The Future of the Overwatch League: Uncertain or Unstoppable?

Depending on the outcome of a crucial vote by league teams at the end of the current season, Activision Blizzard might discontinue the current format of the Overwatch League. With the declining popularity of Overwatch 2 and the Overwatch League in 2023, Blizzard intends to make significant revisions to the team operating agreement in the esports league. If the teams do not vote in favor of the new Overwatch League operating agreement, it could mean the end of the current state of Overwatch 2 esports.

On Tuesday, news was revealed that approximately 50 employees in Activision Blizzard's esports department would be laid off, signaling further decline in the success of the Overwatch League. After a prolonged pause due to the COVID-19 pandemic, Blizzard relaunched its esports program with Overwatch 2 in 2023. However, the future beyond the current 2023 Overwatch League season remains uncertain.

As part of its second quarter 2023 financial reporting, Activision Blizzard issues a warning regarding the potential demise of the current iteration of the Overwatch League. The company aims to revise the terms of the operating agreement that binds all Overwatch League teams. A vote will be conducted at the conclusion of the ongoing Overwatch League season, giving teams the option to either accept or reject the proposed amended operating agreement. Activision Blizzard indicates that it will terminate the existing operating agreements if teams do not endorse the new terms.

Activision Blizzard is drawing attention to the decision, highlighting its potential financial impact on the company. In the event of terminating existing Overwatch League operating agreements, Activision Blizzard would be obligated to pay each team $6 million, totaling $114 million. While Activision Blizzard is certainly capable of affording it, they acknowledge the scale of these payments and the need to consider this possibility.

The specifics of Activision Blizzard's new operating agreement are unknown, making their objectives unclear. It appears that the Overwatch League's current level of success is not sufficient for Activision Blizzard to sustain it as it is. Consequently, the new operating agreement is likely to introduce significant financial changes benefiting Activision Blizzard. Teams likely recognize the need for changes but determining whether it is advantageous to accept these changes instead of seeking the $6 million termination penalty from Activision Blizzard remains uncertain.

The Overwatch League teams have the option to reject the new operating agreement, and Activision Blizzard may choose to uphold the current agreement. However, there is a realistic possibility that the Overwatch League could come to an end after the 2023 season. It is uncertain whether a new esports structure for Overwatch 2 will replace it, given the current state of Overwatch 2. Currently, Overwatch 2 is available in early access on PC, PS4, PS5, Xbox One, and Xbox Series X/S.

Source: IGN