Activision Blizzard bought the struggling esports organization MLG primarily for the streaming opportunities it offers. And it was also cheap.
Analysts from various firms paint a clear picture to the business magazine Fortune: The MLG had overextended itself. A stadium was to be built in China, and then there was ESL, another competitor on their heels. Even though esports is a booming sector, MLG has likely found itself in financial trouble in recent months and was looking for a buyer. They had trouble capitalizing on their own success financially.
Analysts believe that the league has become unfocused. The loss of Call of Duty to ESL and the departure of one of its key figures were seen as contributing factors.
After negotiations with Yahoo ended fruitlessly in October, Activision Blizzard struck.
Activision Blizzard wants to leverage streaming opportunities and broadcasting experience
This came to light last week. A disappointed MLG shareholder angrily shared information with a smaller U.S. site. However, both MLG and Blizzard remained silent for a long time. Yesterday, the official press release came out: Yes, we have bought MLG. No numbers were disclosed. According to the first source, MLG cost Activision 46 million U.S. dollars – quite a bargain when you consider, the amounts they usually operate in.
Now that the deal is done, the heads of Activision are using flattering words. CEO Bobby Kotick speaks of MLG being able to produce “premium content” and having proven technology for broadcasting their shows – this includes live-streaming capabilities. All of this strengthens Activision’s strategic position.
According to Kotick, the plan is to establish the “ESPN” of esports. The acquisition of MLG helps with that. ESPN is the major U.S. sports network. Like Sport1 multiplied by a factor of 100. Activision believes, and supports itself with analysts, that the esports audience will grow to 300 million people by 2017. They clearly want to be a part of that.
The esports team of MLG will be taken over by Activision Blizzard. The CEO Sundance DiGiovanni will also be on board. Initially, there were reports that he would be completely out, but he is just switching to the new boss.
According to DiGiovanni, esports is currently at a turning point, the popularity of esports is rising and competing with many traditional sports. This acquisition will provide new opportunities for “competitive play” and help recognize players who achieve extraordinary feats.
They had already acquired the co-founder of MLG… now they got the rest
MLG is now supposed to continue as planned following the acquisition, working with partners and other publishers. As stated to the U.S. site Gamespot, Activision Blizzard did not step in to interfere with MLG’s existing activities, but rather wants to add things. It will largely continue as it has been – just better. This statement comes from Mike Sespo, a co-founder of MLG. Blizzard had already brought him on board a few months ago to lead the new, own esports division.
Now they have also snatched up the rest of MLG.
Somewhat concerning: Sepso’s partner in leading the esports division is Steve Bornstein. He actually used to run ESPN… the sports network they now want to emulate.
