Activision Blizzard is changing the esports landscape with its upcoming Overwatch League, which borrows from best practices that traditional sports have capitalized on for many decades. The Overwatch League’s global city-based team structure sets up a way to connect local fans with teams as they compete in home arenas in Season 2, while Season 1 will take place in LA.
The first batch of teams are based in Boston (owned by Robert Kraft, Chairman and CEO of the New England Patriots), New York (owned by Jeff Wilpon, COO of the New York Mets), Los Angeles (owned by Noah Whinston, CEO of Immortals), San Francisco (owned by Andy Miller, Chairman and founder of NRG Esports and co-owner of the Sacramento Kings), Shanghai (owned by NetEase) and Seoul (owned by Kabam). Additional cities will be added before the action kicks off this fall.
Nate Nanzer, commissioner of the Overwatch League, told AListDaily that this infrastructure allows teams to build roots and generational fandom, while having a home arena unlocks additional revenue from concession, ticket and merchandise sales and local sponsorships.
“In addition to receiving a share of global revenues from media rights, contracts, sponsorship, both physical and virtual merchandise and in-game items, teams also have a structure built to encourage local entrepreneurship to build local businesses,” Nanzer explained. “The structure keeps the lion’s share of local sponsorships and tickets at the team level.”
Nanzer points out that while local-level sponsorship dollars are big revenue drivers in traditional sports, they haven’t existed in esports until this league.
“The Overwatch League opens up a lot of opportunities for local and regional brands that haven’t had a clear path into esports,” Nanzer added.
Heading into the second season of the league, when each team has established a home base (which will range from traditional stadiums to theaters and other venues in each city), there will be opportunities for local and regional branding to connect with the local fans as well as those who tune into livestreams. Nanzer believes that over time, teams will rely on purpose-built venues for esports.
Another opportunity to connect local businesses with local fans comes in the form of amateur esports events.
“Team owners have the rights to put on five amateur events each year and monetize them while engaging with the local community and building an audience around Overwatch,” Nanzer said. “We’re building out the entire sport of Overwatch from amateur, to semi-pro, to pro.”
Collegiate events will also remain a piece of this ecosystem. Blizzard’s on-going Tespa Collegiate Series for Overwatch has seen many schools, including UC Irvine, offering scholarship programs to participating student-athletes. Nanzer said collegiate Overwatch programs in Korea and China are also being built out.
Overwatch has over 30 million players and the game continues to attract new fans. That’s good news for brands on the worldwide stage, as well.
“Our sponsorships provide a compelling opportunity for global brands to partner with a truly global league and get in the door at the early stages,” Nanzer said, noting that additional teams in Europe and other cities will be added to the Season 1 roster. “It’s unique for esports to have a home and away format with Shanghai vs. LA in the regular season. Traditional sports don’t offer that type of competition. Brands are used to just dealing with teams in the top media markets in the world.”
“While audiences are aging in traditional sports, we have digital natives who consume content differently from the generations before them,” Nanzer explained. “We’ve seen a lot of interest in this content from digital, social and linear broadcasters. Our distribution platform will account for a mix of platforms. This is content that is being produced for a digital native audience and I expect digital will make up a large portion of our broadcast strategy.”
TBS has featured Overwatch competition as part of its ELeague, ESPN has aired multiple Blizzard esports competitions over the past few years, and NBC Sports recently jumped into the competitive game with Rocket League.
While Overwatch League content will appear on Activision-owned MLG.TV, Nanzer said it will not be the exclusive platform where all of that content lives.
“We’re looking to distribute the Overwatch League content broadly,” Nanzer said. “It’s strategically important to have our own distribution channel for content. The Twitch deal Blizzard signed covers a lot of our content, but that does not include the Overwatch League shows that we’re looking to connect with gamers across multiple platforms.”
The good news for brands is that Activision Blizzard isn’t the only company going this route, thanks to Riot Games’ move to franchise the structured approach.
“Since we announced the Overwatch League back in November, other games are taking a similar approach,” Nanzer said. “That stems from the fact that teams really need stability to grow. It’s hard to attract and keep sponsors on board when there are no guaranteed spots to stay in the league, and you have to make decisions in the moment to stay in the league. We think creating that consistency is vital to have these teams grow and thrive. It’s a step in right direction for esports.”