Being relatively early in the esports industry’s development, news has to be pretty big to break into the general public’s consciousness. It does happen though… recently the news that has broken out of the esports community bubble is the creation of Blizzards Overwatch League. This is a massive undertaking that has professional sports organizations (Kraft Group – NE Patriots, Comcast Spectator – Philadelphia Flyers) paying somewhere in the $20 million range for a team in a upcoming league. The goal? To be the league that makes esports mainstream (and make a ton if $$).

Here’s the gist, straight from the horse’s mouth:

I first heard of the Overwatch League through my job. I work at a sports/entertainment agency that specializes in building brand partnerships with rights holders (in our case, leagues and teams). Basically, a huge portion of a team’s revenue comes from brand partnerships/sponsorship, and the Overwatch League will be no different. Those that have bought a team are already shopping it to potential sponsors in order to temper their own upfront cost, and eventually create profit down the road. For example Cloud9, who’s committed to an Overwatch League team, is partnered with Red Bull:

My company has yet to really consider representing esports properties, but I expect that will eventually change. At least I hope so, because I’d love to see my career and my interests meet.

Why Now? Esports Growth and Disruption

I’m a lifelong gamer and am all excited for the esports rise, which is happening before our eyes. For any doubters, just think about some of these numbers…

Age: The median age of traditional sports properties is getting up there – The NBA’s median viewer is 42, and the NFL’s median viewer is 50 (PwC’s 2017 Sports Survey). Leagues are desperately trying to figure out how to bring back younger viewers. Too bad they’re either memeing, snapping, or watching esports. The median age of esports viewers is only 28.

$$$>everything: The same PwC report has esports’ annual revenue rising from a projected $700 million in 2017 to $1.5 billion in 2020 – more then doubling over the next 3 years. It’s a far cry from the NFL’s numbers, but growing FAST.

The net conclusion is this: younger generations increasingly prefer esports to traditional sports, and as they grow older and occupy a larger proportion of the population, the sports industry will have to adapt. Brands endemic to esports (computers gear, energy drinks) are spending more marketing dollars on esports brands. Non-endemic brands are getting involved as well because that coveted 18-34 demo is hard to reach. ESPN is already pumping out quite a bit of League of Legends content… The NBA has created a parallel NBA 2k league… It seems like every major sports team/organization has an affiliated esports team… The trends speak for themselves.

The time feels ripe for big moves in the esports industry.

(By the way… PwC also use “eSports” which I learned quickly is very wrong after writing my first blog.)

Back to Overwatch

Anyway, the Overwatch League is particularly interesting in this context of the growing esports industry. Blizzard is seizing the moment. It is one of the first real efforts, that I’m aware of, to throw significant resources behind the creation of a league on this scale. And it is getting some serious buy in. Again, 12 teams have signed on and paying in the range of $20 million for a spot.

But buy-in doesn’t mean success or longevity. This interview from Blitz Esports was insightful really got me thinking.

Basically, VCs and a number of sports organizations have already committed significant capital to a completely unproven product (12 purchased teams to date) – the first time many of these organizations have really bet on esports (not all). Because of this, the success or failure of this league has serious ramifications for the esports industry and its growth. A resounding success will solidify a template for future ventures into esports. A failure will likely scare VCs and the likes from committing such significant funds for the near future.

TLDR: our guy Richard Lewis, thinks Blizzard doesn’t really get esports and this opportunistic move is going to go down in flames – potentially hampering the esports growth we hope to see more of.

My Take on The Overwatch Approach

The Overwatch League is a concerted effort to take a traditional sports model and apply it to esports. What’s interesting to me is that they are doing all this with the assumption that the current sports model will work for esports.

They are hoping to build a league in the image of current established and successful traditional sports leagues (NBA, NFL, etc.). That is, they want to take the model of the current NBA or NFL and apply it to their game. They are creating localized franchises (city based) and will eventually have home and away games. They are getting buy-in and capital from larger sports franchises (NE Patriots, etc.). And even their logo mimics the MLB’s.

Why try and make esports more like traditional sports? Instead, shouldn’t they expand upon the differences that have made esports successful already? I have no doubt that there are things to be learned and applied from the traditional sports model, but this approach seems like its skipping steps.

Still there’s I’m sure Blizzard has a well-thought out plan. They have been fairly successful over the years I guess…

Trusting the Process (League Development)

If we’re really going to treat esports like traditional sports, we should look at how our major sports leagues actually came about (hint – it wasn’t all at once with a game that has existed for a year).

Take basketball – after its invention in the late 1800s, it grew in popularity across the country as a recreational sport because it was fun, and you didn’t get CTE (actually, football was literally killing people back then). Eventually, people got more competitive with it and the first leagues were born but not much money, if any, was involved. There were tons – some lasted only a year, some lasted decades, some merged, etc. The sport evolved over a century, rules changed, and different organizations were on top. It wasn’t until relatively recent times that the game was really monetized, professionalized, and turned into the successful professional sport that we know today.

The DOTA Approach

I’m biased, but it seems like DOTA and its corollaries (LoL etc.) are more closely following the organic evolution that I’m speaking to. DOTA was originally purely recreational, and only due to its increasing popularity did leagues form. The game evolved dramatically over the years, with a remake, and tons of major updates which are similar to the NBA’s many rule changes since its inception.

Additionally, over the years a number of different leagues, tournaments, and organizations have come and gone – and as the scene has grown, they have begun to consolidate. Valve’s major/minor system and LoL’s LCS aren’t remotely similar to the NBA’s final template, but they are somewhat reminiscent of the NBL and ABA (which eventually became the NBA). These systems are growing organically in a way similar to that of the basketball.

The scene has largely developed from the ground up – that is, players and fans dictating what the scene will look like.

In the End, The Customer is Always Right

I don’t know whether the Overwatch League will be successful. It just seems to me that it is skipping steps and could possibly harm the development of the industry in the process. Blizzard is coming in over the top and telling esports fans what they want and taking a substantial risk that they have it right. What if they don’t?

As the older generation passes on, it looks like esports will continue to take a larger chunk of the population’s attention and ultimately $$, but the model that will win out is still very much TBD. I’m not sure what to expect, but I would like to see an esport that grew organically over time to take hold.