Overwatch League's Launch Tests Videogames as Franchise Sport
11 January 2018 - 12:29AM
Dow Jones News
By Sarah E. Needleman
Activision Blizzard Inc.'s "Overwatch" videogame league launches
Wednesday, a crucial test of whether esports can join their
traditional counterparts in the quest for eyeballs and advertising
dollars.
By wrapping videogame contests in a format sports fans
appreciate -- city-based teams backed by familiar names from major
U.S. organizations such as the National Football League -- the
company hopes it eventually can build a franchise that mirrors the
success of professional athletics.
Wall Street analysts, though, think Activision Blizzard faces
significant challenges in converting casual players into dedicated
spectators.
"Overwatch," a cartoonish shooter game, is more difficult to
follow than football or basketball, said Evan Wingren, an analyst
at KeyBanc Capital Markets Inc. There is no ball to track, for
example, and a dozen characters with unique abilities battle across
numerous maps rather than a consistent field such as a baseball
diamond, he said.
Activision Blizzard said it has taken steps to make competitions
watchable, including hiring broadcasters, some from traditional
sports, to explain the on-screen action.
If the closely watched Overwatch League fizzles, it could rattle
other esports endeavors. Take-Two Interactive Software Inc. is
building a pro league for its NBA 2K series in partnership with the
National Basketball Association. It is expected to start later this
year, with 17 teams fielding squads, including the defending NBA
champion Golden State Warriors.
Also at stake is a growth streak that has helped Activision
Blizzard's stock price more than triple in the past three
years.
"There is some value built into Activision's stock for esports,"
said Cowen & Co. analyst Doug Creutz. "If people think the
Overwatch League is a failure, the stock will trade off on
that."
Activision Blizzard, the largest videogame publisher in the U.S.
by market value, said "Overwatch" has 35 million players. For its
league to succeed, it will need to convince those gamers and beyond
to watch others play.
In an age of cord-cutters, though, the company doesn't
necessarily need to conquer traditional media, analysts say. Much
of the growth in viewership is online, fueled by platforms such as
Amazon.com Inc.'s Twitch and Alphabet Inc.'s YouTube.
An estimated 191 million spectators world-wide watch esports
competitions at least once a month, more than double the number
from 2012, according to Newzoo BV. Revenue from sponsorships, media
rights, ticket sales and other sources is expected to eclipse $1
billion by 2019, it estimates.
On Tuesday, Activision Blizzard announced a two-year deal to
stream Overwatch League matches on Twitch. The first matches begin
streaming there at 7 p.m. ET. Some league content also will air on
Activision Blizzard's Major League Gaming platform.
For now, the matches will take place at the former "Tonight
Show" studio in Burbank, Calif., while the teams work to secure
their own facilities for home games. Still, Activision Blizzard is
convinced it can fill seats in its league's respective cities.
"It will be just as common in the future to take your family to
an 'Overwatch' game as it is to a Major League Baseball game," Nate
Nanzer, commissioner of the Overwatch League, said in an
interview.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
January 10, 2018 08:14 ET (13:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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