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Activision Blizzard is set to dole out a staggering $120 million in fees to its teams.
The era of Overwatch League is coming to an end. Activision Blizzard made an announcement this week, revealing its decision to shift away from the esports league and into new territories with its competitive Overwatch 2 scene.
“We are transitioning from the Overwatch League and evolving competitive Overwatch in a new direction,” shared an Activision Blizzard spokesperson with Polygon. “We are grateful to everyone who made OWL possible and remain focused on building our vision of a revitalized esports program. We are excited to share details with you all in the near future.”
The future of Overwatch 2 esports was hanging in the balance when the Houston Outlaws and Florida Mayhem, two Overwatch League teams, faced off in Toronto at the finals in October. Uncertainty loomed due to Activision Blizzard’s layoffs in its esports department. The future of the league hinged on team ownership votes. If teams voted against its continuity, Activision Blizzard was obligated to pay $6 million in termination fees.
Now with the votes cast, Activision Blizzard is on the hook for a total of $120 million for its 20 contracted teams. Buying into the Overwatch League meant parting with a hefty $20 million for founding teams, according to a 2017 ESPN report. Subsequently, eight expansion slots were sold, the prices ranging up to $35 million, as disclosed by The Jacob Wolf Report. This hefty sum contributed to the $400 million in franchise payments that Activision Blizzard was owed from the Overwatch League and its analogous Call of Duty esports league. The outstanding fees have been reportedly waived, according to Sports Business Journal.
Reportedly, Activision Blizzard is eyeing ESL FACEIT as its partner for the next Overwatch 2 esports program, as per Jacob Wolf’s report in November. Additionally, ESL FACEIT was sold to Savvy Gaming Group, backed by the Saudi Arabian government, in 2022 for $1.5 billion.
When the Overwatch League was unveiled in 2016, it was hailed as an avenue to legitimize esports, resembling the structure of traditional sports leagues such as the National Football League or National Hockey League. It envisioned city-based teams in a permanent spot, traveling around the world to compete. While it enticed traditional sports team owners into buying Overwatch League spots, such as New England Patriots owner Robert Kraft and Los Angeles Rams owner Stan Kroenke, the ambitious vision never materialized.
Initially, the Overwatch League largely operated from the Blizzard Arena in Los Angeles, supplemented by occasional “homestead” weekends where teams explored the home-and-away game setup. Some teams even planned multi-million dollar arenas, such as the $50 million Fusion Arena of the Philadelphia Fusion. However, the COVID-19 pandemic led to a strict transition to online play, curbing the home-and-away format.
The trouble escalated for the Overwatch League when major sponsors withdrew support for Activision Blizzard following the ongoing California Civil Rights department’s sexual harassment and gender discrimination lawsuit. Although in-person events resumed in 2022, interest in the league and Overwatch 2 continued to dwindle in 2023.
Despite the shift, Activision Blizzard maintains its stance that competitive Overwatch 2 is far from over, embracing a novel format. However, the grand, expensive venture of the Overwatch League has been unequivocally called off.
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