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Leagues and Governing Bodies

Teams abandon Overwatch

The professional scene around Activision Blizzard’s hit video game Overwatch is shrinking, a troubling sign for the company’s ambitious plans to launch a well-capitalized league around the game.

Since May 1, five multi-game esports franchises have disbanded their Overwatch teams, citing a lack of moneymaking opportunities while hype drives up player salaries and details about the still-developing league remain sparse. This comes three weeks after one of North America’s most prominent Overwatch players, Brandon “Seagull” Larned, stepped down from NRG Esports’ active roster to focus on a more lucrative business of streaming his practice to fans.

“It was our third-most-expensive team to operate, yet it was one of our lowest drivers of revenue, and I’m sure that’s true for many of the teams,” said Marty Strenczewilk, CEO and president of Splyce, the Rochester, N.Y.-based franchise that disbanded its Overwatch squad May 9.

CompLexity Gaming and Denial Esports did the same, and European team Red Reserve also bailed, citing the lack of fan interest in Europe. Team SoloMid had been building a team to enter the space but abandoned its efforts May 5.

The situation illustrates the risk Blizzard is taking by putting so much stock in the centrally run, big-money Overwatch League so early in the life of the game. Other publishers that have successfully built spectator-oriented esports titles, such as Riot Games and Valve Software, encouraged fan bases, competitive player pools and teams to develop organically over a period of years by allowing a variety of tournaments and leagues to flourish.

Blizzard took a starkly different path with Overwatch. It announced plans for the Overwatch League in November, just six months after the game launched. Since then, it’s limited the number of one-off Overwatch events that might help build an audience while also trying to sell spots in the eventual centralized league for $20 million, according to multiple sources (see related story). The only established Overwatch leagues are in China and Korea.

Esports experts said the loss of interest in fielding competitive teams, if even temporary, is only making it harder for the Overwatch League to succeed once it does launch.

“The community determines if an esport will be successful, not publishers,”said Tobias Sherman, global head of esports for WME-IMG. “And you can throw all the money at it you want, but if there’s not a critical mass of esports fans invested in this game organically then it’s tough to see a return. You need fans to sell out stadiums.”

In a statement, Blizzard said it’s taking the interests of the existing Overwatch teams into consideration as it carefully builds the league, and will release more information when it makes sense to do so.

“Anyone who knows Blizzard understands how deeply we care about the communities around our games,” the statement reads. “The league is built upon the best elements of endemic esports programs and traditional sports, and we’re in active discussions with many teams and owners from both worlds because it will take a village to stand up a league with such an unprecedented structure. Those conversations have been going well and there’s a lot of excitement around our ambitious plans.”

For the endemic teams, the problem isn’t merely that they cannot afford the franchise spots. They’ve known for months they would have to find a partner with deeper pockets, or be acquired by one, to play in the OWL.

But the burn rate has grown untenable as they wait for more detail, with skepticism growing that the OWL will launch any time soon. Blizzard has not released any details about the form, structure or schedule of competition. Most franchises employ at least six players, a coach and manager, and often house them together as well.

“Six-player squads are expensive to maintain, and there are very few places to actually play and compete right now,” said Jason Lake, founder of CompLexity Gaming. “I hope to eventually return to the game when OWL kicks off, assuming we can find a financially intelligent way to be a part of the league.”


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