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Image: Activision Blizzard

Activision’s esports endgame

Activision’s esports endgame

This week in Protocol Gaming, your weekly guide to the business of video games: Activision Blizzard's Johanna Faries on the company's esports bet, Microsoft makes a familiar U-turn and Gabe Newell is interested in your brain.

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The Big Story

Activision's big bet on esports

For Activision Blizzard, esports is still "an emerging business," the company's Head of Leagues Johanna Faries concedes. But across the company, there are hopes that it can be much, much more than that.

"The energy that we're seeing across all of Activision Blizzard," Faries told Protocol, is that "we're not just here to promote upcoming sales of the games." Instead, the company is trying to create "standalone businesses that can thrive in the long term."

  • Last year, that dream seemed an awful lot closer than it had been. With initial plans for a huge in-person arena tour scuttled, the Call of Duty League's debut season quickly transitioned to all-virtual. But despite that, the league final broke CoD viewership records.
  • The pandemic showed "how agile we were able to be," Faries said. That was true of the esports industry as a whole, she thinks, especially when compared to traditional sports leagues that struggled to get back up and running.

It wasn't all easy, of course. Franchise owners were reportedly uneasy about the payments they make to Activision, with the groups supposedly in talks about reducing the fees. But relationships between the owners and Activision remain strong, Faries said.

  • That appears to be true: Faries recently suggested that the CDL might expand to other U.S. cities and even Europe.
  • The optimism is likely due to the rosy prospects for esports as a whole. Faries thinks 2021 will be another growth year, with more engagement from casual audiences and more mainstream media coverage.
  • At Activision specifically, the company plans to use its analytics on CoD and Overwatch players to grow both those leagues. For instance, it will look at the different behavior between Warzone and CoD Mobile players and target them accordingly.

With bigger audiences comes increased brand interest, helping make Activision's standalone business dream a reality.

  • Brands, Faries said, are particularly keen on esports audiences because of their youth. "The average age viewer for our leagues is hovering right around 25, 26 years old, which is really staggering when you compare that to the average age viewer of traditional sports leagues," she said.

Given the growth prospects, it's not unreasonable to wonder if esports ads will ever command Super Bowl prices. Faries said she didn't want to predict the future — but noted that "we're only scratching the surface of the potential of where our esports leagues can go."

— Shakeel Hashim

Overheard

  • "There's really strong interest [in games] — I'm not aware of a single failure or low demand." —Huuuge CEO Anton Gauffin said recent gaming IPOs have made him confident for his own.
  • "Software developers for interactive experience[s] — you'll be absolutely using one of these modified VR head straps to be doing that routinely — simply because there's too much useful data." —Gabe Newell said brain-computer interfaces are coming sooner than you think.
  • "The traditional Wall Street view is that markets are driven by some tie to fundamental value … What we're seeing is an influx of speculative retail traders who don't have any philosophy about valuation." —Newfound Research's Corey Hoffstein said the wild fluctuations in GameStop's stock were driven by Reddit users who are kind of treating the whole thing like ... a video game.

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Power Up

Back to the future

Well, we definitely didn't see this coming: Media center app maker Plex has joined the video game subscription bandwagon with Plex Arcade, a service that lets you play classic Atari games on your Apple TV, mobile phone or web browser, with subscriptions starting at $2.99 per month. Plex Arcade is not exactly cloud gaming, as games are streamed from your own Plex server, but it does offer support for your favorite game controllers, which should set it apart from things like the Archive.org Internet Arcade.

And like much of the game streaming industry, Plex Arcade is considered experimental. From the announcement blog post: "We see it as a kind of internal Kickstarter-type project. If there's interest and we see some subs, it'll grow into the glorious pheasant we know it can be. But if you guys drop the ball, it'll die on the vine like a stomped ass goomba." So, there you go.

— Janko Roettgers

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