The gaming industry is abuzz with the recent developments surrounding Microsoft’s acquisition of Activision Blizzard, and a subsequent whirlwind of events that could lead to a financial setback for the tech giant, due to complications with the Overwatch League.
The Overwatch League Dilemma
Microsoft’s purchase of Activision Blizzard is more than a mere change of ownership; it’s the assumption of all associated successes and failures. As the transaction nears completion, a troubling prospect looms: the potential dissolution of the Overwatch League.
In a bold move last October, Activision Blizzard presented a futuristic blueprint for Overwatch 2’s esports endeavors to the 20 franchise teams of the Overwatch League. Additionally, a crucial vote was solicited—to decide the league’s fate.
The Cost of Closure
The financial repercussions of terminating the Overwatch League are significant. The anticipated majority vote to disband would oblige Activision Blizzard to distribute $6 million to each team as a settlement. This amasses a staggering $120 million liability that Microsoft would inherit.
Investment and Loss
Franchises have invested heavily, with entry fees surpassing $7.5 million each. Coupled with operational expenses since 2017, the figures are monumental. The League’s struggle to sustain its initial momentum amidst the esports industry’s shifts and the COVID-19 pandemic’s onset in 2020 have exacerbated the situation. Cancelations and restructuring of fan-attended events across the US have diminished the League’s allure.
The Problems of the Purchasing
Microsoft faces a pivotal juncture with the Overwatch League, where financial loss seems inevitable. Yet, this could also be an unprecedented opportunity for reinvention in esports under Microsoft’s banner, should they navigate this transitional phase with strategic acumen.