Gaming the System

The Wall Street Journal reported this morning that gaming giant, Activision Blizzard bought Major League Gaming, one of the world’s largest producers of video game competitions, for just under $50 million.

Just two weeks ago, former NBA star, Rick Fox, completed a purchase of a League of Legends gaming team, Gravity Gaming, for a widely reported price of $1 million.  Another gaming behemoth, Electronic Arts, also announced last month that it was forming a new eSports unit of its own, and saw its stock up over 50% for the year.

This past year saw other notable investments into the gaming space, including one by Madison Square Garden, and with today’s announcement it appears that 2016 will be just as active in the eSports realm.  Research firm, SuperData forecasts that by 2018, eSports will generate $1.8 Billion in revenues, with estimates by that year that it will also have as many active fans as the NFL.

What is driving such interest in the eSports space?  Viewers and active participants, plain and simple.  MLG draws 20 million viewers a month who tune into watch its competitions. ESPN 2 has broadcast such competitions as well.  Just as important are the numbers of active game players, believed to be over 100 million in the United States alone.

The players in these leagues are becoming widely known and attractive to both sponsors and media rights owners.  Hence, Rick Fox’s purchase of a gaming team outright.  Gaming legends such as Johnathan ‘Fatal1ty’ Wendel, debuting a new line of Monster brand headsets this week at the CES show, now draw the type of licensing and sponsor deals previously reserved for athletes in other sports.

To quote the movie, War Games, “Shall we play a game?”