(Photo: The Next Level)

[Full Launch Coming Soon: Media. Data. Brands. Investment.]

EXCLUSIVE: HOW BLIZZARD PLANS TO MAKE MONEY FROM ESPORTS

(Photo: Activision-Blizzard)

My Take: There are a few companies in the eSports space that I’m fascinated by and Blizzard is one of them. Blizzard’s StarCraft is usually referred to as the Birth of eSports and was considered Korea’s National Sport at one point.

In my analysis of Tencent’s eSports Domination in THE NEXT LEVEL 017 (Tencent has a 12.5% stake in Activision-Blizzard), I mentioned Blizzard’s vast stable of eSports titles: StarCraft, Hearthstone, Heroes of the Storm and the current massive hit Overwatch. No other developer on the planet can boast Blizzard’s expertise in multiplayer gameplay across multiple genre’s (not just First Person Shooters — you know who you are).

While Activision has done a decent job monetizing Call of Duty from a Media and Brand perspective, Blizzard has been relatively quiet on this front, with Overwatch being the exception.

That’s all about to change.

Over the weekend, I found this listing on Blizzard’s site for a “Business Development Director, Sports” (Note: I think that’s a typo and this was posted in May:

(Photo: Blizzard)

You may think that it’s hard to glean strategy from just a Job Description but from what Supercell revealed in their Mobile eSports position it’s not hard to draw similar parallels (FYI, that Supercell job is no longer listed so expect a hiring announcement soon). The first four bullet points alone spell it out and here are my big takeaways:

/01 BROADCAST RIGHTS

The first main responsibility is around developing the broadcast, distribution and monetization strategy. This is very interesting — go right now to Twitch and I bet you that 2 of the Top 5 games are Blizzard titles: Hearthstone and Overwatch. Now remember, Blizzard signed what I believe to be a landmark deal in the live streaming space with Facebook.

In THE NEXT LEVEL 004, I said that comparing eSports revenue to Sports revenue was ludicrous. In a February investor call, Activision CEO Bobby Kotick said :

“What we step back and look at is ESPN,” he said. “And when you look at ESPN with 80 million subscribers and you see the flight of some of the subscribers. The opportunities that we see there is roughly $5 billion of operating profit, $4 billion of league payments for the broadcast rights. We have 80 million of our own players.”

I think Bobby is crazy to expect those numbers (especially when that 80M figure probably includes Candy Crush players) but I think he’s a genius when it comes to future foresight, IP creation and Media value. This is the first step towards this vision.

So what does this mean to Blizzard content on Twitch going forward? Not sure at this moment. But you know who’s happy that Facebook and Twitch will be battling for eSports content? This guy:

(Photo: Activision-Blizzard)

/02 SPONSORSHIP

Outside of licensing Blizzard’s broadcasting, the next task is to further monetize the vast audience through Advertising and Sponsorship. Few key points here:

I’ve seen this movie before. Many. Times. Before. Blizzard thinks that someone whose primary experience has been “in broadcasting rights, negotiating media deals, and business development” and expects them to educate Brands and Agencies on the eSports opportunity? — best of luck.

Blizzard thinks that someone whose primary experience has been “in broadcasting rights, negotiating media deals, and business development” and expects them to educate Brands and Agencies on the eSports opportunity? — best of luck. The other crazier point is that Blizzard already has a corporate division to do this in Activision-Blizzard Media. Maybe this position reports into ABMN and it’s only coincidental that it was posted on Blizzard’s site vs. Activision’s job site — where all the eSports and MLG positions are.

[Recommendation: I’m a huge fan of Overwatch and and no one predicted it’s explosive growth. As I outlined in THE NEXT LEVEL 007, it was astonishing to see it launch with several Brand partners including Taco Bell and Razer. I’d focus on Overwatch and Hearthstone as my primary platforms for Advertiser ROI.]

Again, the money generated in the near term from both of those revenue streams will have minimal bottom line impact but it’s the start of many more things to come.

Grab the popcorn — Activision-Blizzard and EA in Battle for the Broadcast and the Brands.