How important are friendships in determining success by individuals and teams in complex collaborative environments? By combining a novel data set containing the dynamics of millions of ad hoc teams from the popular multiplayer online first person shooter Halo: Reach with survey data on player demographics, play style, psychometrics and friendships derived from an anonymous online survey, we investigate the impact of friendship on collaborative and competitive performance. In addition to finding significant differences in player behavior across these variables, we find that friendships exert a strong influence, leading to both improved individual and team performance--even after controlling for the overall expertise of the team--and increased pro-social behaviors. Players also structure their in-game activities around social opportunities, and as a result hidden friendship ties can be accurately inferred directly from behavioral time series. Virtual environments that enable such friendship effects will thus likely see improved collaboration and competition.