The eSports scene has flourished all over the world, with high profile tournaments popping up everywhere. However, not all gaming’s esports scene is successful. Over the past year, the Overwatch League has been in a completely incapacitated state. Overwatch’s esports scene, which has been booming for the past few years, now faces a dire situation. And Activision’s recent financial report may have put an end to the Overwatch League.
The Overwatch League once ruled the global esports industry. The Overwatch League was the first major esports league to franchise regional teams in major locations. It also included live spectator events with local crowds and paying competitors, which was a first for the esports industry. However, for the past few years, the League has been in a state of steady decline. The league format has been criticized for being too slow and boring. Additionally, the cost of entry has been prohibitive for many teams.
The game itself has become less popular. Overwatch was once one of the most popular games in the world, but other games, such as Valorant and League of Legends, have since overtaken it. And the recent financial report released by Activision-Blizzard-King (ABK) might as well put a nail in the league’s coffin.
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Activision financial report marks potential end of Overwatch League
ABK released its financial report on July 19, and it paints a really bleak picture for the Overwatch League. Additionally, the report indicates that “Total Overwatch League revenue represents less than 1% of our consolidated net revenue.“It was a shock for some and an inevitable truth for others. The last five years for the League have been really bad and unstable.
In May, reports from Activision said the league “continues to face headwinds that are negatively impacting operations and, potentially, the longevity of leagues under the current business model.” Moreover, the recent financial report is proof of this. The new report says,
“As previously reported, our collaboration agreements for our professional esports leagues continue to face headwinds. During the second quarter, we changed some terms of our collaboration agreements with team entities participating in the Overwatch League. Under the amended terms, after the conclusion of the current Overwatch League season, teams will vote on an updated operating agreement. If teams do not vote to continue under an updated operating agreement, a termination fee of $6 million will be payable to each participating team entity (total fees approximately $114 million ). As of June 30, 2023, no termination liability has been recognized. Total Overwatch League revenue represents less than 1% of our consolidated net revenue.
Activision-Blizzard-King Financial Report July 19, 2023
This means that if the current franchise teams do not agree to accept new terms, they can elect termination compensation and receive a sum of $6 million. Toronto Defiant, a popular team in the Overwatch League, has already decided on termination fees and is on its way. As a result, Overwatch League teams with Chinese bases are in a potentially terminal position. Since Blizzard Games still doesn’t have a contract in China following its split from publisher NetEase, this may be a quick and easy method to shut down the Overwatch project.
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It is not yet certain that the league will end. However, considering the payout and the state of the league’s decline, fans are sure the league is about to end. While some are shocked by this, others want the league to end and start again. So a change in the Overwatch League is coming, but it’s still unclear whether it’s good or not!
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