NEW YORK (TheStreet) -- Activision Blizzard (ATVI) - Get Report stock is rising by 2.81% to $34.73 in late afternoon trading on Thursday, as the company creates a new division devoted to the quickly-growing competitive gaming business, also known as e-sports. 

E-sports participants compete in video gaming tournaments, many of which are broadcast online or on television.

The tournaments currently attract more than 200 million global viewers, and e-sports could become a $1 billion business by 2020, Bloomberg adds. It is now a $300 million business. 

A number of Activision games are already played during e-sports competitions, but the company hopes to increase the content and events around its bigger franchises, according to the Wall Street Journal. 

During the past year, viewers spent about 1.5 billion hours watching Activision games online, the Journal adds.

Former ESPN CEO and top NFL network executive Steve Bornstein will be the chairman on the new division, and Mike Sepso, co-founder of the online e-sports network Major League Gaming, will be senior vice president, according to a statement.

"The important thing for us to accomplish is making sure that we have really watchable, professionally produced content and making sure our players can be appropriately rewarded for their skill and expertise," CEO Bobby Kotick told the Journal. 

Activision is the largest U.S.-based video game creator, with games such as "Call of Duty" and "Hearthstone: Heroes of Warcraft."

Separately, TheStreet Ratings team rates ACTIVISION BLIZZARD INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

We rate ACTIVISION BLIZZARD INC (ATVI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 80.55% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ATVI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for ACTIVISION BLIZZARD INC is currently very high, coming in at 81.80%. It has increased from the same quarter the previous year.
  • Net operating cash flow has increased to $135.00 million or 27.35% when compared to the same quarter last year. In addition, ACTIVISION BLIZZARD INC has also vastly surpassed the industry average cash flow growth rate of -30.19%.
  • You can view the full analysis from the report here: ATVI