Activision's (ATVI) 2019 Overwatch League Features New Teams

Activision Blizzard’s (NASDAQ:ATVI) much anticipated 2019 Overwatch League began on Feb 14. Eight new teams are participating this season that brings the total number of teams to 20. They are competing for a prize pool of $5 million.

The new season not only features an extended team line-up but also new venues and expansion in digital and broadcasting distribution. This is expected to drive fan following for the league as well as the Overwatch game, which will ultimately boost Activision’s top-line growth.

In fact, eSports presents significant growth opportunity for game developers like Activision. Per Newzoo, the global eSports audience will total 456 million in 2019 compared with 2018’s 395 million. Moreover, Deloitte Global predicts that in 2019, the North American market for eSports will expand 35%, driven by advertising, broadcast licensing, and franchise sales.

Notably, Activision and NetEase have extended their agreement till January 2023, which will now allow Blizzard to publish a host of games, including Overwatch for Chinese users.

Given the growing popularity of eSports, Activision is looking to build a city-based Call of Duty league banking on the experience gathered from the successful Overwatch league.

2019 Overwatch League Details

All the 20 teams have matches scheduled in the first week, including a match between 2018 champions London Spitfire and runners-up Philadelphia Fusion.

Notably, the Stage playoffs will be held for Stage 1, 2 and 3. Eight teams will qualify, including the two division leaders in that stage and the next six teams in the stage standings regardless of division.

Moreover, the number of venues has increased, which reflects growing appeal of the league. Although most of the matches will be played at Blizzard Arena Los Angeles, Homestand Weekend events will be held at Dallas, Atlanta and Los Angeles.

Expanded Broadcast & Digital Distribution

The games can be watched through Twitch All-Access Pass program as well as on linear and digital broadcast platforms, including Overwatchleague.com and the Overwatch League app, MLG.com and the MLG app, Blizzard battle.net, Disney XD, ESPN, and ABC.

All 2019 Overwatch League matches will be available on Twitch platforms, including Twitch.tv, the Twitch mobile app, and Twitch apps on game consoles and TV devices.

Per Activision “All-Access passholders can customize their match-viewing experience with the multi-view Command Center, represent their favorite players with gear and skins, and engage more directly with Overwatch League players and the fan community.”

Fans in North America can watch all 2019 regular-season matches on the ESPN app. Disney XD will air three matches per week. While the Stage 1 and 2 Playoffs, and the All-Star Game will air on ABC. ESPN2 will broadcast the Stage 3 Finals.

The games will also be available in China on overwatchleague.cn and the Overwatch League app as well as on platforms like Zhanqi.tv, NetEase CC, Bilibili and Huya. While Mediawan will show league highlights on the Mangas Network in France, Sport1 will air live matches on Esports1 and league highlights on Sport1 in Germany.

Moreover, Twitter (NYSE:TWTR) will host live streaming of daily Watchpoint shows, immediately before and after the match on match days. It will also stream a selection of Overwatch League clips from live matches.

Conclusion

Activision shares have underperformed the industry in the past year, primarily due to increasing competition from the likes of Electronic Arts (NASDAQ:EA) , Take Two Interactive (NASDAQ:TTWO) and Epic’s Fortnite. However, the company’s flourishing eSports business has been a bright spot.

Notably, the company provided dismal 2019 guidance, due to no major releases at Blizzard division and lower in-game monetization. However, Activision expects to deploy more resources (about 20%) in its franchises, including Call of Duty and Overwatch. This is expected to boost features that will eventually drive bookings and top-line growth.

Activision currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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