The Long Shadow of Overwatch League

Credit: Activision Blizzard

It was a weird week for Activision Blizzard, because even as the company posted record revenues in its Q2 2023 financials and managed to be in a better position for its proposed $69B USD acquisition by Microsoft, it laid off a large number of employees and revealed that it is making an offer that could end Overwatch League as we currently know it. Let’s dig in. – James Fudge

Layoffs Hit Activision Blizzard Esports 

The company also said that it is providing support for those affected by the layoffs, though details on severance and job placement assistance efforts were not disclosed. Those familiar with the situation say that these latest cuts are surprising, as league operations at the company were already pretty thin. READ MORE.

Did OWL Team Owners Know About the $6M Buyout Offer Before This Week?

“As previously disclosed, our collaborative arrangements for our professional esports leagues continue to face headwinds. During the second quarter, we amended certain terms of our collaborative arrangements with team entities participating in the Overwatch League. 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 (total fee of approximately $114 million). As of June 30, 2023, a termination liability has not been accrued. Total revenues from the Overwatch League comprise less than 1% of our consolidated net revenues.”

Overwatch League team leaders we spoke to this week appeared to be surprised by Activision Blizzard’s disclosure about the $6M buyout offer, claiming that they had no idea about this plan’s existence until now, but at least one executive we spoke to said that they knew about it in June.

All of the people we spoke to said that they will take a wait and see approach because they don’t have any information to make a determination one way or the other at this time.  One team owner told us that they believe teams in China will take the buyout and walk away from the league if given the chance, but this was purely personal speculation and not based on any inside knowledge they may or may not have.

Interestingly enough, we have heard whispers that several owners in North America said that they are strongly considering taking the $6M and walking away from the league—we could not independently confirm this claim, as of this writing.

Following the exit of Chengdu Hunters from the league earlier this year, there are currently 19 teams in OWL in North America, China, South Korea, and Europe. The real question is what happens to OWL if a majority of teams decide to exit the league? For example, what if a majority of teams decide to take the buyout and move on? What is the acceptable threshold of participating teams to continue on as a franchised league?

The disclosure creates more questions that it provides answers, but one thing it does indicate is that the OWL of 2023 will look dramatically different in 2024—and that doesn’t even factor in Microsoft’s inevitable acquisition of Activision Blizzard by the end of 2023… READ MORE.

Record Q2 2023 Revenue for Activision Blizzard

Blizzard’s franchises combined for 27M MAUs and generated revenues of $1.05B during the period, with revenues jumping 160% driven by the launch of Diablo IV, which was played by more than 10M users in June—player engagement in Overwatch 2 declined from last quarter. Overall, the segment’s operating income more than tripled on a year-over-year basis at $409M.

Mobile division King reported 240M MAUs and contributed revenues of $747M to Activision Blizzard’s total revenues. READ MORE.

Riot Awards GGTech a Three-Year Contract for Collegiate Esports in North America

Riot said in its announcement that there won’t be any noticeable changes to the collegiate esports space, and that it plans to give a lot of breathing room for grassroots efforts, allowing for these things already in the works to co-exist with whatever GGTech is doing in conjunction with the Riot Scholastic Association of America (RSAA). READ MORE.

Snowbright Studio Founder Grace Collins Wins 2023 Games for Change Vanguard Award

“But along with that [investment and growth in the space], what I didn’t expect… and should have… was the discrimination and hardships that came along with the field. Today we see colleges across America finding creative ways to avoid Title IX restrictions. To avoid having to make efforts to increase diversity on esports teams. We see schools overworking students and profiting off of them. And worse yet, we see women and trans students being harassed, excluded, and forgotten by communities and programs. We see games being uplifted that are dedicated solely to the dominant, stereotypical young male gamer. We see a lack of student input in the decisions that guide their lives. I didn’t anticipate that. I should have. But I got it wrong.”

Collins, who also won this year’s Vanguard Award (watch the acceptance video here), does offer some solutions on how allies and advocates can start making a difference now. Check out their LinkedIn post here.

In Other News

✅ Ben Goldhaber joins GGWP to lead marketing efforts.

⭐ Tencent reveals esports plans for Peacekeeper Elite in 2023.

💪🏿Tencent also reveals CrossFire esports plans for 2023.

💰 Shanghai offers incentives to create an “international esports city.”

🤝Galaxy Racer in pact with footballer Diogo Jota.

🕵️‍♂️ BLAST accepting bids for 2024 event destinations.

👩‍🏫 Minnesota Varsity League and Bluum partner for an Esports Development Clinic in August.

☑ Guild Esports partners with PIXELS AI.

Note: This article originally appeared in our weekly newsletter on July 23, 2023.