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Instant Analysis: Activision Blizzard Inc. Expands Its E-Sports Footprint Again

By Leo Sun - Jan 18, 2016 at 7:45AM

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Activision just bought one of the world's best-known e-sports organizations.

Activision Blizzard (ATVI 0.44%) bought nearly all of professional e-sports organization Major League Gaming's assets for $46 million in early January. Activision will merge those assets with its in-house e-sports division, Activision Blizzard Media Networks. That unit, which was established last October with assets from the defunct IGN Pro League, is currently led by former ESPN CEO Steve Bornstein and MLG co-founder Mike Sepso.

Why did Activision buy MLG?
Activision CEO Bobby Kotick told The New York Times that the company acquired MLG primarily for its streaming operations, which delivers live streams of games to viewers across the world. Kotick stated that his goal was to "build the ESPN of video games" -- a premium cable TV channel dedicated exclusively to gaming.

E-sports viewership is certainly on the rise. SuperData research claims that there are currently 134 million viewers worldwide, and that figure could grow at around 30% over the next five years. That growth also persuaded Amazon.com (AMZN 1.42%) to acquire popular e-sport streaming site Twitch for nearly $1 billion last year.

Advertising and media ambitions
MLG already streams popular Activision Blizzard games such as Call of Duty: Advanced Warfare and Starcraft II. MLG won't exclusively stream Activision games following the takeover, but sales of Activision's own titles will still probably be boosted by higher e-sports exposure.

More importantly, the expansion of Activision Blizzard Media Networks complements the publisher's recent push into original game-based movies and TV shows with Activision Blizzard Studios. These moves could all steadily transform Activision from a video-game publisher into a diversified entertainment powerhouse.

Leo Sun owns shares of Amazon.com. The Motley Fool owns shares of and recommends Activision Blizzard and Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
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Activision Blizzard, Inc. Stock Quote
Activision Blizzard, Inc.
ATVI
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