Market Overview

IBM Makes Esports Debut With Multi-Year Overwatch Deal

IBM Makes Esports Debut With Multi-Year Overwatch Deal

International Business Machines Corporation (NYSE: IBM) announced a multi-year deal with the professional esports league Overwatch late Thursday. The deal will introduce IBM’s cloud computing and artificial intelligence capabilities, including its natural language processing and machine learning expertise, to the esports arena for the first time.

What Happened: Developed and published by Activision Blizzard Inc (NASDAQ: ATVI), the Overwatch League is an international esports platform with 20-city based teams across Asia, Europe, and North America. A typical league season consists of 280 matches, starting from February all the way to the post-season playoffs ending in Fall. The 2020 playoffs began on Sept. 3 and the Grand Finale is scheduled between Oct. 8 and Oct. 10.

The Overwatch sponsorship agreement will cover the 2020 Grand finals and the entire 2021 and 2022 seasons.  

Starting from 2021, IBM would deploy its technological expertise to improve Overwatch’s league ranking systems. Reports also suggest the use of Watson AI, developed by IBM research, for predictive analysis.

Why Does It Matter: IBM has contributed to esports — albeit, by manufacturing hardware, chips, and releasing developer's software. This would be the first time IBM extends full-frontal support for immersive gaming.

On Thursday, IBM announced plans to spin-off its Managed Infrastructure Services division into a newly-incorporated public company, in an attempt to speed up its hybrid cloud growth strategy. The demerger is expected to close by the end of 2021.

Price Action: IBM stock surged 5.98% on Thursday, to end the trading day at $131.49. ATVI stock fell by 0.85% to close at $77.80.


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