entityis,orwithinthepast12monthshasbeen,aclientofUBSSecuritiesLLC,andnon-investmentbankingsecurities-relatedservicesarebeing,orhavebeen,provided.7.Withinthepast12months,UBSSecuritiesLLCand/oritsaffiliateshavereceivedcompensationforproductsandservicesotherthaninvestmentbankingservicesfromthiscompany/entity.16.UBSSecuritiesLLCmakesamarketinthesecuritiesand/orADRsofthiscompany.Unlessotherwiseindicated,pleaserefertotheValuationandRisksectionswithinthebodyofthisreport.Foracompletesetofdisclosurestatementsassociatedwiththecompaniesdiscussedinthisreport,includinginformationonvaluationandrisk,pleasecontactUBSSecuritiesLLC,1285AvenueofAmericas,NewYork,NY10019,USA,Attention:InvestmentResearch.ActivisionBlizzard(US$)PriceTarget(US$)StockPrice(US$)80.060.040.020.00.044455555566666677777-11t--1-11r--1-11t--1-11r--1-11t--1-11r--1-11t-guccebepnuguccebepnuguccebepunugc-A-O1-D-F1-A-J1-A-O1-D-F1-A-J1-A-O1-D-F1-A1-J-A-O1100100100100100100100100100100BuyUSInternet&InteractiveEntertainment10October201739 DateStockPrice(US$)PriceTarget(US$)Rating2014-07-0322.6723.0Buy2014-08-0522.3626.0Buy2015-01-0519.8525.0Buy2015-02-0622.1124.0Buy2015-05-0623.226.0Buy2015-07-0725.0528.0Buy2015-08-0425.6730.0Buy2015-10-0631.9136.0Buy2015-11-0436.9940.0Buy2016-01-1237.1244.0Buy2016-02-1228.1236.0Buy2016-05-0637.8742.0Buy2016-07-1842.1450.0Buy2016-08-0540.5652.0Buy2016-12-1936.6345.0Buy2017-02-1047.2348.0Buy2017-03-2849.7657.0Buy2017-05-0553.8360.0Buy2017-06-1558.9167.0Buy2017-08-0363.9772.0BuySource:UBS;asof06Oct2017ElectronicArts(US$)PriceTarget(US$)StockPrice(US$)15010050044455555566666677777-11t--1-11r--1-11t--1-11r--1-11t--1-11r--1-11t-guccebepnuguccebepnuguccebepnuguc-A-O1-D-F1-A-J1-A-O1-D-F1-A-J1-A-O1-D-F1-A-J1-A-O1100100100100100100100100100100BuyNeutralNoRatingDateStockPrice(US$)PriceTarget(US$)Rating2014-07-0336.9235.0Neutral2014-07-2238.4240.0Neutral2015-01-0546.5750.0Neutral2015-01-2748.4152.0Neutral2015-04-1556.8660.0Neutral2015-05-0559.1665.0Neutral2015-07-0668.0180.0Buy2015-10-0666.5583.0Buy2016-01-1265.6282.0Buy2016-07-1878.2690.0Buy2016-12-1979.596.0Buy2017-05-0996.01-NoRating2017-05-10108.16112.0Buy2017-06-15110.53132.0BuySource:UBS;asof06Oct2017USInternet&InteractiveEntertainment10October201740 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ThedisclosurescontainedinresearchdocumentsproducedbyUBSLimitedshallbegovernedbyandconstruedinaccordancewithEnglishlaw.UBSspecificallyprohibitstheredistributionofthisdocumentinwholeorinpartwithoutthewrittenpermissionofUBSandUBSacceptsnoliabilitywhatsoeverfortheactionsofthirdpartiesinthisrespect.Imagesmaydepictobjectsorelementsthatareprotectedbythirdpartycopyright,trademarksandotherintellectualpropertyrights.©UBS2017.ThekeysymbolandUBSareamongtheregisteredandunregisteredtrademarksofUBS.Allrightsreserved.USInternet&InteractiveEntertainment10October201743'