As per today’s financial earnings report from Activision-Blizzard-King (ABK), the Overwatch League is facing serious challenges and is at risk of potential termination.
The esports scene, known for its constant changes, has experienced considerable pressure over the past year, causing significant stress on the once highly praised league. Presently, the Overwatch League is awaiting a crucial end-of-season vote by the teams to determine the possibility of a new operating agreement. The ABK Report said revenue from the OWL represented less than 1%.
“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.”
Activision-Blizzard-King financial statement from July 19, 2023
During an interview with Ash Parrish from The Verge, he stated: “I want to be clear on one thing in particular, that Overwatch remains committed to a competitive ecosystem in 2024 and beyond.”
Furthermore, the esports department is experiencing workforce reductions, and substantial changes are being prepared for the Overwatch League. As reported by an unidentified employee who was laid off, The Verge revealed that the layoff was unforeseen and occurred without any advance notice.
“There was no warning, this was a complete shock to everyone, and none of us who were laid off were offered any opportunity to switch roles or teams.” The Verge was informed by the anonymous laid-off employee.
The ex-employee revealed that Blizzard was discontinuing certain tools utilized for their tournaments and that, just before being laid off, they were involved in developing a new tool to replace the ones being phased out.