Activision Buys MLG for $46 Million
The biggest name in North American eSports is now the property of the biggest game publisher in North America. Just prior to Christmas, MLG’s Board of Directors approved the sale of “substantially all” of its assets to Activision Blizzard for $46 million.
According to a report by eSports Observer, the deal was approved by MLG’s Board rather than shareholders thanks to a provision in Delaware corporate law that allows for a corporate action to be taken without a shareholders’ meeting. That being said, a number of MLG shareholders are unhappy with how the deal went down. Whether they have any grounds for legal recourse or intend to pursue recourse remains to be seen.
As a result of the acquisition, MLG CEO Sundance Giovanni has been replaced by former MLG CFO Greg Chisholm. Giovanni is one of MLG’s two co-founders. The other co-founder, Mike Sepso, is the Senior Vice President of Activision Blizzard’s eSports division.
The timing of the deal is interesting. Just two months ago, Activision announced a partnership with ESL, the world’s biggest independent eSports organization, to run the Call of Duty World League Pro Division. CoD has long been one of MLG’s mainstay games so losing out to ESL had to be a massive blow to the company.
Major League Gaming has been one of, if not, the most prominent organization in North American eSports. Having launched in 2002 with a Halo 2 championship, MLG expanded over the years to include Call of Duty, StarCraft, League of Legends and various fighting games. They launched the MLG.tv streaming network in 2013. In the last year, MLG opened an arena in Columbus, Ohio, and announced the construction of an arena in China due for opening in 2017.
Activision Blizzard is a prominent company in the eSports scene. The rise of eSports can be attributed in part to StarCraft: Brood War which was the top game in the world for a period of time before the current MOBA domination of the market. Activision Blizzard’s prominent eSports IPs include CoD, StarCraft, Hearthstone, Heroes of the Storm, World of Warcraft and presumably Overwatch when that is released.
The move makes sense for both companies to an extent. MLG is sort of alone on an island thanks to moving its competitions over to its MLG.tv platform so it isn’t getting the viewership one would expect them to get on Twitch. Activision Blizzard recently started the aforementioned eSports division and are looking to grow in that space. While they have made various deals with broadcasters and organizers in the past for individual games or seasons of competition, this might be the start of longer term planning.
Of course, as this is a sale of assets, there may not be any ongoing operations for MLG or its remnants after this. It’s entirely possible that Activision is looking to acquire industry knowledge, broadcasting hardware and a streaming network as part of the deal. Activision also owns the assets of the defunct IGN Pro League but I’m not sure if they’ve done anything with that either. Acquiring eSports organizations just to shut them down doesn’t make sense so there has to be a plan to actually use these assets.
What this means for MLG’s current plans is unknown. At the end of March, MLG will be holding the first Counter-Strike: Global Offensive major tournament in North America. CS:GO is a Valve game so it will be interesting to see if an Activision-owned MLG will continue to support non-Activision games going forward.