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Activision Banks on In-Game, Digital Purchases for Revenue Growth

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Part 3
Activision Banks on In-Game, Digital Purchases for Revenue Growth PART 3 OF 8

How Activision Blizzard Reaches Out to Its Audience

Recent updates

To increase user engagement, Activision Blizzard (ATVI) released several new updates for its leading gaming franchises during 2Q17. The company’s daily active users (or DAUs) rose to an all-time high in 2Q17. Games such as Uprising were well received by its audience, and the time spent on World of Warcraft rose YoY (year-over-year) as well. 

How Activision Blizzard Reaches Out to Its Audience

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Team sales of Overwatch League

Activision Blizzard announced the sale for its Overwatch League teams in July 2017. Several entrepreneurs in the eSports as well as in traditional segments have bought these teams. The team owners include:

  • Robert Kraft, CEO of Kraft Foods
  • Jeff Wilpon, co-owner of the New York Mets
  • Ben Spoont, founder of Team Misfits
  • Noah Wilson, CEO of Immortals
  • Kevin Chou, co-founder of Kabam
  • Andy Miller, co-founder of NRG eSports

As the world’s the first eSports league, Overwatch League is one of Activision’s successful gaming franchises, with over 30 million players. The league has generated more than $1 billion in revenues to date. 

Activision’s CEO, Robert Kotick stated, “Overwatch, with more than 30 million players has captured imaginations and driven strong global engagement. We organized our league around major cities, taking a proven model from competition in traditional sports.”

The rise of eSports

The company’s eSports league is expected to start by the end of 2017 and plans to have a city-based playing structure. Activision estimated that ~285 million people watched eSports last year, and this figure is expected to rise over the next few years. Newzoo has estimated direct advertising spending at $325 million in 2016, up from $220 million in 2015.

Activision has reportedly charged $20 million per team in franchise fees from Overwatch League owners, with revenue sharing after 2021. This results in incremental revenues of $140 million for Activision by the end of fiscal 2017.

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