Activision Blizzard Acquires eSports Firm Major League Gaming

Activision Blizzard has acquired the businesses of Major League Gaming in a reported $46 million deal that furthers the publisher’s ambitions in competitive gaming.

The deal dramatically expands Activision’s presence in eSports with MLG’s online network dedicated to coverage of competitive gaming and its expertise in organizing professional competitions and running gaming leagues.

“Our acquisition of Major League Gaming’s business furthers our plans to create the ESPN of eSports,” Activision Chief Executive Bobby Kotick said in a statement.

MLG gets a much-needed cash infusion to help grow its premium eSports network, MLG.tv, its North American eSports league, MLG Pro Circuit, and its online game tournament, GameBattles.

“Through this deal, bigger and better things are in store for MLG and our communities and I’m excited about our future at Activision Blizzard,” said MLG Chief Executive Sundance DiGiovanni, who will continue to lead the team.

DiGiovanni said his company was at a crossroads, evaluating whether to raise another investment round or sell. After a year of speaking with potential suitors, MLG selected Activision — a company that he said represented the “best home” for continuing to grow its eSports business.

Activision Blizzard launched a new division devoted to eSports last October and brought in veteran network TV talent to run the unit — hiring former ESPN and NFL Network chief Steve Bornstein to serve as the division’s chairman and MLG co-founder Mike Sepso as senior vice president.

Sepso said the deal not only reunites him with his former business partner, but brings a veteran team that knows how to produce engaging, broadcast-quality shows from the abundance of gaming content found on the Web — little of which is now curated.

“What we think is missing, and what we think we can bring to the table, is that kind of ESPN approach,” said Sepso. “How do we take the best of the best, produce or acquire it, and put it into the premium destination for eSports fans? And from a business point of view, how do we do that in a way that builds a huge fan base and community around that content and is friendly to advertisers?”

Bornstein has said he believes eSports has the potential to rival traditional sports in terms of ticket sales, licensing, sponsorship and merchandising.

That may well be a stretch.

But Wedbush Securities video game analyst Michael Pachter says Activision Blizzard stands to benefit from a reasonable growth in the number of people who watch competitive gaming and purchase tickets or merchandise, thanks to its popular franchises Call of Duty, Starcraft and Heroes of the Storm.

“ESports have about 100 million active users, and they generate about $2 each,” said Pachter. “If 100 million users grows to 200 million, and the spend grows to $5, that’s a billion-dollar opportunity. I think Activision is happy to spend $46 million to capture some of that.”

This article originally appeared on Recode.net.