(Bloomberg) -- YouTube secured the exclusive rights to broadcast some of the biggest esports leagues, giving Google a boost in its efforts to push into the lucrative world of video games.
The deal, signed between Alphabet Inc.’s Google and video game publisher Activision Blizzard Inc., gives YouTube the rights to broadcast the new Call of Duty League and the already-popular Overwatch League, which was broadcast on Amazon.com Inc.’s Twitch for the past two years at a reported cost of $90 million. As part of the agreement, Google will provide cloud infrastructure for Activision’s online games. Financial terms of the multiyear deal were not disclosed.
Gaming is a significant new frontier for Google. Last year, it released a game-streaming service called Stadia, which lets people play games through the internet without having to buy a console or high-powered computer. YouTube has always been a major destination for watching people play video games, but the company is trying to take even more territory by poaching well-known game players from Twitch.
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“In 2020 Google is going all out to claim a piece of the $120 billion games market,” said Joost van Dreunen, managing director of Nielsen’s video-game research arm. “Google is off to a great start to building strong relationships with content creators which it will need to differentiate as it tries to penetrate the industry via different avenues.”
The news isn’t good for Amazon, which hasn’t announced a competitor to Stadia and still faces uncertainty about its in-house gaming studio, van Dreunen said. “The longer Amazon remains on the sidelines of technological shifts in the games business, the harder it will be to capture share down the line,” he said.
The deal offers a strong boost to the central thesis of Activision’s esports efforts. The publisher pitched investors on the Overwatch League and the Call of Duty League, which launches later this month, as esports equivalents to traditional sports leagues like the National Basketball Association or National Football League. Selling media rights to companies like YouTube is a central piece of how these leagues make money.
Providing hosting services to Activision is also a win for Google’s cloud division, which is trailing Amazon and Microsoft Corp. in that market.
(Updates with comment from analyst in the fourth paragraph.)
--With assistance from Eben Novy-Williams.
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