Wednesday night's debut of Activision Blizzard's (ATVI) Overwatch League could turn out to be a landmark event for e-sports -- or not.

The e-sports league's first  match will stream on Amazon's (AMZN) Twitch Wednesday night, with the San Francisco Shock and Los Angeles Valiant facing off, among other contests. The league marks Activision Blizzard's aggressive push into the nascent e-sports market, with an international roster of teams based in cities from Boston to Shanghai. And while the initial revenue bump will be modest for a company of Activision's size, the long-term potential could be significant.

Shares of Activision Blizzard gained 0.5% to $66.54, following the announcement of the streaming deal with Twitch on Tuesday. The stock is up more than 73% over the last 12 months.

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While Activision Blizzard did not announce terms, Amazon will reportedly pay $90 million in a two-year deal to stream the league matches. Activision Blizzard will carry the contests on its Major League Gaming web site and app, and on the new Overwatch League app. 

A scene from the new e-sports league.
A scene from the new e-sports league.

Overwatch pits teams of six players against each other in an online shooter game. Gaming publisher IGN named Overwatch its game of the year in 2016 and wrote in a review that "the person with deadshot aim is no more valuable than the person with the decision-making ability to know when a well-timed ability will turn an engagement, or the person with the map-sense to find the optimal locations to place sentry turrets."

The new league features a dozen city-based teams with corporate sponsors in the U.S., Europe and Asia. The Boston Uprising is backed by Kraft Group, the business of New England Patriots owner Robert Kraft, while New York Mets executive Jeff Wilpon and Sterling VC own the New York Excelsior. A unit of Comcast (CMCSA) owns the Philadelphia Fusion; Tucker Roberts, son of Comcast CEO Brian Roberts, runs the team.

The season runs until June, with games on Wednesday through Saturday at the Blizzard Arena Los Angeles. The playoffs follow in July. 

While the league debut and the deal with Twitch are milestones in Activision Blizzard's strategy to monetize its game franchises, don't expect a major bump to Wall Street's projection of $7.4 billion in 2018 sales for the video game publisher. 

If reports are accurate, Amazon's streaming deal comes to $45 million per year, which Morgan Stanley analyst Brian Nowak noted in a Wednesday report is roughly in line with Disney's (DIS)  seven-year, $300-million agreement to stream Riot Games' League of Legends through its BAMTech division. Riot is owned by Chinese internet giant Tencent (TCEHY) .

The Overwatch League could generate $100 million in sales per year, Nowak suggested in his base case.  

The biggest contributors are rights and advertising, which Nowak suggests could generate $32 million in sales, though the Twitch deal reportedly exceeds that amount. Sponsorships could add $30 million, while digital merchandise sales could come to $23 million and ticket sales might add $13 million, in Morgan Stanley's analysis. 

Meanwhile, Macquarie Capital analyst Ben Schachter wrote in a Wednesday report that he is "cautiously optimistic" about the league's potential. "We firmly believe that e-sports, overall, will be meaningful," Schachter wrote. "Which games and companies will benefit the most over the long term remains less certain."

Activision Blizzard should be able to expand its roster of sponsors beyond HP (HPQ) and Intel (INTC) , Schachter suggested. In-game sales of digital merchandise such as "skins" present another opportunity. 

"We don't expect much financial impact for 2018, though the long-term impact has the potential to be much larger, particularly if Overwatch can use the momentum from the OWL to cement itself as a top 4 eSport and begin to regularly rival the audience reach of the current eSports leaders League of Legends, Counter-Strike, and Dota 2," Schachter wrote. Counter-Strike and Dota 2 are both published by Valve Corporation. 

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