ATVI Activision Blizzard Inc

By Sarah E. Needleman 

Competitive-videogaming enthusiasts believe one day e-sports will be just like traditional sports, with player contracts and a league champion. Activision Blizzard Inc. wants to make that a reality starting as soon as next year.

The biggest videogame company in the U.S. by market value said Friday it is talking to owners of more than 100 traditional and e-sports teams to gauge their interest in joining a league for its videogame "Overwatch" that would operate like the National Football League and other professional sports organizations. The company declined to name any of the people.

Competitive videogaming is often heralded as the next big thing in live entertainment. The consulting firm Activate Inc. projects e-sports will make up roughly 10% of U.S. sports viewing by 2020, reaching 88 million fans.

Any e-sports league would have a long way to go to create brands as recognizable as the New York Yankees. Still, traditional sports names are taking notice. The National Basketball Association's Philadelphia 76ers and European soccer clubs such as Valencia CF already invest in e-sports. Time Warner Inc.'s TBS and Walt Disney Co.'s ESPN networks broadcast contests.

E-sports today is largely a universe of independent teams put together by players and funded by sponsors, competing in tournaments organized by disparate groups and game makers. Dozens of tournaments exist for popular games such as Nintendo Co.'s "Super Smash Bros.," Electronic Arts Inc.'s "Madden NFL" and Tencent Holdings Ltd.'s "League of Legends."

Previous attempts to organize e-sports by companies such as Electronic Sports League, which runs competitions, were mainly marketing efforts. ESL said it has worked with videogame publishes for more than a decade to build an e-sports ecosystem for many games.

Electronic Arts said it has no plans to change its strategy of building e-sports friendly features into games to make them more suitable for tournaments. Riot Games, the Tencent unit that developed "League," one of the most popular e-sports games, declined to comment.

Activision Blizzard began laying the groundwork to go big in e-sports last October, when it created a division led by Steve Bornstein, a former ESPN head and top executive at the NFL Network.

Activision Blizzard plans to hold player tryouts in early 2017 for city-based teams around the globe that would compete in "Overwatch," a popular shooter game launched in May with e-sports in mind. It is planning a league charter, salaries and benefits for players, shared revenue among owners, and a season structure familiar to traditional sports fans.

The league would consist of a single division and would culminate in a championship game. Some details are still being worked out, such as the number of teams. Activision Blizzard won't say how often teams will travel -- a pricey proposition for a global league. The company plans to broadcast games online and possibly TV if it can strike network deals. Playoff games would take place at public venues such as stadiums, where e-sports already draw thousands of fans.

Challenges to establishing such a league include identifying talent, securing facilities, managing logistics, and a "host of legal issues," said Marc Ganis, a sports-business consultant. It is expensive and daunting, but the idea is a good one since it could still heap exposure on Activision Blizzard games and help them compete with well-known e-sports titles, he said.

There is no guarantee significant revenue will follow. Most fans watch e-sports contests online free, with ad-blocking technology at their fingertips. Still, revenue from e-sports is expected to more than double to $1.07 billion by 2019, according to research firm Newzoo BV. The NFL, by comparison, generated more than $13 billion in revenue last year.

In an interview, Chief Executive Bobby Kotick said he expects "significant" revenue from an "Overwatch" league. Activision Blizzard said it would make money by selling ownership stakes and through media rights, sponsorships, ads, ticket sales and other tactics commonly used in e-sports.

Another challenge is fickle fans. Many e-sports viewers skew young and hop on the next big game, said Lee Berke, a sports-media consultant. "If the next videogame comes out and it's something better, they may migrate to that," he said.

Activision Blizzard isn't planning to swap in other games. It thinks "Overwatch" will rank among decades-old franchises such as "StarCraft," which players continue to compete at today.

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

(END) Dow Jones Newswires

November 04, 2016 17:10 ET (21:10 GMT)

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