Action Alerts Plus holding Activision Blizzard Inc. (ATVI) is on a roll this year. Shares have rallied more than 46% in the last 12 months, up more than 12% year to date alone.

That's due in large part to the genuine hype surrounding its Overwatch League, an e-sports venture launched officially in January. The Overwatch League is a gaming league for professional players created by Activision Blizzard pitting six-person teams against one another in the Activision single-shooter game "Overwatch."

While investors have shown enthusiasm for the league's potential, analysts at William Blair wrote in a March 20 note that some of the near-term hype could be overdone as Overwatch League hits the midseason mark.

Overwatch League (OWL) by itself could add between $312 million and $531 million of revenue for Activision by 2021, analysts said, plus an additional $137 million to $242 million of net income. That could mean between about 17 cents and 29 cents of incremental earnings per share.

Despite that boost, William Blair analysts said the earnings impact in 2018 and 2019 would likely be small. "While we believe the league will ultimately raise the bar for how the traditional video game publishers monetize e-sports and sustain engagement with fresh IP post-launch, its stand-alone impact to estimates in the near term (2018 and likely 2019) will likely be immaterial (<5% of non-GAAP EPS), despite ongoing media buzz and investor enthusiasm," analysts wrote.

William Blair's estimates for OWL revenue represent only a small portion of Activision's expected revenue in 2018. Analysts have predicted the company will report revenue of $7.44 billion for the full year.

But William Blair did note that longer-term, the tangible investor excitement is "largely warranted."

"We find the potential for Activision Blizzard to generate leverage on its investments in and commitments to growing the OWL (and potentially other e-sports leagues for its IP, including "Call of Duty") to be considerable," analysts said.

Plus, "at the very least, we believe the company's investment in the Overwatch League will likely prove to be a good use of marketing-like dollars in helping to sustain engagement and player investment with core Overwatch players," William Blair wrote.

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