E-sports could soon be very big business..
Competitive gaming could soon be coming to your television on a regular basis. On Tuesday, Activison Blizzard, the largest video game publisher in the world, announced that it had purchased e-sports company Major League Gaming for $46 billion.
According to Activison CEO Bobby Kotick, the plan is to turn MLG into the “ESPN of e-sports,” with television and satellite broadcasting of its tournaments. Beyond that though, Kotick offered few firm details of how he plans to play with Activision’s new $46 million toy. Still, there are a few ways we can see this playing out in the coming months.
A New Dedicated Gaming TV Channel
There has been a serious lack of video game-related content on television since G4 signed off in 2014, and given that gaming is a billion dollar industry, it seems like someone is seriously missing a golden opportunity to deliver hours of content to a starved audience. Kotick’s comments about making MLG the “ESPN of e-sports” and bringing it to cable are interesting, particularly given ESPN’s pretty awful attempts at covering major competitive gaming events so far, like last year’s The International 5 DOTA 2 competition.
The International 5 paid out over $18 million in total prize money, with the winning team took home a little over $6.5 million. That’s roughly double what Novak Djokovic took home for winning the U.S. Open tennis tournament in 2015. Yeah, this is big business.
But maybe even more interesting about the comparison, ESPN doesn’t just broadcast games as they’re being played. In fact, most of ESPN’s content is actually news and analysis. SportsCenter is a highlights show. And given that MLG only hosts events a few times a ear, something else would have to fill all those hours of programming.
Activision could be sensing a huge opportunity to launch a video game network centered not just on MLG and competitive games, but on all facets of gaming. Basically what G4 was supposed to be before it started airing nothing but Cops re-runs.
Bigger, Better Events
MLG always had a lot of cash on hand (more on that in a minute) and it previously put on some large events that drew more than 20,000 people. But competitive gaming still remains niche. Activision may want MLG to be the next ESPN, but right now it barely registers as the WNBA. A lot of people kind of know in the back of their minds that the competitive gaming scene is there, but it’s not something they think about very often.
Still, Activision is a $14 billion company. If it wants MLG to take off, there’s really no limit to what it can spend on marketing to get people more interested. Celebrities? Tournaments held in professional sports stadiums that can hold 40,000 or 50,000 people? Three-day long tournaments with rock bands, lasers, and fireworks? The sky is the limit for how elaborate Activison could make its first MLG Tournament if it thinks it thinks that’s the ticket to bringing in a larger audience.
More E-sport Friendly Games From Activision
Activision games are already pretty popular on the pro gaming circuit. Starcraft II and Call of Duty have both previously featured in MLG tournaments, but MLG has also organized tournaments around a lot of games that Activision has nothing to do with, like Halo and Counter-Strike. The next MLG “Major” is set for March and focuses on Valve’s Counter-Strike: Global Offensive.
Activision has no plans to change that up now, and doing so wouldn’t make much sense with it just two months away. But looking forward, why would Activision want to feature games that it didn’t publish in MLG tournaments? It’s just free advertising for its competitors. Furthermore, there will probably be more pressure from within the company to develop the next big shooter or MOBA that can be featured regularly in MLG tournaments. If Activision’s upcoming Overwatch takes off as a competitive game, it’s only going to be a part of MLG events, which is only going to make Activision and MLG more money.
But In The End, It May Not Work
Here’s the dirty little secret about MLG: It could put on a decent tournament that got a lot of press, and the league could get tens millions of people to stream it, but it also didn’t make any money. MLG took out a $6 million loan last year just to pay the bills, and a lot of its prize purses came directly from game publishers. That’s like if the NFL only paid its players based on the good will of advertisers like McDonald’s and Pepsi. And while it sounds impressive to say MLG sold for $46 million, that number really isn’t so great when you realize that venture capitalists previously pumped $69 million into it.
There’s also the challenge from outside sources if Activision tries to be too insular with what makes it into MLG tournaments and coverage. Valve, publisher of games like DOTA 2, Counter-Strike, and Team Fortress 2 and PC distribution service Steam, isn’t quite as big as Activision, but it does have an arguably better reputation in the competitive scene. DOTA 2 tournaments are routinely among the most lucrative in the world, and its main competitor is League of Legends, another game to which Activision has no relation. Numerous fighting games from several different publishers (notably Capcom) are also popular competitive and spectator games which Activision would need either to replace with their own product or develop good partnerships with. Cutting out these games from MLG coverage would be, quite literally, the death knell of any wish for MLG to become an e-sports ESPN.
In theory, there’s money to be made from competitive gaming and its fans, but no one has figured out how to capitalize on it yet. And Activision may already be too late as ESPN itself has made moves towards featuring more competitive gaming on its channels. Activision does have a proven track record selling games, so if any publisher is in a position to bring MLG into the mainstream, it’s them. Then again, if a new a new network and a few big tournaments don’t really go anywhere, the company isn’t out much. That $46 million price tag is literally peanuts to a company worth as much as Activision. Then it will be up to someone else to bring e-sports to the masses.