The economic crisis in esports has affected both esports organizations and esports leagues. Currently, the Overwatch League is at a critical point, and the franchises’ teams will vote to determine the league’s future.
Overwatch League’s financial problems
Activision Blizzard has allowed franchise owners to choose whether to walk away with some money or continue down the same path. At the same time, the video game developer has initiated a wave of layoffs of staff in charge of sports operations. If we look in detail, the crisis that Activision Blizzard is experiencing could mean the end of the Overwatch League as we know it.
For its part, Activision Blizzard has commented on the current problems experienced by the Overwatch League in its financial reports. According to the financial report for the second quarter of 2023, the league’s total revenue does not even represent 1% of the developer’s revenue.
Therefore, Activision Blizzard executives have proposed a vote where teams will choose “an updated operating agreement.” The vote will take place at the end of the current season, and according to the league’s calendar, October 1 ends. In that vote, teams that choose not to continue will be compensated $6 million. This money will be a termination fee.
The future of the Overwatch League is in the hands of the franchise owners
The Overwatch League franchise owners hold the league’s future in their hands, which does not promise a good outlook. Recall that, earlier this year, most team owners joined to hire a law firm. This way, they had representation in collective bargaining.
The teams were looking for financial breathing room after spending millions of dollars in recent years on player contracts. Recall that the teams’ revenues had greatly diminished due to declining sponsorships and expiring TV rights contracts. Last month, the Overwatch League, seeking to give the teams a break, eliminated all outstanding payments from the franchises.
According to the information stated by the organization’s senior director of global communications, Brad Crawford, to The Verge, “the corporation has a clear commitment to the future of esports.” However, a former employee does not agree with Brad Crawford.
Then former Activision employees speculate that the developer aims to shut down its esports division, or so it has shown with the wave of layoffs, where 50 employees have been affected.
On the other hand, the ex-employees have commented that it may be that Activision will keep staff with the minimum personnel to finish the current season.