On the heels of the major Activision Blizzard win against the FTC, notable esports staff has been laid off, and the Overwatch league faces potential changes by vote.
While the Activision Blizzard merger continues full steam ahead after the FTC appeal was declined, the Overwatch League appears to be in dire straits following the Activision Blizzard Second Quarter earnings report. The earnings report outlines that Blizzard is “looking forward to the August 10 release of Overwatch 2: Invasion. This will be the largest seasonal update yet, planned to include new PVE Story Missions, a new game mode, and a new hero progression system as well as an additional hero” to increase engagement in the title.
However, more details in the earnings report show that Activision Blizzard is leaving the decision of the future of the esports league in the League Owners’ hands. The earnings report details Activision’s previous ‘amends’ made to the collaboration agreements between the company and the League Owners and their insistence on the League’s future coming down to a vote between the owners. Further, The Verge reports the league is laying off workers from its esports division in preparation for the potential new changes.
The statement reads, “According to the amended terms, following the conclusion of the current Overwatch League season, the teams will vote on an updated operating agreement. If the 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 (a total fee of approximately $114 million). As of June 30, 2023, a termination liability has not been accrued.” It’s worth mentioning the gut punch Activision inserted at the end of the statement, “Total revenues from the Overwatch League comprise less than 1% of our consolidated net revenues,” meaning the bottom line matters.
While the future does now remain uncertain for the Overwatch League, it’s notable that famous esports teams are hemorrhaging money at a rapid pace even outside of Overwatch. Big esports teams such as Counter Logic Gaming (CLG), TSM, and even FaZe Clan have reported massive losses to their bottom line when it comes to their individual esports organizations, so much so that TSM and CLG have both shuttered since the beginning of this year.
It remains to be seen what happens next regarding the Overwatch League, but fans should know that owners can entertain the $6 million payout and just walk away if they choose. More info will be given when it becomes available.
