Facebook taps into growing eSports sector with Activision Blizzard partnership (FB, ATVI)

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Video-gaming behemoth Activision Blizzard has partnered with Facebook to deliver live eSports tournament coverage worldwide, Variety reports.

The broadcast will launch on June 10 2016, for the Major League Gaming (MLG) Anaheim Open – a two-day Call of Duty tournament. It will be streamed from MLG’s Facebook page and feature full-game coverage including match highlights, stats, interviews, and commentary.

This is a big win for Facebook, as the company has been trying to lure live-video partners to its platforms, and Activision Blizzard is one the largest gaming companies in the world.

The eSports industry – video game tournaments that draw in audiences of nonplayers – has been gathering strong momentum recently. Earlier this year, both ESPN and Yahoo launched dedicated eSports verticals on their websites. Even legacy media players are getting in on the act.

In September, Turner Broadcasting and WME/IMG announced that they were forming an eSports league that would debut on TBS. Amazon-owned Twitch, one of the pioneers in this space, receives over 100 million monthly unique viewers, and 1.7 million monthly unique broadcasters. Users view approximately 422 minutes of programming on Twitch, which is more than YouTube’s 291 monthly minutes, according to TechCrunch. 

Tech and media companies have been paying increased attention to eSports for the following reasons:

• eSports have experienced enormous success as live events. The 2015 League of Legends Championship finals (one of eSports biggest titles) brought in 360 million hours of live views, almost doubling 2014’s total of 194 million hours. The finals, meanwhile, registered 36 million unique viewers, and a peak 14 million concurrent viewers. By comparison, the 2015 NBA Finals averaged around 20 million viewers over the six games, and peaked at 28.7 million viewers. It should be noted however that online- and TV-viewership figures are often not measured according to the same standards 
• Large revenue opportunities surrounding eSports. This ranges from online advertising, sponsorships, media rights, and subscriptions. Brands are expected to spend an estimated $320 million in 2016 on eSports sponsorships and advertising, and ad spending on the industry is expected to surpass $800 million in 2019, according to Newzoo CEO Peter Warman. There is also an attractive subscription-model opportunity. Nearly one out of five eSports watchers has paid a subscription fee to view eSports content, according to a study by PriceWaterhouseCoopers. Altogether, eSports is expected to reach $463 million in revenue this year, a 43% increase from 2015, and to surpass $1 billion in revenue by 2019, according to Newzoo.
• Opportunity to partner with hardware – particularly VR – companies. There is a symbiotic relationship between computer hardware companies who build gaming equipment and eSports. For instance, Sony has partnered with Activision and Capcom on a number of gaming tournaments. This should help Sony promote its PlayStation VR gaming platform, and Activision and Capcom promote their PlayStation-exclusive games. Facebook could tap into eSports as a gateway to their own VR hardware products – namely, Oculus.

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