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Why Overwatch Remains Key to Activision Blizzard’s Revenue Growth

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An important franchise

Gaming companies such as Activision Blizzard (ATVI) depend on popular franchises to drive their long-term revenue. ATVI has lost significant value in the last eight months due to weak player engagement across some of its most popular titles. This development has affected its sales and driven its stock price down, as investors have been unimpressed.

Overwatch is one of ATVI’s key gaming titles. The game provides revenue opportunities for the company across the consumer product and esports verticals in addition to traditional gaming. Overwatch launched three years ago and was one of ATVI’s top four games in 2016 and 2017. However, it declined in popularity in 2018.

It’s possible that Overwatch‘s gaming sales have peaked and that it will need a reboot in the form of a sequel to drive player interest once again. For now, ATVI will have to focus on in-game updates and spending to attract users.

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ATVI launched the 2019 season of the Overwatch League

ATVI was one of the first movers in the esports segment. In the first quarter, Activision Blizzard launched the 2019 season of the Overwatch League and now has 20 participating teams. Viewership this season is expected to be up 20% year-over-year.

ATVI CEO Robert Kotick stated, “Leading brands continue to recognize the opportunity to engage a hard-to-reach demographic deeply immersed in the highest eSports experiences and in the content that has the highest production value.” ATVI has now added Anheuser-Busch InBev, the Coca-Cola Company (KO), and State Farm as sponsors for the league.

The Overwatch League has a city-based model, and team owners are now building strong fan communities to generate support among their teams. The games will be played in a home and away format in 2020.

ATVI will be hoping that the Overwatch League can sustain the initial hype and grow in popularity to generate millions of dollars in revenue going forward.

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