Overwatch League Stays Virtual Even as Other Sports Welcome Fans

When the Overwatch League began its 2020 season over a year ago, the Philadelphia Fusion nearly sold out the Met, a 3,500-seat theater in their hometown.

The franchise of video-game players had plans for other high-profile events, too, including a match in Atlantic City, New Jersey, a summer destination for some Philadelphians. But the coronavirus upended all of that. Players in the 20-team league were sent home to compete from their apartments or team offices -- and will stay isolated from fans as the 2021 season opens.

While many U.S. sports are resuming play before live audiences, the fourth season of the esports league launches April 16 with eight of the 20 teams hunkered down in Asia, including the New York Excelsior, the Los Angeles Valiant and the Fusion. Other franchises will continue to stream their matches without live audiences -- making the upstart league look like a shadow of the major new sport envisioned by its founders, Overwatch creator Activision Blizzard Inc. and Chief Executive Officer Bobby Kotick.

“In the first two years, that was the narrative -- esports will be bigger than the NFL!” said John Patrick Lee, a product manager with Van Eck Associates Corp., an investment company that runs an esports and video-game fund. “But in the last few years, they’ve kind of shifted their focus to much more of a lifestyle brand, streaming kind of organization.”

Overwatch League Stays Virtual Even as Other Sports Welcome Fans

The Overwatch League, the first video-game league with local franchises, was the brainchild of Kotick and Activision. They invented the game it’s based on -- a cartoon-style shooter -- and made it one of the industry’s most-successful titles. Overwatch matches involve teams of six players trying seize or defend ground in a futuristic version of Earth.

The idea was to replicate the approach of the NFL or NBA, which have passionate local fans and team owners willing to spend big money for clout. The Overwatch League created and sold franchises for $20 million or more to billionaires like New England Patriots owner Robert Kraft.

Timing, Safety

But now the comparisons with big-league sports are harder to make, especially when the teams are absent from their home cities.

Jon Spector, a vice president for the league, said the decision to have a second year of virtual play was deliberate. Online viewing of matches doubled in Asia when the league began playing there in local time. And while professional baseball and soccer players have to ultimately meet in person on a field, gamers can afford to be more cautious during the pandemic.

“That allows us to take a different lens in terms of health and safety risks,” he said in an interview.

Given the time difference, Activision is replaying the Asian games on YouTube at an hour more conducive to U.S. viewing. It’s giving fans the option to hide the scores, at least initially, from its Overwatch League website to avoid spoilers, and it’s not promoting victories on social media until after the rebroadcast.

Still, a second year of virtual play leaves some to wonder whether the league’s model makes sense. Activision closed the Blizzard Arena in Burbank, California, part of a plan for all of the teams playing there to disperse to local venues last year, and recently laid off live-event staff. Overwatch merchandise is selling for a discount on the league’s website.

Activision doesn’t break out Overwatch League revenue. It’s in a category of revenue labeled “other” that includes the Call of Duty League and a European distribution business. Revenue from those sources grew 6% to $687 million last year.

Local Freedom

Spector said Activision recently ended a partnership with apparel-retailer Fanatics, which will allow teams more freedom to make and sell their own merchandise. Executives are making other changes they believe fans will like, including allowing them to earn credits for use in the game by watching matches on YouTube.

The company has also improved the game to minimize latency for teams competing over long distances. The league is even sending some teams to Hawaii, where they can compete with their Asian counterparts via a high-speed undersea cable.

Overwatch League Stays Virtual Even as Other Sports Welcome Fans

Players for the Fusion, which is owned by Comcast Corp., won’t have it so bad. They will compete at a multistory esports center opened last year in Seoul. It has a gym and a cafeteria.

Back home, Comcast halted construction on a $50 million esports arena that it still plans to build in it home town of Philadelphia. The company is launching a podcast, with a local host interviewing players and coaches who’ll be based overseas. Officials hope to host watch parties in the Philadelphia area if virus precautions permit.

“We’ve built a season that allows us to run online and also to preserve some flexibility,” said Spector, the league executive. “We would love to bring events back in some form.”

©2021 Bloomberg L.P.

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