Activision Blizzard has bought the assets of Major League Gaming (MLG) for $46 million, leaving the esports organization a shell and certain stockholders dumbfounded, if reports are true.
During a Dec. 21 meeting, MLG's board of directors approved the decision to sell off the company's assets to Activision Blizzard, according to a report from eSports Observer.
Of that $46 million, $31 million was paid to MLG or on the company's behalf and the rest was placed in escrow. While it wasn't clear how much of that $31 million was paid on the company's behalf, there has been speculation suggesting that most of it went toward paying off MLG's debts.
Sundance DiGiovanni, MLG co-founder and CEO, has been replaced by former CFO Greg Chisholm, according to the report.
While neither Activision Blizzard nor MLG has confirmed the report, SuperData Research CEO Joost van Dreunen reached out to the owners of eSports Observer, and they asserted that they have the documentation and live sources to back up what they published. Still, van Dreunen asks that his remarks be received with caution.
This all started back on Oct. 22 when MLG co-founder Mike Sepso jumped ship and went to Activision's eSports division, according to van Dreunen. A few days later, rival ESL (Electronic Sports League) announced, in a huge blow to MLG, that it would now manage Call of Duty's Pro League.
Around that time, GameSpot reported that MLG was in talks with potential suitor Yahoo. The site later learned from a source that the reports were allegedly "not true," but not completely unfounded. The source confirmed that the two sides had discussed something, but wouldn't detail what that something was.
If true, this acquisition "suggests that despite a long-term effort to make competitive gaming popular, the firm had been struggling, ultimately resulting in the loss of a major franchise and departure of one of its key execs," says van Dreunen.
Activision Blizzard's acquisition of MLG is consistent with a trend SuperData Research has observed in industry heavyweights like Ubisoft, Take-Two Interactive and Electronics Arts, he says. There are ad dollars to be had and so major game publishers have been looking to diversify their reach across media channels as their online audiences grow.
"Following several other acquisitions and announcements from Activision, it is clear that the firm is evolving into a media conglomerate rather than a company that simply develops and publishes video games," van Dreunen says.
