Update: Contrary to earlier reports, MLG is not being liquidated by Activision, but retained by the new owners as an esports-focused division of the major publisher. MLG will exist under the existing Activision Blizzard Media Networks (ABMN) division, and current MLG CEO Sundance DiGiovanni will stay on, working with former ESPN CEO Steve Bornstein and MLG Co-founder Mike Sepso in ABMN. Ars regrets the error.

"Our acquisition of Major League Gaming's business furthers our plans to create the ESPN of esports," Activision Blizzard CEO Bobby Kotcik said in a statement. "MLG's ability to create premium content and its proven broadcast technology platform - including its live streaming capabilities - strengthens our strategic position in competitive gaming."

Original story

Major League Gaming, the once mighty American e-sports organisation, has been bought by Activision Blizzard in a $46 million (£31 million) deal. MLG will be dissolved as part of the deal, with Activision Blizzard picking up most of its remaining assets.

MLG has struggled in recent years following its early success organising tournaments for the likes of StarCraft 2 and Call of Duty, and has had to seek debt financing to the tune of $6 million (£4 million) to meet its financial obligations. In October, MLG also lost the hosting rights to the Call of Duty World League's Pro Division to rival ESL (Electronic Sports League).

According to a report from eSports Observer, which claims to have obtained documents detailing the sale, the majority of the $46 million will go towards paying off MLG's debts, leaving little for stockholders. Unsurprisingly, many shareholders are disappointed with the deal, which went ahead without their consent thanks to a legal loophole in Delaware General Corporation Law.

As part of the deal, CEO Sundance DiGiovanni has been replaced by Greg Chisholm, MLG's former CFO. Last year, MLG co-founder Mike Sepso left MLG in October 2015, to join Activision Blizzard's new e-sports division. Former ESPN and NFL Network CEO Steve Bornstein also joined the division, which is built on top of the IGN Pro League the company bought out in 2013.

While MLG tournaments featuring Activision Blizzard games will likely carry on under Activision, it's not yet clear how the purchase will affect tournaments like the upcoming Counter-Strike: Global Offensive Major Championship. Regardless, with companies like Valve and Riot running their own tournaments for games like Dota 2 and League of Legends, organisations like MLG are rapidly becoming unnecessary.

Fellow publisher EA has recently jumped on the e-sports bandwagon too, launching its Competitive Gaming Division (CGD) in order to turning existing EA games like FIFA, Madden NFL, and Battlefield into viable e-sports franchises.