Blizzard Has Big Plans and Big Costs for Overwatch eSports

By: Jason Segalla | May 10th, 2017

In the Activision Blizzard Q1 earnings call, President and CEO Bobby Kotick made clear his company’s ambitious goals for their upcoming Overwatch League, referencing NFL and NBA level viewership and revenue in comparison. Speaking of the league scheduled to debut in Q3 2017, Kotick stated that “the competitions [Activision Blizzard is] creating around the world will create sponsors and advertisers resulting in broadcast revenues, licensing, sponsorship and ticket sales, and most importantly, amazing spectator experiences”.

Kotick further highlighted advertising as an especially high potential revenue generator, arguing that the Overwatch League would be able to provide advertisers with specific targeting and analytic data at levels of specificity not attainable through traditional forms of broadcast advertising. Activision Blizzard intends to achieve these levels of revenue by structuring their highly anticipated league under a more traditional sports model, with teams based out of various cities worldwide and owners required to cultivate their talent to achieve success. Blizzard has backed their claims of potentially high revenue with a recent Morgan Stanley report that concludes that the Overwatch League could generate over $100 million annually.

Blizzard Entertainment seeks to execute their league through a newly formed division within Major League Gaming, which they acquired in 2015. The new division, which will retain the MLG name, will operate separately from Blizzard’s current esports division and will fully operate all Overwtach esports events, including the Overwatch League and the Overwatch Cup.

These announcements have coincided with reports from eSports journalist Richard Lewis and ESPN that claim spots in the Overwatch League begin as high as $15-$20 million. Recent activity from large gaming organizations Team SoloMid and Splyce corroborates these figures, as the organizations have each recently dropped their Overwatch teams with players citing high league entry costs as a major factor in their organizations’ decisions.

With organizations losing interest in Overwatch and some high profile players taking a break from competition during the western tournament stagnation prior to the league’s launch some are highly skeptical of Activision Blizzard’s revenue claims for the league. But with New England Patriots owner Robert Kraft and Miami Dolphins owner Stephen Ross reportedly purchasing multi-million dollar slots it does appear that there is at least some high profile interest in the upcoming eSports endeavor.

 


Do you think that the upcoming Overwatch League will be successful? Are you concerned about the future of current organizations within competitive Overwatch? Discuss now on our forums.