Why a former Activision Blizzard exec is diving into one of esports' biggest leagues 

Key Points
  • Mike Sepso, a co-founder of Major League Gaming and former Activision Blizzard senior vice president, has joined competitive gaming team the New York Excelsior.
  • The NYXL is one of 12 founding members of the Overwatch League.
Fans cheer at an event hosted by the New York Excelsior, an esports team

A top competitive gaming team has welcomed Mike Sepso, an esports veteran and former Activision Blizzard senior vice president, to its roster, underscoring the sector's surging growth.

The New York Excelsior (NYXL) revealed Thursday that Sepso, co-founder of Major League Gaming who recently left Activision Blizzard, had joined NYXL. The Big Apple based esports team is backed by Sterling.VC, a venture capital fund, and an arm of Sterling Equities, which also owns the New York Mets. The NYXL is one of the original 12 teams in the Overwatch League (OWL).

Sepso helped craft and launch the league, based on Activision's megahit shooter game "Overwatch," during his three years with the company while overseeing commercial partnerships for its esports division. OWL's global city-based franchise structure is still the first of its kind and, according to Sepson, among the "biggest achievements" in esports to date. It comes at a time when game publishers and independent companies are diligently experimenting with their own competitive leagues.

"Many people spend time trying to work out how to build the perfect structure for esports," he told CNBC. "We got it mostly right, and what that led to was an opportunity for the league and individual teams to be successful."

But Sepso ultimately believes it is the commercial success of OWL and its individual teams that has been a "massive boon" for esports. Intel and HP both threw their weight behind the league before its inaugural season, with T-Mobile, Toyota and Sour Patch Kids later rounding out the big corporate sponsorship deals.

Activision then signed a multiyear broadcast deal with Disney and ESPN that began with live coverage and streaming of July's inaugural "Grand Finals."

Sepso is no stranger to the commercial side of esports given his history pioneering many of the first major deals in the industry. With current Activision executive Sundance DiGiovanni, he co-founded and oversaw Major League Gaming. The professional esports organization convinced the likes of Dr. Pepper, Old Spice and more to become some of the first big brands to dive into esports in the years after its 2002 launch.

During MLG's near two-decade history of tournaments, its "Halo 2 Pro Circuit" also became the first televised console-based gaming league in the U.S. in 2006. Seven years later, the company launched its own streaming service,

Activision acquired MLG in January 2016 to the tune of $46 million, just months after Sepso joined the gaming giant in his executive role.

"It was an amazing time [to be at Activision] in the three years I was there," he said. "It was incredible in terms of the dramatic change happening in esports, and getting to be one of the architects" behind the building of a new esports business, he said.

The crowd at Overwatch League Grand Finals at Barclays Center on July 27, 2018 in New York City.
Bryan Bedder | Getty Images

A league's next steps

Believing that New York offers a "great opportunity" that is essential for esports' growth, Sepso's new position with NYXL has him looking to expand the industry's presence in the city.

"New York is where most of the ad dollars come from worldwide," he said. "To take esports to the next level so that it can really rival traditional sports, [you need to] get the media and the ad world more comfortable with it. And to do that, you need to be investing in a deep and constant presence."

Scott Wilpon, Sterling.VC partner and SportsNet New York vice president, echoes the sentiment, emphasizing that he doesn't believe esports is too far off from a future like that of traditional sports leagues. But he also stresses that despite seeing the "same kind of passion for a baseball game," for example, more inroads need to be made for that passion to translate into a long-standing esports scene.

"The audience that's supporting [esports] is there, it's just that up until now there hadn't been enough outlets for people to create the fandom and experience the content," he said, implying that Sepso's position is part of making the larger investment needed to "organize that opportunity."

The focus on developing the esports scene through NYXL directly could also signal changes that Sepso believes are the next step in the OWL's evolution, namely that there will be more of an impetus on cultivating the individual franchise teams.

"A lot more attention will shift towards the teams as they start to really create an identity and fan base," said Sepso. "With new franchises and an even larger global footprint, you'll get an even bigger audience."

The former Activision executive is referring to the eight new teams entering the OWL realm, with all eight paying a hefty $30 million expansion fee to join. With 20 teams now set to compete in season two, Sepso predicts the franchises will individually start coming into their own, and make 2019 a key growth year for the OWL.

"The league and the teams have already learned a ton from the first year, and they're putting a lot of those [lessons into action]," he said. "Content, fandom, production and distribution at the league level, all of those things combined will be interesting to watch going forward.

Correction: Mike Sepso is a strategic partner with the New York Excelsior.