AFK Weekly: Microsoft to Acquire Activision Blizzard in Historic Deal
Hello everyone! Microsoft’s historic acquisition of Activision Blizzard and the possible repercussions has dominated all of our news feeds this week. But there have also been plenty of other interesting developments in the industry that have gone under the radar as a result. For instance, Battlegrounds Mobile India's first-ever national championship, the iQOO Battlegrounds Mobile India Series 2021, was a massive success securing a peak viewership of over 460K with a total watch time of 15.29M hours.
Following the conclusion of the tournament, Indian team Godlike Esports is currently competing in the PUBG Mobile Global Championship 2021: Grand Finals. This is the first time an Indian team is making an appearance on the global circuit since the game was banned by the government in September 2020. Considering the volume of India’s esports viewership, this could result in a boost to PUBG Mobile’s viewership numbers.
Here’s a breakdown of this week’s most impactful and important esports business news and more in the latest edition of Esports Business Insights by AFK Gaming.
- Vignesh Raghuram, Supervising Editor, AFK Gaming
The biggest deal in video game history: Microsoft to buy Activision Blizzard
Microsoft shocked the world on Tuesday when it announced that it would acquire Call of Duty, Overwatch, and World of Warcraft publisher Activision Blizzard for $68.7B USD in an all cash deal. The Xbox and Windows owner will pay Activision Blizzard shareholders $95 a share.
While both the boards of Microsoft and Activision Blizzard have approved the deal, it is still subject to “closing conditions and completion of regulatory review.” Microsoft expects that acquisition to be complete “by the close fiscal year 2023” (sometime before June 30, 2023). Should the deal fall apart, Microsoft will pay Activision Blizzard a breakup fee of $2.5B before April 18, 2023, or $3B after that date. If Activision Blizzard decides to end the deal (for whatever reason) it would pay Microsoft $2.27B.
Activision Blizzard CEO Bobby Kotick will remain in charge until the completion of the transaction, after which he will exit the company, according to Wall Street Journal.
After the transaction completes, Microsoft will be the third-largest game publisher in the world (by revenue) behind Tencent and Sony. The company will also own some of the biggest IPs and esports leagues in gaming including Candy Crush, Diablo, World of Warcraft, Starcraft, Major League Gaming, Call of Duty League, Overwatch League, and many more. It will also take control of studios around the world that employ more than 10,000 employees including Raven Software, Treyarch, Blizzard, King, Splash Damage, and many more (you can find an exhaustive list here).
This is the biggest transaction in video games history, with the nearest deal being Microsoft’s acquisition of Fallout and Elder Scrolls maker Bethesda for $7.5B in 2021.
While Microsoft used the word “mateverse” in its announcement, it’s pretty clear that the acquisition is meant to strengthen it’s already deep library of IPs for its Xbox gaming division, with the King division giving the company some major IP for mobile. Like its deal with Bethesda last year, Microsoft said that it will honor Activision Blizzard’s existing contracts with other platform holders like Sony and Nintendo (which means games like Call of Duty won’t suddenly become Xbox/Game Pass exclusives).
Key Takeaway: This deal is interesting for the esports industry simply because it puts Major League Gaming, Overwatch League, Call of Duty League, Hearthstone, Word of Warcraft, and Halo esports under one roof. It’s too soon to speculate how Microsoft will handle these properties at this point in time, but perhaps the biggest winner is Esports Engine, the Vindex-owned esports production company; Vindex founders Mike Sepso and Sundance DiGiovanni could be reunited with Major League Gaming, the company they later sold to Activision Blizzard. Esports Engine has worked with every major esports league in the world including Halo, CDL, and OWL.
- James Fudge
Riot Games renews multiple partnerships for Valorant Champions Tour NA 2022
Riot Games has expanded and renewed several partnerships ahead of the kickoff of the Valorant Champions Tour (VCT) NA 2022 - Stage 1. The company has renewed its partnerships with Verizon, Secretlab, and Aim Lab. The three companies were also part of the inaugural VCT circuit with Verizon sponsoring last year’s Game Changers series of events, while Secretlab and Aim Lab partnered with Riot for VCT Challengers North America. The three aforementioned companies and Red Bull will be Signature Partners of VCT NA, according to Riot’s release.
Riot has also renewed its partnership with Nerd Street Gamers for the 2022 Valorant Champions Tour. The deal will see Nerd Street Gamers lead the tournament circuit’s “operations and broadcast” in the North American region for the first stage of the VCT 2022 season. The company will also operate all three Game Changers events, Riot's program for increasing the number of opportunities for female gamers and other marginalized groups.
Nerd Street Gamers also has a long-standing relationship with Riot having operated VCT NA Challengers events like the NA Masters One, Stage 2 Challengers Finals, and Stage 3 Challengers Playoffs. The two companies also collaborated for all three North American Game Changers series.
Key Takeaway: Riot’s continued commitment to working with third parties for Valorant is extremely encouraging for the industry. It’s clear that franchise systems won’t become the standard for the company any time soon which allows for a much larger and healthier overall global ecosystem. This also bodes well for future Riot titles that don’t map well onto a franchise system such as the upcoming fighting game and MMO. With the fate of the Overwatch and Call of Duty Leagues still very much in question, it seems third party organizers will remain an important part of the esports industry for the foreseeable future.
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Guild Esports inks $6.1M deal with crypto-exchange Bitstamp
Guild Esports has announced a three-year partnership with cryptocurrency exchange Bitstamp. The $6.1M deal will see the crypto-exchange appear on Guild’s jerseys, on its social media platforms, and digital content. The team's London HQ, slated to open in early 2022, will also feature Bitstamp's logo and brand.
Tencent and Olympic Council of Asia collaborate to promote esports in Asia
The Olympic Council of Asia and the Asian Electronic Sports Federation have partnered with Tencent to promote the development of esports. According to Pandaily, both organizations will work together in cultural exchanges, technical personnel training, support in Asian competitions, digital sports research, and other aspects. The organizations will also work together on the ‘Road to Asian Games’ tournament, in which teams from 45 countries and regions will be competing in the eight esports titles that will be featured in the 2022 Asian Games.
Team Liquid signs all-women Brazilian Valorant Roster
Team Liquid has signed a Brazil-based women’s team that will compete in Valorant, adding to its growing presence in the region which include rosters in Free Fire, Rainbow Six Siege, and Fortnite.
NetEase Games releases trailer for its new 5v5 mobile FPS title
NetEase Games has released a trailer for Hyper Front, its upcoming “free-to-play 5V5 hero-based” mobile FPS title. The trailer showcased some of the game’s heroes and their abilities which bear resemblance to designs, abilities, and gameplay elements from Riot’s Valorant. In July 2017, Riot sued Moonton over copyright infringement through a California District Court. However, the case was dismissed shortly after. Following this, Tencent sued Moonton in Shanghai on behalf of Riot and won $2.9M in compensation.
FaZe Clan launch $1M FaZe1 recruitment challenge
FaZe Clan has officially launched its FaZe1 Recruitment Challenge featuring over $1M in possible prizes alongside the chance to become a member of the organization. The winner will receive $1M in cryptocurrency through crypto-exchange Moonpay, a $250K GFuel sponsorship, and a new Nissan GTR car.
On the horizon
The Call of Duty League season begins this weekend with the Kickoff Classic tournament. The league returned to CoD’s roots of 4v4 competition for the current season, but with negative press still looming over the company and a less-than-stellar reception for the latest entry in the franchise, it remains to be seen whether the CDL can grow (or even maintain) its viewership in an ongoing pandemic era that actively prevents one of its largest selling points.
That said, the CDL’s more regional nature and smaller scale allows for much easier adaptation and offline competition than its sister league. Call of Duty is also a much more powerful IP than Overwatch in its current state. If either league were going to turn things around in 2022, CDL is the far safer bet.
People on the Move
It’s been a brisk week in the world of video games and esports, but one of the most notable hires happened at Australian-based firm BIG Esports; the company announced the hiring of video games industry exec Sonali A Abrol as its new business development and accounts director. In the past Abrol served as digital business manager at Nintendo, ANZ marketing manager at mobile game maker Gameloft, international brand/product manager at game publisher Ubisoft, and digital business & marketing associate manager at videogame services company Gameshastra.
Also of note, Subnation has hired multiple game industry veterans including Justin Burnham (SVP physical & digital experiences), Daniel Herz (SVP of business development), Andy Ochiltree (VP of gaming), and Seth Pyrzynski (VP of strategy & innovation, Web3).
Here are the rest of this week’s promotions, exits, and hires:
Matt McGlynn joins OverActive Media Group as its new VP of marketing and brand.
Ryan Biddy joins Evil Geniuses as its new director of digital & social strategy.
Jake Pedro has been promoted to the role of director of competitive operations at Immortals.
Ali Rezvan joins Esports Engine as the new competition operations lead.
Isaac Gamble is named product manager at Cloud9.
Thajudeen Abdul Kadhar joins Dubai-based Abdulla Al Gurg Global Investments as its new head of marketing - esports.
Gene Chorba exits Riot Games after more than four years as its senior developer relations manager.
Anas Al Hakim has been promoted to brand manager - action for the MENA region at Riot Games.
Olia Fadeeva has been promoted to senior brand manager at Riot Games Northern Europe.
Nathan Lindberg has left Twitch to join Epic Games-owned SuperAwesome as revenue lead, gaming.
Miranda Chhour joins HyperX as the new esports sponsorships coordinator.
Jack Appleby has left his position as creative strategy director at Twitch.
Kelsey Moser has left Evil Geniuses to join Riot’s LCS Academy as its new academy broadcast producer.
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