Overwatch League and Call of Duty League Future on Shaky Ground?
An SEC filing this week from Activision Blizzard should give OWL and CDL fans some pause about their futures.
This week The Esports Advocate published a story about Overwatch League franchise Chengdu Hunters disbanding. In that story I wrote that it had been confirmed by sources that the team had disbanded, with many players moving on to other teams in China. This story received significant pushback for all the wrong reasons thanks to a fellow journalist (who we won’t name), who claimed that our headline was “clickbait” and that the story didn’t detail any new information—except that it did.
We pursued this story because we have seen multiple articles over the last several months asking the question, “Is Chengdu Hunters Disbanding?” We wanted to answer this question, so we talked to several sources in China who actually know about OWL in the region, work within the space, and have first-hand knowledge of the situation. I do not believe any other Western esports or gaming news publication has talked to sources within China about Chengdu Hunters and the state of the organization. TEA did and this is what they told us, so our information is actually new and relevant.
While the fall of Chengdu Hunters can be directly laid at the feet of Activision's failure to come to terms with its distribution partner NetEase in China, fans of both Overwatch League and Call of Duty League should have some other concerns about the future.
On Thursday as part of an SEC FORM 10-Q filing, Activision Blizzard had some interesting comments about Overwatch League and Call of Duty League:
"Our collaborative arrangements for our professional esports leagues (i.e., the Overwatch League and the Call of Duty League) continue to face headwinds which are negatively impacting the operations and, potentially, the longevity of the leagues under the current business model. We continue to work to address these challenges, which could result in significant costs, and such efforts may prove unsuccessful."
Interestingly, the company added an entry specifically about esports in its lengthy cautionary statement as well: "...our ability to effectively manage the scope and complexity of our business, including risks related to our professional esports business model.."
Earlier in the week Esports Illustrated published an interview with Overwatch League Lead Sean Miller, where he said all the noise about the state of the league was overblown:
“I think that any claims that the industry or OWL is ‘dying’ feel very misplaced. I keep coming back to evolution because that's what it feels like for not only OWL but for the entire space. There's been so many articles over recent weeks and months and reports of people evolving in organizations, figuring it out and trying to find the best model to make this work. I think that in any nascent industry, like esports, there's going to be challenges and we're going to have some new and fresh ideas. For me, personally, I'm pretty excited to see it come to fruition because at the core of all this, so many passionate fans want to see this succeed. They love competitive Overwatch, they love the community that's been built around it. That's not going away.”
But what Miller didn’t say is what the state of the league will be after the 2023 season is over. There’s a lot of whispers that franchise owners are looking for a way out of OWL at this point but those executives probably know as much as the public does about the future of OWL as a franchised league... Given that Activision Blizzard is saying in public disclosures that there are big challenges associated with esports, we can expect some major adjustments, and even more so if Microsoft (who doesn’t have the best track record with its esports leagues) manages to buy the company.
But going back full circle to Chengdu Hunters and the state of Activision Blizzard esports in China, things are not going to get better for OWL teams in China because Activision Blizzard games in the region do not have government approval (games have to have approval in order to be played legally), and people we have spoken to say that the company won’t be able to get that approval back with a new partner for one to three years because the wheels of bureaucracy in China turn very, very slowly….
One Other Thing: Movement in Payouts for Activision Blizzard, Riot Games Workplace Lawsuit Settlements
Axios reported new information this week about the progress both Activision Blizzard and Riot Games are making related to sexual discrimination and harassment lawsuit settlements. The information about Riot comes from an April court filing by Rust Consulting, the firm that managed the settlement process.
In the report, Axios noted that new disclosures from both settlements indicated that Riot is paying more than 1,500 current or former employees and “hundreds of Activision workers” are receiving payments as part of “previously announced settlements over workplace issues.”
Riot agreed to pay roughly $100M USD to workers that are part of the settlement, with payments ranging from $2.5K - $5K, with additional payments of up to $40K based on current "employment status and tenure."
The Activision settlement from the 2021 lawsuit by the Equal Employment Opportunity Commission is also seeing payouts in the “five to six figures” range to “hundreds” of people who opted in, an EEOC representative told Axios.