Blizzard has announced the first seven teams to invest in its upcoming Overwatch League. The league is a global affair that pits city-based teams against one another, so when a team owner purchases a position in the league, they also acquire the rights to a city of their choice.
Two US cities have been acquired by people involved with traditional sports teams. Boston has been claimed by Robert Kraft, chairman and CEO of The Kraft Group and the New England Patriots, while New York has been claimed by Jeff Wilpon, cofounder and partner at Sterling.VC and COO of the New York Mets.
Overwatch League commissioner Nate Nanzer said, "Obviously we're also very excited about the traditional sports owners because they bring a lot of incredible history to the table: building generational fandom around their teams and great local expertise, which is important for our city-based, home and away structure."
Three other cities have been claimed by established esports organisations: NRG Esports chairman and founder Andy Miller has nabbed San Francisco, Immortals CEO Noah Whinston claimed Los Angeles, and Misfits CEO and cofounder Ben Spoont has locked down Miami and Orlando.
Across the Pacific, Chinese internet technology company NetEase has purchased the rights to Shanghai in China, and mobile gaming giant Kabam cofounder Kevin Chou has likewise bought in for South Korean capital city Seoul. Chou's KSV eSports International company will be based in both Silicon Valley and Seoul (KSV stands for Korea plus Silicon Valley), and it is now hiring all-Korean management and recruiting an all-Korean team to compete in the league.
"As esports enthusiasts, we’ve always seen Seoul as the place to be for world-class competitive gaming," said Chou. "We’re very honored to represent the birthplace of esports as owners of the Overwatch League team in Seoul and excited to work closely with the most passionate and enthusiastic gaming community in the world."
Chou told Venturebeat that he got excited about esports while visiting China and South Korea while CEO of Kabam, adding that Overwatch is now more popular than League of Legends in South Korea’s Internet cafes.
"From my point of view, it’s the one game that’s been designed to be an esports game from the ground up on day one," said Chou. "This isn’t just us playing against other Korean teams, it’s Seoul versus New York, Seoul versus L.A., Seoul versus London, Seoul versus Shanghai."
He cited market research from Newzoo – which estimates esports revenues will grow to US$1.5 billion by 2020 – and skyrocketing pro team valuations as signs esports will soon be massive.
"Revenues are growing toward US$10 million in revenue, without any money from ticket sales, concessions, merchandise sales, and other revenues," Chou said. "I think this is a several tens of millions of dollars revenue opportunity."
To allow teams time to prepare venues in their cities for proper home-and-away play in the future, the Overwatch League's first regular-season matches will be played at an esports arena in Los Angeles. Once the season kicks off later this year, games will be played every Thursday, Friday, and Saturday.
Each team will have a license to run up to five amateur events in their home territory per year. According to Blizzard, these events will complement its online Master-or-higher Open Division, as well as its mid-tier Contenders leagues, which run in North America and Europe.
All Overwatch League teams will all receive an equal share of net revenues from league-wide advertising, ticketing, and broadcast rights deals. They will also keep all local revenues up to an undisclosed amount each year, beyond which a portion of the local revenues will go back into a league-wide shared pool for teams.
Overwatch players will be able to support teams by purchasing special in-game items, half the revenue from which will flow into the shared revenue pool.
"These arrangements will help ensure that teams have the resources to establish and grow their local Overwatch communities for years to come," said Blizzard.
TIME AND MONEY
In May, ESPN sources claimed that Activision Blizzard was struggling to sign franchises to the league because the rumoured minimum buy-in of US$20m was too high, and other signing criteria were unfavourable. For reference, a spot in the League Championship Series for Riot Games' League of Legends sold for US$1.8 million in December. Those same sources also said Robert Kraft had closed in on a deal to purchase a spot.
"We're not commenting on the price of the spot," Overwatch League commissioner Nate Nanzer told Eurogamer last week. "But we can talk a little bit about the terms of the relationship. I think one of the key differences in our structure is the local opportunity. There really hasn't been a city-based, global league in this way. Not just in esports, but in traditional sports too, there hasn't ever really been a league where Los Angeles plays Shanghai in the regular season."
As such, the above team signing news will no doubt come as a relief to many in the competitive Overwatch scene, which stalled somewhat after a positive start.
That Overwatch is facing hurdles as an esport may seem puzzling given the game's insane popularity (30 million players and counting), but many say it was actually Blizzard's inaction after its announcement of the Overwatch League at BlizzCon last year that was the problem.
As Eurogamer reported last month, Blizzard promised a big-money league with location-based franchises and no relegation, which was great. However, the announcement saw many leagues and tournaments – including ESL, MLG, FACEIT, ELEAGUE, and DreamHack – reduce or drop support for Overwatch in anticipation of Blizzard partnerships that didn't materialise quickly enough. The result was a lack of competitions, and this saw some esports franchises drop their unprofitable Overwatch teams altogether, including Splyce, Team Dignitas, Fnatic, compLexity, Red Reserve, Team SoloMid, Denial Esports, and Ninjas in Pyjamas.
"We're not out of the game for good, but I can't pay for a game that's my third most expensive and my tenth most viewed," said Splyce co-founder and CEO Marty Strenczewilk. "That is because there's nothing to watch, not because there aren't people wanting to watch it. There's just no matches."
Overwatch League commissioner Nate Nanzer acknowledged that the wait between the league's announce and any public action was too large. "We wanted to make sure that when we spoke with our community next in a meaningful way, we had really important stuff to talk about," said Nanzer. "Blizzcon is obviously the best place ever for us to announce anything, but do I wish Blizzcon had been in March or April, instead of November? Sure."
Nonetheless, today's announcement will have many eager to see what happens next. The Overwatch League won't be the first city-based global esports league (Counter-Strike had the Championship Gaming Series back in 2007, for example), but it is the most ambitious so far, and Blizzard has the money and clout to make it work.
"Overwatch is a game about a diverse group of international heroes who fight for an optimistic vision of the future, and the Overwatch League is an extension of that spirit," said Blizzard Entertainment CEO and cofounder Mike Morhaime. "We’re building this league for fans – esports fans, traditional sports fans, gaming fans – and we’re thrilled to have individuals and organizations who are as passionate about professional competition as we are, and who have extensive experience in all three fields, representing our first major international cities in the league."
There's also the small matter of the Overwatch World Cup, the Sydney leg of which runs from July 21–23. Team Australia is the main draw card there, alongside number one side Sweden. Team New Zealand will be playing in the United States in August.