Despite being only a few days, this year’s biggest business move in the gaming industry may have just been made. Major League Gaming (MLG) has been arguably the biggest esports organization in the world. However, in spite of competitive gaming’s explosive growth over the past few years, MLG has not been able to make a profit. In 2015, they had to perform multiple rounds of debt financing, which totaled to $6 million. It was no secret that MLG was hurting financially with no solution in sight. That is, until this past month.
Enter Activision Blizzard
Over the last couple weeks, there had been speculation that MLG had been purchased by Activision Blizzard for $46 million. This speculation was put to rest when a letter was sent out to stockholders late December. As it turns out, MLG’s Board of Directors agreed to a Asset Purchase Agreement to the rumored amount. In addition to that, MLG CEO Sundance DiGiovanni was forced out of his position. Ex-MLG CFO Greg Chisholm takes his place.
Major League Gaming’s Return to Form?
Due to the nature of the acquisition, we were unsure of Activision Blizzard’s intentions with MLG’s assets. Thanks to a press release that was sent out Monday afternoon, we now have a little more insight on the future of Major League Gaming. In this press release, we found out that MLG will function as part of Activision Blizzard’s media branch, which is being lead by MLG Co-founder Mike Sepso and former ESPN CEO Steve Bornstein. Activision Blizzard CEO Bobby Kotick elaborates:
“Our acquisition of Major League Gaming’s business furthers our plans to create the ESPN of esports. MLG’s ability to create premium content and its proven broadcast technology platform – including its live streaming capabilities – strengthens our strategic position in competitive gaming. MLG has an incredibly strong and seasoned team and a thriving community. Together, we will create new ways to celebrate players and their unique skills, dedication and commitment to gaming. We are excited to add Sundance and the entire MLG esports team to our competitive gaming initiatives.”
While there is concern that Activision Blizzard will change the direction of Major League Gaming’s tournament structure or choice of games, there has been little evidence of such. The press release states that MLG will continue its Pro Circuit, online tournaments, and premium streaming service. Adam Apicella, a representative of MLG, recently tweeted that qualifying tournaments for Counterstrike: Global Offensive will resume. It seems to be business as usual for MLG, despite the corporate acrobatics that have taken place.
[toggle title=”Press Release”]ACTIVISION BLIZZARD ACQUIRES THE BUSINESS
OF MAJOR LEAGUE GAMING
MLG to Serve as the Foundation for Activision Blizzard’s Esports Broadcast Network
SANTA MONICA, Calif. – January 4, 2015 – Activision Blizzard, Inc. (Nasdaq: ATVI) today announced the acquisition of the business of Major League Gaming (MLG). MLG is a leader in creating and streaming premium live gaming events, organizing professional competitions and running competitive gaming leagues. The acquisition expands Activision Blizzard’s reach across the rapidly-growing esports ecosystem by adding proven live streaming capabilities and technologies to the Activision Blizzard Media Networks division, led by former ESPN CEO Steve Bornstein and MLG Co-founder Mike Sepso.
Bobby Kotick, Chief Executive Officer of Activision Blizzard, said, “Our acquisition of Major League Gaming’s business furthers our plans to create the ESPN of esports. MLG’s ability to create premium content and its proven broadcast technology platform – including its live streaming capabilities – strengthens our strategic position in competitive gaming. MLG has an incredibly strong and seasoned team and a thriving community. Together, we will create new ways to celebrate players and their unique skills, dedication and commitment to gaming. We are excited to add Sundance and the entire MLG esports team to our competitive gaming initiatives.”
Sundance DiGiovanni, Chief Executive Officer and MLG Co-founder, said, “Our mission for over 12 years has been to promote and expand the growth of competitive gaming worldwide, and today the industry is at a key inflection point as its popularity soars and rivals that of many traditional professional sports. This acquisition and Activision Blizzard’s commitment to competitive gaming will expand the opportunities for gamers to be recognized and celebrated for their competitive excellence.”
Mike Sepso, Senior Vice President of Activision Blizzard Media Networks and MLG Co-founder, said, “Sundance and I founded MLG to highlight the incredible talent of competitive gamers all over the world. Activision Blizzard’s esports leadership, incredible intellectual property and long history in competitive gaming create a perfect home for MLG’s capabilities. The acquisition of MLG’s business is an important step towards Activision Blizzard Media Networks’ broader mission to bring esports into the mainstream by creating and broadcasting premium esports content, organizing global league play and expanding distribution with key gaming partners.”
MLG will continue to operate MLG.tv, MLG Pro Circuit and GameBattles platforms, and will continue to work with its partners and other publishers across the industry. MLG.tv is a premium online broadcast network for professional-level esports and the MLG Pro Circuit is the longest-running esports league in North America. GameBattles is the largest online gaming tournament system across consoles, PC and mobile platforms.
With over 100 million unique viewers, the esports audience is estimated to be bigger than audiences for many professional sports leagues. Creating premium content for these audiences will provide significant opportunities in ticket sales, advertising, sponsorships, licensing and merchandising. By 2017, esports is projected to have over 300 million viewers. For the past 12 years, MLG has helped bring esports into the mainstream with broadcasts of professional gaming competitions that rival traditional sports fan engagement.
About Activision Blizzard
Activision Blizzard, Inc., a member of the S&P 500, is the world’s most successful standalone interactive entertainment company. Activision Blizzard develops and publishes games based on some of the most beloved entertainment franchises, including Call of Duty®, Destiny, Skylanders®, Guitar Hero®, World of Warcraft®, StarCraft®, Diablo®, and Hearthstone®: Heroes of Warcraft™. The company is one of the FORTUNE “100 Best Companies To Work For®” 2015. Headquartered in Santa Monica, California, Activision Blizzard has operations throughout the world, and its games are played in 196 countries. More information about Activision Blizzard and its products can be found on the company’s website, www.activisionblizzard.com.[/toggle]