Activision Blizzard (ATVI - Free Report) recently inked a multi-year deal with Disney (DIS - Free Report) to air the Overwatch E-sports league on ESPN prime time, Disney XD, and various Disney-owned streaming services.
Reportedly, the company also signed deals with Chinese media companies.
Activision introduced Overwatch e-sports league in January this year and the league drew more than 10 million viewers in the opening week. Notably, Overwatch has currently more than 40 million players.
Activision’s league coverage began on Jul 11 and will conclude on Jul 27-28 with the live coverage of Grand Finals, taking place at Barclays Center in Brooklyn, NY. Additionally, the agreement also includes a recap of Grand Finals highlights on Jul 29 on ABC. The company noted that “this is just the start of a multi-year agreement”.
Activision Cashing in on Growing E-sports Popularity
E-sports has been gaining popularity in the last few years and is currently worth more than $500 million. Approximately, more than 130 million people follow various tournaments around the world.
Activision’s Overwatch league follows the model similar to that of other professional leagues.
In the first season, it featured 12 city-based teams split into two divisions. The groups paid $20 million per team to reserve franchise spots this season. Moreover, there are already rumors that the new teams expected to join next season could pay even more.
The overall e-sports economy is expected to total $906 million in 2018, up from $696 million in 2017, according to market research firm Newzoo and scale up to $1.5 billion by 2020.The firm also noted that 77% of the revenues will be generated directly from marketing, sponsorships, and media rights.
We believe Activision is well poised to benefit from this strong growth prospect. Its partnerships with Amazon’s (AMZN - Free Report) Twitch and Disney are expected to enhance popularity of the Overwatch league.
E-sports already enjoys strong viewership. Hence, the partnership also makes sense for Disney’s ESPN division as it is trying to gain more advertising dollars.