The OWL’s Washington Justice was among those enjoying robust attendance when in-person contests were suspended on March 11.Carlton Beener for Activision Blizzard Entertainment
Activision Blizzard’s home-team model for esports was off to a strong start before the coronavirus pandemic upended things. Now, it’s evaluating potential changes for 2021.
The Overwatch League and Call of Duty League were both set for big years as they started to hold local events in cities around the world, launching a bid to replicate traditional sports in an unprecedented way for competitive gaming.
The properties were able to get off multiple weeks’ worth of events before Activision Blizzard Esports suspended in-person matches for at least the rest of the regular season, while moving the games to an online-only forum.
While there were positive signs to build on, including several event sellouts, executives around the league say they plan to use the extra time before in-person events would be held again to evaluate possible changes to the model. That could include having some online-only weekends to reduce the number of in-person events each team hosts.
“We’d be foolish not to,” said Pete Vlastelica, president and CEO of Activision Blizzard Esports and commissioner of OWL, when asked if the league is evaluating model changes for next year. “In a way, situations like this are gifts that give us, or any team or league, the opportunity to test and learn out of necessity but then pick up practices [like online-only events] that can be applied moving forward.”
Vlastelica, a former Fox Sports executive, made clear that this “is not at all to say that we’re ready to just make online the plan moving forward,” and such a move would not be expected because in-person events have become a routine and important part of esports.
But some team executives around the league said they’re looking at possible changes, because even while there were good signs with ticket sales revenue, the costs of putting on the show at times outweighed the revenue, making many of the events unprofitable. Changes could also include the type and size of venues at which events are held and using different types of formats such as tournaments to try to improve profitability.
No firm decisions have been made yet.
Still, the league did see some good signs in terms of building local fan bases, and Vlastelica is among many league executives who are encouraged by this. In OWL, teams that had sellouts or at least strong crowds over the first five weeks included the New York Excelsior, Philadelphia Fusion, Washington Justice and Dallas Fuel.
“The model they built the business case on was definitely working pre-COVID and for us and the Fusion,” said Joe Marsh, a strategic adviser to the Fusion who works for Comcast Spectacor. “We’re definitely long on OWL and building a facility with the ability to make it a gaming hub of the East Coast and Philadelphia.”
Marsh noted that the league “saw a few events and what went well and what didn’t ... and the extra runway gives teams time to organize their fan base and make sure you have the right facilities in that market — that extra time is a good thing.”
While the move to online-only matches was a natural one for esports properties during the shutdown, it was not necessarily an easy one for leagues like OWL, which has teams in Europe, South Korea and China, as well as North America. Activision fast-tracked a plan already in the works to build a mobile remote cloud software program. While the viewing experience has been different with no in-person scenes and with broadcasters separated at their own houses, the online-only games have gone off without any major hitches.
The chaos from the coronavirus comes during the first of a new three-year, $160 million media-rights deal with YouTube, which now airs both OWL and CDL. The peak viewership on the main OWL channel is down 61% from this year on YouTube compared with last year on Twitch, according to data from Newzoo, from around 251,000 in 2019 to about 97,000 in 2020. Vlastelica said Activision Blizzard and YouTube are working to improve the user experience and marketing around the digital broadcasts. For example, one aim is to make it easier for users to find OWL and CDL games when they are surfing the YouTube page or using the app to see that such matches are live.
OWL has canceled in-person events for the regular season so far, but Vlastelica said it was too early to say whether there could be in-person postseason matches, including a possible Grand Finals.
Mike Rufail, the owner and CEO of Team Envy, said that despite the hype around 2020 being a big year to kick off homestands, he’s viewing the move to online-only matches as a mere bump in the road. Envy owns the Dallas Fuel of OWL and the Dallas Empire of CDL.
Teams paid around $20 million to buy franchises in the 20-team OWL and $25 million to buy one in the 12-team CDL.
“We’ve always had a long-term outlook on investment in esports and things like this don’t make it easy, but it hasn’t changed our perception of how we view our business and the upside that esports brings to the table,” Rufail said. “We truly believe we’re going to conquer [the virus] as human beings. On another day, we’re going to play in front of an audience in person — and until that day, we’ll be one of the few sports on planet Earth that can still compete.”
