SBD/June 9, 2017/Leagues and Governing Bodies

Activision Blizzard Banking On New Overwatch League To Propel Its Esports Efforts

Activision Blizzard is making a "major foray" into esports, a once-niche genre that is now "reaching a tipping point," according to Michal Lev-Ram of FORTUNE. Revenue from esports will approach $700M this year. Activision's Overwatch League launching later this year will "essentially control all the competing teams and the distribution of all the games." Activision "thinks that these opportunities, combined with sponsorships and advertising, not to mention Overwatch-branded merchandise like T-shirts and hats, could bring the company billions in annual revenue as the e‑sports audience grows." The company's acquisition of Major League Gaming "hasn’t yet resulted in new operating profits." but the pedigrees of CEO Bobby Kotick’s recent hires "hint at how eagerly he wants to establish the company as a mainstream entertainer." Former ESPN CEO Steve Bornstein chairs Kotick’s esports division, while former Fox Sports Exec VP Pete Vlastelica is MLG CEO. The "Overwatch" title has "become Blizzard’s fastest-growing game to date," generating more than $1B in revenue and amassing 30 million players since its introduction just a year ago, showing "why it’s the game to which Kotick is harnessing his e‑sports ambitions." Kotick "hopes to make e‑sports more mainstream." One way he is "doing that: instituting teams that are city-based -- a first in professional e‑sports." Activision also "doesn’t have to deal with the legacy TV networks that have tied up traditional sports rights for years." Vlastelica said, “E‑sports is the first digital native sport. We’re not encumbered by the paid-TV ecosystem that keeps the content out of the hands of young people who, frankly, don’t watch TV" (FORTUNE, 6/15 issue).
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