The Overwatch League is looking to expand and if you want in, it’ll cost you.
In an Activision Blizzard earnings call last week, the expansion was discussed with the expected price tag to be well above the $20 million buy-in the original 12 teams paid to enter the league.
In a report by ESPN’s Jacob Wolf, it was noted that sources expect the season two entry to be anywhere between $35 million and $60 million.
The selling point for the next round of teams is Blizzard’s reporting that the Overwatch League has exceeded its revenue expectations. Blizzard apparently has two-year deals with Twitch, HP Omen, and Intel that are worth a combined $117 million. Additionally, the Overwatch League is sponsored by T-Mobile, Toyota and Sour Patch Kids, and other companies that have purchased sponsorship spots on team jerseys and merchandise.
The Overwatch League model resonates with traditional sports team owners as it is something owners can look at and have an immediate understanding.
Traditional sports franchises from all over the world are jumping into esports at a fairly quick pace and the Overwatch League could be very appealing for numerous reasons. Although new, the league has already seen noted marketing success while generating close to half a billion dollars from buy-ins and sponsorship. The traditional sports model of franchising is also appealing to other business entities as teams get a home geographical location which lends another layer of sponsorship opportunities.
There are a couple of hurdles that Blizzard and other potential franchises will have to get over in order to make this work.
The price tag is steep.
The amount of money required to buy into the league will be unprecedented. Traditional sports franchises and other business entities could shy away from such a steep price tag, especially with the league being only two months old.
Investors may require more time and data to understand the audience.
It is uncertain if this amount of time is sufficient enough to lure investors in parting with their money. Viewership dropped significantly after the January 10 initial launch. When the Overwatch League launched their first day of matches after more than 13 months of hype the viewership was there. With over 10 million viewers across multiple platforms, Blizzard’s streams reached a peak viewership of 437,000 during the Dallas Fuel vs. Seoul Dynasty match.
However, week two saw a significant, but expected drop, as viewership has held steady at about 100,000 at any given time.
Regardless, Blizzard believes that the league is at a point where they can solicit investors and teams to be a part of something that has staying power.