November 9, 2016
Activision Blizzard, the biggest videogame company in the U.S. by market value, is taking steps to create an e-sports league that more closely resembles a traditional sports league. The company is in conversation with more than 100 e-sports and traditional sports teams to drum up interest in a league for its game “Overwatch” that would function like the National Football League. Competitive videogaming has gained in popularity and viewership, heading towards an estimated 10 percent of all U.S. sports viewing by 2020.
The Wall Street Journal takes that estimate from consulting firm Activate, which also predicts that e-sports will reach 88 million fans by 2020. That’s what’s catching the interest of traditional sports teams, including the NBA’s Philadelphia 76ers and European soccer club Valencia CF, both of which have already invested in e-sports. ESPN and TBS also broadcast e-sports tournaments.
Today, independent teams and “tournaments organized by disparate groups and game makers” dominate the e-sports landscape. Several tournaments have formed around popular games, including Nintendo’s “Super Smash Bros.,” Electronic Arts’ “Madden NFL” and Tencent Holdings’ “League of Legends.” Electronic Sports League, which worked with videogame publishers for over ten years, previously tried to organize e-sports for many games.
Last October, Activision Blizzard created a division, led by former ESPN head and NFL Network top executive Steve Bornstein, to “go big in e-sports.” Early next year, the company will hold player tryouts for “city-based teams around the globe” to compete in its “Overwatch” shooter game, which launched in May. The league will consist of a single division and culminate in a championship game.
According to WSJ, Activision is “planning a league charter, salaries and benefits for players, shared revenue among owners, and a season structure familiar to traditional sports fans.” Other plans include broadcasting games online and, possibly, TV, with playoff games at stadiums or other public venues.
Sports-business consultant Marc Ganis reports that challenges in establishing a league include “identifying talent, securing facilities, managing logistics” and a “host of legal issues.” Still, he says, a league could give Activision a great deal of exposure and “help them compete with well-known e-sports titles,” even if significant revenue is not guaranteed.
According to research firm Newzoo, revenue from e-sports is “expected to more than double to $1.07 billion by 2019,” compared to the NFL, which made more than $13 billion last year. Activision Blizzard plans to raise revenues “by selling ownership stakes and through media rights, sponsorships, ads, ticket sales and other tactics commonly used in e-sports.”