Activision Blizzard Reports Better-Than-Expected Q1 Results, Goes All-In On eSports

Activision Blizzard earnings call

Activision Blizzard, the big entertainment player in the competitive gaming industry, has recently issued its 2016 first quarter results, and they are better than expected.

It has been known in the past that the company has big plans for eSports and with such results, it now has the affirmation that it’s heading in the right direction.

Great progress in a great industry

The eSports market has been proving itself over and over again and is definitely here to stay. Seeing great progress for its events, the California-based interactive gaming and entertainment company is going all-in on the eSports industry.

In its Q1 earnings call, CEO Bobby Kotick emphasized the revenue opportunities for the company’s eSports business, and shared his vision for the segment as the next big revenue driver for Activision.

As Kotick put it:

“eSports viewership is greater than the individual audiences for NHL, Major League Baseball, or the NBA, which means that we’re barely in the first inning of opportunity for games as organized sport.”

The company’s main titles, namely Call of Duty, Hearthstone, and Overwatch, “could each have audiences in excess of any of the most well known sports leagues” – growth expectation that the CEO sees for the organization.

Broadcasting revenues will be one of the main points of interest

NFL broadcasting revenues are expected to generate over $7 billion in 2016. This is great information for a viewership-based industry like eSports and Kotick expects that eSports events will command their fair share of broadcasting revenues in the future.

Activision, including the recently-acquired developer King, had about 42 billion hours of played and watched time spent over the past twelve months, which is similar to video viewing on some of the largest entertainment networks in the world, including major professional U.S. sports leagues on national TV combined (e.g. NFL, NBA, MLB, NHL, and MLS).

eSports will boost Activision’s business

Kotick also shared his thoughts of how the company can capitalize on the success of the competitive gaming industry:

“I think when you try to get the untapped opportunities, though, that enable you to do a lot of these things, we have this very virtuous cycle: People pay to participate, sponsors are willing to finance events, those events then become the content that’s broadcast on our network or on other networks.

Those events then lead to having the ability to have regional events, national events, international events, all of these things have the opportunity for us to expand to have broadcast rights, licensing and merchandising, ticket sales, local sponsorships, national sponsorships – and these are all things we are very actively engaged in. Not to mention all the opportunities to sell our professional teams for our professional leagues.”

Perfectly positioned for the future

With an expanded eSports division and ongoing acquisition activities, Blizzard is on the right path for more future success. Having this in mind, Kotick concluded his view for the future by saying “the company is better positioned than any entertainment company to take advantage of the opportunities ahead.”

Dejan Zalik

About

Dejan has been involved in gaming for over 10 years. Moving from classics like Diablo 2, Lineage 2, and Warcraft 3, he found his passion in Dota 2, which he’s been playing ever since. He also likes to keep up to date by reading and writing about whatever is happening in the industry.