Activision Blizzard’s Overwatch and Call of Duty Pro Leagues seem to be in trouble.new filing (opens in new tab) A joint investigation with the U.S. Securities and Exchange Commission found that the company faces challenges that could undermine the long-term viability of both leagues, and it’s unclear whether they can address them.
The Overwatch League was a bold initiative when it was announced in 2016. A league of city-based teams that compete across seasons in home and away games leading to playoffs and championships. So it was basically the same as a traditional sports league, with a relatively high buy-in costing him a deal that made it difficult to sign a franchise. (opens in new tab).
The league faced even greater challenges at its inception and before finding a proper footing when its third season was derailed by the Covid-19 pandemic. (opens in new tab)which ultimately laid off about 50 employees as the league no longer focused on live esports events. (opens in new tab)Things took a turn for the worse in late 2021, when major sponsors began pulling out after widespread discrimination and sexual harassment at Activision Blizzard came to light. Five years after the first season of the Overwatch League began, we still haven’t fully recovered from that turmoil. No sponsors are back, and full-time city-based gameplay remains a distant dream.
(The Call of Duty League debuted in 2019, a few years after the Overwatch League, but was played on PlayStation 4 consoles until 2021. (opens in new tab).)
Activision Blizzard admitted in its Form 10-Q filing filed with the SEC on May 4 that it’s been riddled with headaches.
“The cooperation of our professional esports leagues (i.e., the Overwatch League and the Call of Duty League) could have a negative impact on operations and the viability of the leagues under their current business model. We continue to face some headwinds,” he says. “We continue to work to address these challenges, but the consequences can be very costly and such efforts may be doomed.”
It’s far from throwing in the towel at all, in fact, said Overwatch League head Sean Miller Dexert (opens in new tab) Activision Blizzard remains “committed to growing the Overwatch esports and community,” and says it’s “not going away anytime soon.” Also note that, generally speaking, such securities reports are obliged to cover all grounds, even relatively unlikely probabilities.
But the Overwatch League faces very real challenges. The release of Overwatch 2 helped restore interest in the league after years of flagging viewership, but how long it will last remains to be seen. Awaiting payment of his $420 million. (opens in new tab) With deferred fees from Overwatch and Call of Duty League teams, Blizzard does not yet have a publishing partner in China. (opens in new tab)In other words, you cannot access Overwatch 2. With four of the Overwatch League’s twenty teams (Chengdu Hunters, Guangzhou Charge, Hangzhou Spark, and Shanghai Dragons) based in China, this is a serious problem. Disbanded (opens in new tab)The enthusiasm and confidence of 2017 feels like a distant memory when the Overwatch League seemed like the natural next step in esports mainstreaming.
Activision Blizzard declined to comment on the filing.
