ANALYSIS: Initial thoughts on Overwatch League details
July 12th, 2017 | /initial-thoughts-on-overwatch-league-details/
Activision Blizzard (ATVI) just released more information league franchise.
Initially seven teams have bought in: (1) Robert Kraft, chairman and CEO of the Kraft Group and New England Patriots (a highly successful American football team for the non-Americans out there) (Boston), (2) Jeff Wilpon, co-founder and partner of Sterling VC and COO of the NY Mets (NYC), (3) Noah Whinston, CEO of Immortals, one of the more credible figures coming from the esports side (LA), (4) Ben Spoont, CEO and co-founder of Misfits Gaming (Miami-Orlando), (5) Andy Miller, chairman and founder of NRG Esports (SF), (6) NetEase, a big publisher in Asia with aspirations of becoming a global force (Shanghai), and (7) Kevin Chou, co-founder of Kabam which he recently sold to Netmarble, a Korean mobile games company that went public earlier this year in the second-largest IPO in South Korea (Seoul). With a few exceptions, what’s a couple of million between billionaires?
Esports has been receiving a growing amount of love from especially hard-to-reach viewers around the world. Initially publishers leveraged competitive gaming as a complementary asset, extending the player life-cycle especially for free-to-play titles. Over time the critical mass of the audience and the ascension of video games to a mainstream form of entertainment has opened the possibility of a dual product model in interactive entertainment. Game publishers are now actively pursuing advertising revenue in addition to their traditional product and games-as-a-service models. Today, esports reaches around 258M viewers worldwide, and is the most popular category in the gaming video segment both in terms of number of viewers and time spent watching.
The OWL announcement comes roughly a month after Riot’s recent announcement of converting its North-American Championship Series, the NA LCS, to a franchise model. The overall investment thesis around OWL seems to go as follows: yes, $20M to secure a spot is a lot of cheese, but it is backed by Activision’s own interest to have Overwatch do well and Blizzard has been running live events and tournaments for decades. In addition, BAMTech obtained the exclusive global streaming rights to League of Legends for $300M for the period 2017 to 2023, providing both an important proof-point and sense of scale.
The OWL means that teams now have a guaranteed spot, allowing them to invest in player development and building out their respective followings and brands. It also opens up a range of previously unavailable revenue streams for teams and their investors.