While the esports world has seen a number of shocking troubles over the last year, the impending death of Overwatch League is one of the smallest surprises.
Blizzard’s initial concept for a city-based, franchised esports league for its popular-at-the-time hero shooter was incredibly ambitious. Though there are some clear benefits to the traditional sports formula, the dollar values associated with the league punched clean through “ambitious” and arrived in “ludicrous” territory. Along the way were a number of catastrophic misfires by Activision Blizzard that eroded trust in the company and ended interest in esports among non-endemic stakeholders.
Now, Overwatch League is seeing massive layoffs and reports of franchises effectively being offered the opportunity to be bought out of the game. All signs point to Overwatch League dying, but how did we get here? And does this mean the end for Overwatch esports?
Why is Overwatch League dying?
Overwatch League is dying due to the enormous price tags and overhead costs that were attached to franchises during the league’s first two seasons.
Overwatch has almost all competition funneled through either Overwatch League or Overwatch Contenders. Playing in Overwatch League demanded an eight-figure franchise fee. Franchise fees were reportedly anywhere from $10 million to $35 million, but they weren’t the only price tags associated with the league. Alongside paying off those fees, teams also had to handle the salaries of players and coaches, maintain training facilities, and pay other expenses.
While this would’ve been a hefty bill on its own, it was actually designed to grow further over time. Teams were initially planned to have dedicated home arenas by 2020 to host regular-season competitions, similar to traditional sports. These plans were scrapped due to travel restrictions, but they still represented another significant overhead cost for team owners.
The pitch made by Activision Blizzard to convince owners to pay up was an expectation of explosive growth that would quickly cover the costs. That growth never really happened in terms of fan interest or revenue.
Overwatch League’s first broadcast rights deal in 2018 was a large one, with Twitch paying over $100 million for exclusive streaming rights to the first two seasons despite internal protests from esports figures employed by the company. In 2020, streaming rights for Overwatch League, Call of Duty League, and Hearthstone were bundled together and sold to YouTube for $160 million across three years. While that was still a large sum by esports standards, it represented a significant shortfall relative to the previous deal.
Compounding matters was an almost never-ending stream of scandals, lawsuits, and fan backlash directed at Activision Blizzard. The company faced legal troubles on a number of fronts including several lawsuits alleging sexual discrimination by former employees, alongside another suit from the United States Justice Department related to OWL’s player salary structure. These troubles likely contributed to a mass exodus of sponsors in 2021, with major non-endemic brands including Pringles and State Farm Insurance walking away from Overwatch League.
Signs of an imminent end to Overwatch League manifested in early 2023. Reports circulated that team owners were seeking collective legal action against Activision Blizzard and team owners began openly acknowledging an inability to cover costs. In April, the league confirmed that the Chengdu Hunters franchise would not play for a portion of the season, which was followed by the organization leaving OWL entirely in June.
Today, Overwatch League is reportedly laying off most or all of its staff while opening the door for franchises to walk away. This either marks the end of Overwatch League completely or suggests that it will change directions in a way that makes it fundamentally different from what fans have seen to this point.
As disappointing as it is for Overwatch fans, there are some to whom it comes as little surprise. Activision-Blizzard was questioned early and often for its decision-making around the OWL. From culling outside competitions before the league was even ready to begin play, to extravagant projections that may never have been in line with reality, the writing may always have been on the wall.
Is Overwatch esports dead with the end of Overwatch League?
Overwatch esports isn’t necessarily completely dead with the end of the Overwatch League. There is a glimmer of hope for the game, at least for the time being.
There’s undoubtedly going to be a great deal of pain inflicted upon the game’s established pro scene, regardless of what comes next. Players are likely to see considerable pay cuts, talent will likely be forced into diversifying their income streams, and many will be forced to walk away from esports entirely. Fans can also expect the production value of any future events to be significantly lower than what they’ve enjoyed to this point.
The one hope is that Overwatch can develop in the same direction as Counter-Strike. The tactical shooter has one of the most robust competitive scenes in the industry despite having very limited support from its publisher, Valve. Multiple prominent leagues are established in Counter-Strike and Overwatch is a more marketable game for non-endemic advertisers given its fantastical nature.
There are still some significant issues associated with this. Activision Blizzard might not be willing to wash its hand of the game when there’s potentially still money to be made. The threat of the company eventually deciding to reimplement exclusivity might scare away tournament organizers and esports organizations. There are also ethical concerns due to nefarious regimes controlling a number of major figures within the industry.
Still, the potential is there for Overwatch esports to continue in some form. It’s just a matter of whether Activision Blizzard will truly step back and who will step up to take their place.
