2018 will likely prove to be a do-or-die year for eSports after startups combined to raise $200 million in 2017.
KeyBanc Capital Markets' Evan Wingren maintains an Overweight rating on Activision Blizzard, Inc. ATVI's stock with an unchanged $80 price target.
After the initial investment, 2018 will be a year that either defines the initial success of eSports — or its failure, Wingren said. Most notably, the Overwatch League and the League of Legends North American League Championship Series will be "measured as bellwethers" for additional investment dollars, he said.
Meanwhile, Activision's Blizzard unit is expected to announce on Monday or Tuesday which company or companies it will partner with to broadcast the OWL, as it is scheduled to start on Wednesday, the analyst said. At the very least, Twitch and MLG are expected to be initial broadcast partners, Wingren said.
As it stands, tens of millions of people log on to Blizzard's battle.net and "Overwatch" on a regular basis, which makes the channel an "extremely valuable (and free) marketing channel to drive awareness of OWL and its broadcasts," the analyst said.
"Early KPIs such as average concurrent viewership, attendance, digital and physical merchandise sales will be the key measures of success, in our view," Wingren said "Even if these areas start off at modest levels, but continue to improve over time as awareness builds, we think positive sentiment will remain intact."
The KeyBanc analyst said he'll be attending the Overwatch event and will be closely examining the attendance, energy/passion and quality of the broadcast.
Shares of Activision were trading higher by 0.1 5 percent early Monday morning.
"Overwatch" screenshot from Wikimedia.
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