Activision Blizzard’s eSports operations might already be worth nearly $1 billion
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Activision Blizzard’s eSports operations might already be worth nearly $1 billion

Everyone knows that eSports is one of (if not THE) next big things in gaming. And everyone knows that Activision Blizzard is one of (if not THE) leaders in the field. But few people realize the extent to which Activision Blizzard’s eSports operations, which are still in their infancy – the massively popular Overwatch League was only created in January of this year, are already a financial success. The clues to realizing that can be found in CEO Bobby Kotick’s 2017 letter to shareholders.

Activision Blizzard’s share price has surged by 10% over the past 30 days

graph 1506 activision

SOURCE: Yahoo Finance

The first thing to note is that the Overwatch League is really, really, successful – financially, as well as with the players. Activision Blizzard has been selling team ownership to entrepreneurs in major cities around the world, which accounts for most of the revenue generated so far. The 12 teams sold so far have all gone to owners who “either have experience in traditional sports or understand the eSports market.”

These sales have been lucrative, and there is more on the way. Kotick wrote: "we have sold the first 12 teams for almost a quarter of a billion dollars ... and expect our league to eventually grow to 28 teams."

The next thing to note is that the next round of team sales is likely to have a much higher price tag. Of course it is. Since Activision Blizzard created the League six months ago, it’s shot to massive popularity – and it’s clear that something which is engaging so many players is ripe for further monetisation. ESPN says that the original 12 teams sold for around $20 million each – but that we should expect further team sales to cost between $30 million and $60 million.

Writing at Motley Fool, John Ballard says this means that Activision’s teams alone could be worth almost a billion dollars: “At $60 million each, that would represent an additional $960 million in revenue. At the low end of the range, that would be $480 million in revenue.”

When it comes to eSports revenue, though, the long-term big bucks will come from advertising. Kotick is fond of comparisons with the NFL, which generates around $12 billion across all teams. Activision is already moving in that direction, as Kotick wrote: "We have ... sold more than $100 million of over-the-top broadcast rights and sponsorship sales." There’s obviously a long way to go, but given eSports predicted growth by 66% to 2021, it may just be the tip of the iceberg.

In any eventuality, whatever the longer-term holds, eSports already look like they could be worth around $1 billion to Activision Blizzard.


Dominion holds Activision Blizzard in its Global Trends Ecommerce Fund.

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