Activision acquires Major League Gaming to become 'ESPN of eSports'

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Call of Duty publisher Activision Blizzard has acquired the veteran eSports organiser Major League Gaming (MLG) in a deal worth $46m.

The purchase gives Activision access to MLG’s content streaming platform, live gaming events and competitive gaming leagues. The company’s MLGtv online eSports channel is reportedly watched by over 20 million viewers a month.

In a statement about the deal, Activision Blizzard chief executive Bobby Kotick said his plan is “to create the ESPN of eSports” – a reference to the sports broadcasting network, which itself is increasing its coverage of eSports events.

“MLG’s ability to create premium content and its proven broadcast technology platform – including its live streaming capabilities – strengthens our strategic position in competitive gaming,” said Kotick.

In October, Activision announced the formation of a new division dedicated to eSports. The company hired MLG co-founder Mike Sepso and former ESPN head Steve Bornstein to run it. The new deal will also see MLG’s other co-founder Sundance DiGiovanni joining Activision.

The eSports industry has been growing at a rapid rate since its inception in the mid-90s. According to research firm SuperData, over 130 million people worldwide now regularly watch eSports tournaments and events, mostly via online streams. The biggest titles in the sector, League of Legends and Dota 2, also attract huge audiences to their live events, which sell out vast sports stadiums.

Activision has been taking a growing interest in professional gaming over the last five years. It’s Starcraft strategy title was instrumental in building the popularity of pro-gaming during the 2000s, especially in South Korea where the game effectively became a national sport. The publisher now runs annual Call of Duty and Hearthstone world championships.

The acquisition of MLG represents a desire to oversee all aspects of the eSports tournament process – much like Riot Games, the developer of sector leader League of Legends, which has complete control over its tournaments and events. Close industry rival Electronic Arts, creator of the Fifa and Battlefield brands, is also working to create a similar pro-gaming business – it announced its own eSports division in December, putting games industry veteran Peter Moore in charge.

Although eSports tournaments and events generate modest incomes through sponsorship, advertising and subscription sales, the value is in creating dedicated and enthusiastic communities around the titles themselves, thereby ensuring longevity and sales in an increasingly expensive and complex market.

However, Activision Blizzard no doubt hopes that by creating a dedicated eSports business with a mainstream audience in its sights, it will be able to compete with ESPN, not only for audience, but for lucrative big brand advertisers. In the traditional games industry, production costs on major releases have risen considerably since the arrival of the new Xbox One and PS4 consoles. In this context, eSports may well represent a significant new revenue stream.

Powered by article was written by Keith Stuart, for on Tuesday 5th January 2016 10.26 Europe/ © Guardian News and Media Limited 2010