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Activision Brings Six New Teams for Overwatch 2019 Season

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Activision (ATVI - Free Report) continues to add new teams to its Overwatch League 2019 season. The company recently brought onboard six new teams for its 2019 season that will join the existing teams from the United States and China along with 12 teams of the 2018 season, taking the total count to 20.

The Overwatch League has city-based teams from Europe, North America and Asia. For the 2019 season, the new teams are Washington DC, Toronto, Hangzhou, Paris, Chengdu and Vancouver. These will join the existing teams from Guangzhou and Atlanta.

Activision, which enjoys an edge against competitors like Electronic Arts (EA - Free Report) with its first major e-sports league, Overwatch, is clearly gaining popularity beyond its domiciled region with nine teams coming from outside of the United States.

This clearly indicates the growing popularity of e-sports, which will eventually lead to increased viewership, user engagement and revenues.

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Activision, which has understood the importance of the game and the need to bring it closer to its users, has inked a few deals to air its content.

Activision’s Deals

Activision recently announced a multi-annual deal with Twitter (TWTR - Free Report) to air Overwatch League’s highlights and live content on the platform.

Additionally, Watchpoint, a weekly preview show, will cover upcoming league matches, which will also be aired on the social media platform.

Moreover, the company also inked a multiyear 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

E-sports already enjoys strong viewership. Hence, the partnership makes sense for Activision as it is increasingly trying to grab more market share in the e-sports segment.

Activision Cashing on Overwatch League’s Popularity

Activision’s Overwatch League had a scintillating start with more than 10 million viewers watching the event in the first week of the inaugural season. Additionally, the league, which concluded this July, attracted increased viewership, sponsors and media coverage, translating into an expanded user base.

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. Additionally, its partnerships with Twitter and Disney are expected to enhance popularity of the Overwatch League.

Even though Activision’s competitors like Electronic Arts and Take-Two Interactive have boosted their partnerships in the e-sports space, Overwatch League’s massive viewership along with an expanding sponsor base is expected to give Activision a competitive edge over its peers.

Notably, EA and ESPN have several deals for FIFA 17 Ultimate and Madden NFL 18. Additionally, Take-Two and the NBA’s inaugural NBA 2K League season are currently streaming on Amazon’s Twitch.

Moreover, the growing popularity of Overwatch League coupled with these partnerships will help Activision increase its audience and the time spent by them on the platform, thereby driving in-game revenues.

Activision currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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