Activision Blizzard may end the Overwatch League as it currently exists, depending on an important vote among league teams at the end of the current season. As the popularity of Overwatch 2 and the Overwatch League continues to wane in 2023, Blizzard is seeking to make substantial changes to the esports league's existing team operating agreement. Should teams not vote to support the new Overwatch League operating agreement, it could mean the end of Overwatch 2 esports as it currently exists.
News broke on Tuesday that Activision Blizzard would be laying off around 50 employees from the company's esports department. It's the latest sign of the Overwatch League's dwindling success. Following an extended period of the Overwatch League being on pause due to the COVID-19 pandemic, Blizzard relaunched its esports program with Overwatch 2 in 2023. Yet while the 2023 Overwatch League season is continuing as scheduled, what comes after is unclear.
As part of its second quarter 2023 financial reporting, Activision Blizzard warns of what could be the looming end for the Overwatch League as it currently exists. Activision Blizzard is seeking to amend the operating agreement terms by which all Overwatch League teams are bound. A vote will be held at the end of the current Overwatch League season. Teams can decide to either accept or refuse the amended operating agreement. Activision Blizzard implies that it will terminate the current operating agreements if teams do not approve the new terms.
Activision Blizzard is calling attention to the decision due to the potential financial impact it will have on the company. If Activision Blizzard decides to terminate existing Overwatch League operating agreements, it will owe each team $6 million for a total of $114 million. While Activision Blizzard could certainly afford it, it still needed to acknowledge the possibility given the size of the payments.
Without knowing the specific details of Activision Blizzard's new operating agreement, it's unclear what the company's goals are. What seems to be happening is that the Overwatch League simply isn't successful enough for Activision Blizzard to continue supporting it as it exists. As such, the new operating agreement almost certainly makes dramatic changes to the Overwatch League's finances to Activision Blizzard's benefit. Teams likely understand that changes need to be made, but whether it's worth it to agree to those changes rather than seek Activision Blizzard's $6 million termination penalty is unclear.
Overwatch League teams could theoretically reject the new operating agreement and Activision Blizzard could decide to continue with the existing agreement. It's a realistic possibility that the Overwatch League ends after the 2023 season, though. A new esports structure for Overwatch 2 could take its place, but that's a difficult thing to speculate on considering the current state of Overwatch 2.
Overwatch 2 is available now in early access on PC, PS4, PS5, Xbox One, and Xbox Series X/S.
Source: IGN
