Activision Blizzard has reportedly acquired a large majority of the assets of Major League Gaming (MLG), which was once the biggest esports company in North America.
The board of directors of MLG gave its approval on Dec. 21, 2015, to an asset purchase agreement with Activision Blizzard for the sum of $46 million.
The report on the acquisition, which was done by esports news website eSports Observer, was supported by a letter acquired by the website. The letter was sent out to the shareholders of MLG to inform them of the asset sale to the video game company.
In connection with the sale, Sundance DiGiovanni will be stepping down from his role as CEO in MLG, with former CFO Greg Chisholm taking his place.
The acquisition, which is not fully confirmed yet as neither Activision Blizzard nor MLG has released an official announcement, is still being treated as rumor. With the deal occurring two weeks ago, it is strange that there is no news regarding the acquisition, with eSports Observer being the sole source of information for the report.
That said, MLG's sale to Activision Blizzard makes sense. MLG is stepping down after once being the leader in the esports scene across North America, with many successful tournaments held over the years for Call of Duty, StarCraft 2 and other games. However, the company has been declining, with one of the more recent blows being Activision Blizzard's naming of rival gaming network ESL as the tournament organizer for the Call of Duty World League, which will have players competing for a prize pool that is worth $3 million.
MLG was having a hard time in functioning as an independent esports company with several companies assuming control over operations, including Activision Blizzard, Valve and Riot. With Activision Blizzard's purchase of MLG, it shows that video game publishers are seeking to have more control over the esports operations of their titles.
There are certain scheduled events with the MLG for non-Activision Blizzard titles, such as an upcoming major tournament for Counter-Strike: Global Offensive. It could be possible that Activision Blizzard would push through with scheduled events, and then afterwards shift focus exclusively to its own titles such as Call of Duty and the upcoming shooter Overwatch once the game is released in the spring.
With the acquisition of MLG, Activision Blizzard could be looking to bolster the new esports division that it announced in October 2015. The company hired a pair of big names for the initiative: Mike Sepso, the co-founder of MLG, and Steve Bornstein, the former CEO of ESPN and NFL Network.
"I believe esports will rival the biggest traditional sports leagues in terms of future opportunities, and between advertising, ticket sales, licensing, sponsorships and merchandising, there are tremendous growth areas for this nascent industry," said Bornstein regarding the potential of esports.
If confirmed, Activision Blizzard's acquisition of MLG is another step toward the massive expansion of esports. There have been occasional broadcasts of esports tournaments on live television, and streaming websites such as Twitch have helped in significantly increasing the popularity of competitive gaming. The esports industry could be seeing major growth over the coming years, and the sale of MLG to Activision Blizzard could one day be considered a watershed moment in the history of esports.
Being the only source of the report, eSports Observer is maintaining the authenticity of the acquisition, claiming that the website has received several confirmations for the letter that was sent out to shareholders regarding the deal.