By Paresh Dave
Los Angeles Times
Video game company Activision Blizzard Inc. announced Thursday the addition of a third division alongside game distributor Activision Publishing and developer Blizzard Entertainment. The new, yet-to-be named group will focus on the booming competitive gaming industry known as eSports and be chaired by former ESPN and NFL Network CEO Steve Bornstein.
Many gamers credit Blizzard’s “Starcraft” game for, in the 1990s, kick-starting a number of eSports leagues in which players gather online and offline to play games in hopes of winning trophies and cash prizes. The organized competitions are on the verge of becoming a $1 billion global industry because of sponsorship, ticket, merchandise and broadcast fees.
Gamemakers have supported companies that operate leagues by, for example, building features into games that make them easier to broadcast gameplay online. But few have devoted significant resources to eSports, let alone tried to profit directly from competitions. At most, they’ve seen increased sales of in-game digital goods from the extra playtime.
In a prepared statement, Activision didn’t explain how the new division would further “development of its eSports ecosystem.” Executives declined to comment beyond the statement, citing a legally mandated quiet period before releasing financial results Nov. 3. Activision cound elaborate at its annual Blizzcon fan convention Nov. 6-7 in Anaheim. About $4 million will be awarded in gaming competitions there.
In September, the company announced the “Call of Duty” World League, which will dole out $3 million to pros and amateurs. Strong digital revenue, growth in China and other factors have pushed Activision shares to record highs this year, and analysts at R.W. Baird expect eSports to push earnings per share up as much as 35 cents within five years.