By Sarah E. Needleman

Activision Blizzard Inc. acquired Major League Gaming, a well-known producer and broadcaster of videogame competitions, as it works to build a new "e-sports" division.

Activision Blizzard, which makes blockbusters such as "Call of Duty" and "Destiny," said it paid $46 million in cash late last month to buy the majority of Major League Gaming's assets.

While the deal is small by Wall Street standards, it gives Activision Blizzard a boost into the business of streaming live e-sports matches online. Major League Gaming says its MLG.TV attracts more than 20 million monthly viewers on computers, mobile devices and videogame consoles.

In October, Activision created a new division dedicated to e-sports. The company at the time said it hired MLG co-founder Mike Sepso to help run it along with Steve Bornstein, a former head of Walt Disney Co.'s ESPN, who was named chairman. Sundance DiGiovanni, chief executive and co-founder of MLG, will join Activision Blizzard, the company said on Monday.

Last month, rival videogame company Electronic Arts Inc. announced it was creating an e-sports unit of its own. Competitive videogaming is booming in popularity, with live events drawing thousands of spectators on site and millions of viewers online. Teams of professional gamers from around the world vie for millions of dollars in prizes.

Major League Gaming largely makes money through advertising and live events. The industry itself isn't without its struggles--Activision Blizzard is paying less than the $67 million in equity funding Major League Gaming had raised, according to Dow Jones VentureSource.

"We've seen the interest in e-sports grow up faster than the revenue model," said Evan Wilson, an analyst with Pacific Crest Securities.

Under the deal for MLG, Activision will absorb the company's talent pool, which totaled about 60 full-time employees as of October. Mr. Sepso said his division plans to hire "pretty significantly," particularly for management positions, in the coming months.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

(END) Dow Jones Newswires

January 04, 2016 20:55 ET (01:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Activision Blizzard (NASDAQ:ATVI)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Activision Blizzard Charts.
Activision Blizzard (NASDAQ:ATVI)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Activision Blizzard Charts.