True Test For Overwatch League Starts In 2020

Via The Washington Post, an interesting look at how ticket sales, travel and local partnerships will be crucial factors for potentially revolutionary esports league:

One thousand six hundred feet from where the final cheers faded for the 2019 Overwatch League season, one can find the first signs of what Activision Blizzard hopes will become a physical symbol for the league’s future success — a future that will be shaped in no small part by the outcome of the next 12 months.

In late September, the City of Brotherly Love’s Overwatch team, the Philadelphia Fusion, broke ground on a new esports arena, situated between the homes of the NHL’s Flyers and NFL’s Eagles. Comcast Spectacor, owner of the Fusion and Flyers, sank $50 million into the 3,500-seat arena and practice facility, a large bet for a league that is just completing its second season.

Starting in February 2020, Overwatch League teams will play between one and five weekend series in their designated home markets. Activision Blizzard hopes to mirror traditional sports by leveraging fan allegiance for a geographical region, not just a team. It is the next step in a potentially revolutionary vision for competitive video gaming, one in which ticket sales, team travel, broadcast rights and local partnerships will be scrutinized as much as the competitions themselves.

Activision Blizzard CEO Bobby Kotick wants the Overwatch League to look like the NFL, except on an international level. In one regard, that’s already bearing out. According to Kasra Jafroodi, esports strategy and analytics lead at Activision Blizzard, the average minute audience (estimated audience divided by total time broadcast) for Overwatch League matches was 218,000 internationally as opposed to 95,000 in the United States. Jafroodi worked with Nielsen to introduce that statistic (average minute audience) in an attempt to produce a more one-to-one comparison with traditional television, which also uses that metric.

The Grand Finals in Philadelphia drew a global average minute of audience of 1.12 million on digital and linear platforms, a 16 percent increase from last year’s finals. The U.S. average minute audience registered at 472,000, a 41 percent increase year-over-year. This number also includes views of the rebroadcast over a period of 24 hours.

The move to home markets will be an experiment for not just Overwatch, but esports as a whole. The move is an attempt to bring in local revenue, a largely untapped market for esports. But the question of how best to do so remains an open one for the league, even as it sets its schedule for 2020. There will be some teams with as many as five homestands next season, while many others feature two or three. The disparity highlights the varying ability of teams to execute these homestands from a logistical perspective while successfully reaping revenue.

Taking the show on the road presents a different challenge. To succeed in next season’s model, teams will have to adapt to the demands of increased travel. Professional Overwatch players are used to competing in all regular season games at the Overwatch Arena in Burbank, Calif. But in 2020, they will travel to play in cities in China, South Korea, Europe and North America. That will mean logistical challenges as teams try to cut expensive traveling costs and account for the mental and physical toll such travel takes on players.

“I’ve told guys, next year is going to be kind of a nightmare just because some of the players have never traveled before,” San Francisco Shock Manager Chris Chung said. “I know for my Korean players, this was their first time getting a passport in their lives. Even a 40-minute trip can be exhausting for them.”

Ahead of the league’s free agency period, which opens Monday, teams are believed to be weighing how well players and team members and can handle traveling together as much as their abilities in the game. 

Even with the added variable of travel, players are excited to have the ability to play at home. Shock player Matthew “Super” DeLisi, a Philadelphia native himself, said he got a taste of it when he walked onstage at the Grand Finals. It was an “emotional” experience for him.

“I’ve been to Wells Fargo Center dozens of times,” DeLisi said. “I’ve sat top floor, bottom floor. I’ve sat in basically any place you can, but, obviously, I’ve never been on the stage.”

The 2020 format is seen as a small step to the larger goal. Owners are in this for the long haul, Kotick said, and potential challenges securing a fan base and sponsors for one season are a small part of the larger esports trend.

“It’s a forever investment,” Kotick said.

The NFL-like structure is what drew the investment of several wealthy families, well entrenched in traditional major league sports, to purchase an Overwatch League franchise. The Boston Uprising was purchased by the Kraft family, owners of the New England Patriots, the Los Angeles Gladiators by the Kroenkes (Los Angeles Rams, Denver Nuggets, Colorado Avalanche and English Premier League’s Arsenal), the New York Excelsior by the Wilpons (New York Mets) and Philadelphia Fusion by the Roberts (Flyers).

“Whether we’re talking fans or revenue opportunities or bringing the right kinds of owners into the group, we just felt like it was a structure that had been missing in esports, frankly,” Overwatch League Commissioner Pete Vlastelica said.

Big sponsors also associated with traditional sports leagues, such as Coca-Cola, T-Mobile and Xfinity, the presenting sponsor for the Overwatch Grand Finals weekend, are also invested.

“Now [Overwatch League sponsors] have local events, a local team with local fans who will be coming and engaging and all of a sudden there’s now an opportunity for them to hit their core demographic,” said Bryce Blum, the founder of the dedicated esports law firm, Electronic Sports and Gaming Law. Blum is also a consultant for traditional sports entities investing in esports.

The league’s core demographic, consisting of 18- to 34-year-olds, is also an important factor for these brands.

“I think in some cases we’ve been able to get as good of a premium as the biggest sports that exist,” said Josh Cella, the head of global partnerships at Activision Blizzard.

The league’s broadcast rights are another potential bellwether for its future success. Streaming rights were sold to Twitch for the league’s first two seasons, a deal that concluded with the 2019 grand finals. The streaming giant, owned by Amazon, paid a reported $90 million for those rights. Broadcast rights account for a significant amount of revenue for traditional sports teams. An increase in value for the broadcast rights would auger well for the Overwatch League’s financial future.

Just ahead of the league’s 2018 playoffs, the OWL awarded additional rights to Disney XD, ESPN and ABC. The financial terms of that move have not been made public. And while there is no known interest from either side, the entry of newly announced gaming network VENN to the esports space may bring another party interested in broadcast rights.

Even with the massive coffers of Activision Blizzard and OWL franchise owners, the Overwatch League will require time to bear fruit on its significant investment. Franchise slots were reportedly sold for $20 million for the first season, a price that was believed to escalate to between $30 million and $50 million. Activision Blizzard has never confirmed those prices.

“Were the Golden State Warriors anything like they are now? Absolutely not,” said Andy Miller, the CEO and founder of NRG esports, which owns nine esports teams including the San Francisco Shock, the winner of the 2019 Overwatch Grand Finals.

Each team will be able to sell tickets and merchandise in their selected venue and achieve more localized revenue in this new model.

“It’s a huge opportunity for not just Overwatch and Activision Blizzard but all of esports as a whole to prove the model that fans will come out and support the teams for the city that they’re in,” said Rod “Slasher” Breslau, esports consultant and journalist.

Teams that don’t have designated esports arenas are instead turning local venues into esports arenas. The Philadelphia Fusion will play two homestands at The Met and one at the Jim Whelan Boardwalk Hall in Atlantic City.

“We’ve been a bit on an island,” said Joe Marsh, the Fusion’s chief business officer, regarding the team living and playing its regular season matches in Burbank. “Digitally we have the ability to activate live and in person, but we’ll be back into it full time and doing activations [in the Philadelphia area].”

But the local relocation is still just the next part of a much longer-term plan for those running the league.

“I would like to see multigenerational interest in the game that comes from parents being able to experience, as a spectator or as a player, the game with their kids,” Kotick said. “And that you have hundreds of millions of people around the world who get all the joy that comes from having that shared experience, that they get that sense of belonging.”

San Jose native Madison Portesi, 24, has paid $480 for tickets when the San Francisco Shock play homestands at the Cow Palace in nearby Daly City, Calif., on March 28 and the San Jose Civic Center on July 18. She’s already met Shock fans to watch games held in the Blizzard Arena in Burbank this season.

“You meet other fans and to kind of have that same experience locally and have the people in the bay so close supporting, you know, the same teams is gonna be really nice and refreshing,” Portesi said.

At the Overwatch Grand Finals, fans sported jerseys not just of the finalists but also the Los Angeles Gladiators, Atlanta Uprising and the Hangzhou Spark, a testament to their home team loyalty.

One fan, Rob Flanagan, dressed up as Philadelphia Flyers mascot Gritty with a Philadelphia Fusion jersey, said watching the game live is a whole new experience. It’s not just video games on a screen.

“I can watch this on Twitch, I can watch this on my computer, but when you see it live in person with other fans it takes on a whole new dynamic,” Flanagan said. “I can’t play like this. I can’t perform like this. But I love watching this.”



This entry was posted on Friday, October 18th, 2019 at 4:39 pm and is filed under Blog.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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