Activision Blizzard Enters E-Sports Market

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Activision Blizzard, the largest U.S.- based video game creator, recently formed a division to target the fast-growing business of e-sports, where video-game players compete against each other for prizes in front of live and online audiences. The move follows Amazon's August acquisition of Twitch Interactive for $970 million, an online video network focused on gamers.

For years, Activision has hosted tournaments, such as its annual BlizzCon convention, held this year in Anaheim, California. In e-sports, contestants play games such as "League of Legends," from Riot Games, Valve Corp.'s "Dota 2" and Activision's "Call of Duty" in tournaments, many of which are broadcast online or on TV.

The business originated in South Korea, where dedicated TV channels Ongamenet and MBC Game air regularly scheduled competitions, according to an Oct. 5 report from the brokerage firm Robert W. Baird & Co. E-sports, which now attract some 200 million viewers around the world, could become a $1 billion business by 2020, according to Baird. That's up from $300 million this year.

Advertising and sponsorships are the main sources of revenue, followed by ticket sales and merchandise. For game publishers, the tournaments also increase awareness and purchases of their products.

In the U.S., e-sports contests appear on Amazon's Twitch network, as well as Google's YouTube channels. Time Warner's Turner Broadcasting division said last month it will air competitions on the TBS network on Friday nights starting next year. The first will feature "Valve's Counter-Strike: Global Offensive," a combat game.

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