• by Alex Weprin , January 10, 2018

In one of the largest deals in e-sports history, the Amazon-owned video game streaming platform Twitch partnered with video game publisher Activision-Blizzard for streaming rights to the Overwatch League.

Beyond the fact that the deal runs for two years, and excludes China, terms were not disclosed, though Sports Business Daily reported it was worth $90 million.

Overwatch League features teams of players playing the popular game “Overwatch,” with teams that advance to the playoffs securing significant payouts.

The only other eSports deal comparable in size is one signed in late 2016 between streamer BAMTech and Riot Games, the publisher of the popular League of Legends franchise.

In a research note, Raymond James analysts Justin Patterson, Aaron Kessler and Bianca  Rodriguez say that the Overwatch deal is “symbolic of the changing face of content in the over-the-top (OTT) video era.” 

“Specifically, they provide targeted content for a specific audience and drive engagement through interactive features,” they added. “We believe this is a viable strategy for OTT providers in a Peak TV environment characterized by Netflix’s and YouTube’s large leads, and intense competition for scripted content.”

The deal was driven in part by scale, with both Twitch and Overwatch League bringing their own user base to the table. According to James, Twitch has 15 million daily active users, watching videos on the platform for an average of 106 minutes per day. Overwatch, meanwhile, has more than 35 million registered members.

In general, eSports remains a nascent business. While video games are extremely popular and millions watch gaming online, it has thus far not drawn the attention from networks and advertisers that traditional live sports has.

Still, If Twitch and others in the streaming eSports space are willing to spend millions to secure these rights, it seems they think they can recoup those costs through lucrative advertising deals.

As many young consumers, particularly young males, watch less traditional television, platforms like Twitch believe they are positioned to pick up some of that slack.

Or, as one producer for a video game publisher told Digital News Daily at a conference last month: “If you want men under the age of 30 to see your ad, at some point you will have to advertise on a video game streaming platform.”