Life After OWL: What the League’s Demise Could Mean for Overwatch Esports
With the release of its second-quarter earnings report, Activision Blizzard revealed that the future of Overwatch esports is uncertain. As the Overwatch League continues its sixth season of play, the company is preparing an updated operating agreement to be presented to team owners following the 2023 playoffs. The teams will vote to resume operations under the new terms or dissolve the league and receive a $6 million termination fee for each franchise.
Alongside the likely end of the Overwatch League system, The Verge also reported extensive layoffs within the Activision Blizzard esports department. Approximately 50 employees were abruptly let go in a move that will leave the league operating with a skeleton crew for the rest of the year. This could be the ignominious end for a venture that once promised to revolutionize esports entirely. So, how did we arrive at this moment, and where do we go from here?
What Went Wrong for the Overwatch League?
On the autopsy report for the Overwatch League, there won’t be just one cause of death listed. When something this big collapses, the failure points are many and varied. Outsized expectations, mismanagement from the executive level, poor financial decision-making, trends in the gaming space, pandemic woes: all of these led us here, but no one reason fully explains the league’s demise.
From its inception, the Overwatch League had ambitions that far outstripped what was realistic. In 2016, esports was on a meteoric rise that turned out to be something of a bubble. League of Legends was pulling tens of millions of viewers for its World Championship, and money was pouring in. With the wildly successful release of Overwatch, Blizzard was ready to get in on the action in a big way.
Enter the OWL, an attempt to bring the franchised structure of traditional sports leagues to esports on a global scale. Money poured in from investors making their first forays into esports. $20+ million buy-ins upped the stakes from the jump. There would be no room for modest, incremental growth, and OWL could be the only game in town. Tier 2 competition suffered while third-party tournaments ended almost entirely. All the eggs were in one very expensive basket.
OWL’s format, particularly its geolocated model, created issues from the jump that have persisted to the very end. In theory, city-based teams created opportunities for fans to create local communities and connect with their teams in a way that’s rare in most esports. The big problem was the spread of team locations. 13 of the league’s 20 teams were based in North America, with just five Asian teams and two in Europe.
The pandemic squashed any dreams the league had of fulfilling its vision of teams traveling the world to play in front of its global audience, but it’s hard to see that working out even in the best of worlds. Overwatch’s popularity and league viewership were already on the decline in 2020, so a state of constant travel was never going to be sustainable.
By reducing costs, going online may have actually kept the league from collapsing sooner. Still, it shone a light on the problems of geolocation. European teams moved to the US, and Asia continued with a smaller group of teams that made competition stale. Even after the pandemic subsided, the Overwatch League was a shell of its former self: no more fancy studios or crowds of screaming fans. Instead, viewers got lifeless face cams of players in dark bedrooms.
Even in a world without the pandemic, the biggest problem the Overwatch League faced was the game itself and the years of mismanagement by Blizzard. Overwatch as originally released was something of a relic. It wasn’t meant to be the type of live-service game that would come to dominate the market. Therefore, there had to be an Overwatch 2 to bring the game into the modern era.
Now, the game is what it always should have been on a structural level. Steady content drops and a free-to-play model were necessary, but the time spent waiting on Overwatch 2’s development did irreparable damage to the game and OWL as a result. Even in a world with no pandemic, there wasn’t a path to success without a thriving game.
Ultimately, the Overwatch League was likely doomed from the start. The ambitions were simply too big for an esport without a proven track record. Nothing but the biggest esport in the world could justify the amount of money coming in. With the entire esports bubble popping, it was always going to fall apart eventually. Now, we have to pick up the pieces, so what does Overwatch esports look like going forward?
Where Do We Go From Here?
First things first, this is going to hurt. Many people have already lost their jobs. Many more will suffer the same fate, not just at Blizzard, but across Overwatch esports. Players, casters, and staff that have enjoyed the security of the franchised league are going to be thrown back into the wild west of esports. Many will find their way to other games that offer more stability. No one should fault them for that.
For those that remain, the path forward is unclear. In comments to The Verge, OWL commissioner Sean Miller stated that Activision Blizzard remains committed to Overwatch esports, but offered little in the way of practical information.
Fans can possibly look to the league’s recent efforts to integrate its Tier 2 scene, Contenders, into OWL competition. Even if the league disbands, there will likely be some OWL teams that wish to continue operating Overwatch rosters. Don’t be surprised if they compete in a more open system next year that also incorporates the top performers from Contenders regions around the world.
The transition could also see Overwatch return to a regional model rather than the global system OWL aspired to create. It will take time to reestablish a strong presence in Europe and other regions that have been neglected in recent years, but the result could be healthier in the long term.
The wildcard in all of this is the looming acquisition of Activision Blizzard by Microsoft. Ultimately, any system is going to need investment to actually function. Given the state of esports at the moment, that has to come from the top down. They’ll have to put up prize money and other incentives to get teams and tournament organizers back on board after the failures of the last five years. It won’t be easy, but there’s a community of fans, casters, staff, and players that want Overwatch esports to persevere. Times will be lean. There will be pain, but we go again.