Activision Blizzard (ATVI)

1.             Platform Royalty

a.                                       For each FPU manufactured during the term of this Agreement, Publisher shall pay Microsoft nonrefundable royalties in accordance with the royalty tables set forth below (Tables 1 and 2) and the “Unit Discount” table set forth in Section 1.d of this Exhibit 1 (Table 3).

b.                                      The royalty fee is determined by the “Threshold Price” (which is the Wholesale Price (WSP) or Suggested Retail Price (SRP) at which Publisher intends to sell the Software Title in the applicable Sales Territory).  To determine the applicable royalty rate for a particular Software Title in a particular Sales Territory, the applicable Threshold Price fromTable 1 below will determine the correct royalty “Tier.” The royalty fee is then as set forth in Table 2 based on the Manufacturing Region in which the FPUs will be manufactured.  For example, assume the Wholesale Price of a Software Title to be sold in the European Sales Territory is [*] According to Table 1, [*] royalty rates will apply to that SoftwareTitle and the royalty rate is determined in Table 2 by the Manufacturing Region.  If the Software Title were manufactured inthe European Manufacturing Region, the royalty fee would be [*] per FPU.  If the Software Title were manufactured in Asian Manufacturing Region.  the royalty fee would be [*] per FPU.

[*]

[*]

[*]

c.                                       [*] submit to Microsoft, at least [*] for a Software Title, a completed and signed “Royalty Tier Selection Form” in the form attached to this Agreement as Exhibit 2 for each Sales Territory.  The selection indicated in the Royalty Tier Selection Form will only be effective once the Royalty Tier Selection Form has been accepted by Microsoft.  If Publisher does not submit a Royalty Tier Selection Form as required hereunder, the royalty fee for such Software Title will default to [*] regardless of the actual Threshold Price.  The selection of a royalty tier for a Software Title in a Sales Territory is binding for the life of that SoftwareTitle even if the Threshold Price is reduced following the Software Title’s Commercial Release.

d.                                      Unit Discounts.  Publisher is eligible for a discount to FPUs manufactured for a particular Sales Territory(a “Unit Discount”) based on the number of FPUs that have been manufactured for sale in that Sales Territory as described in Table 3 below.  Except as provided in Section 4 below, units manufactured for sale in a Sales Territory are aggregated only towards a discount on FPUs manufactured for that Sales Territory; there is no worldwide or cross-territorial aggregation of units for a particular Software Title.  The discount will be rounded up to the nearest Cent, Yen or hundredth of a Euro.

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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