ACTIVISION Blizzard Esports Leagues CEO Pete Vlastelica says there is “a really good chance” Australia will have a team in the next season of the Overwatch League.

The top-tier franchise-based esports league for Overwatch, which currently has 12 teams owned by some of the biggest names in both traditional sports and esports, is keen to eventually expand up to a cap of 28.

Vlastelica confirmed to Fox Sports Australia that the league intends to add six teams for Season 2, and said Australia had produced “proactive demand” to become one of those six.

“We’d like to have more teams in Asia Pacific, more teams in Europe and the Middle East, and probably some more in North America as well,” Vlastelica told Foxsports.com.au.

“Australia has been a surprisingly active market for expansion in the last couple of months. We think there’s a really good chance that we end up with a team in Australia for next season.”

Hosts at the desk ahead of an Overwatch League match. Photo: Robert Paul for Blizzard Entertainment

There is one Australian currently playing in the Overwatch League — Los Angeles Valiant’s Scott ‘Custa’ Kennedy — while an Australian team made it to the quarter-finals of last year’s Overwatch World Cup.

The Australian Financial Review reported on Monday that Melbourne was a likely target for expansion. The city has recently staked a claim to becoming Australia’s esports capital with the announcement of September’s Melbourne Esports Open, which is likely to feature Overwatch via the finals of the local Overwatch Contenders league.

For season one, the Overwatch League has nine teams in the United States, two in Asia (Shanghai Dragons and Seoul Dynasty) and one in Europe (London Spitfire).

These areas have more developed esports markets, with the initial buy-in for a franchise reported to be around $US20 million, with potential new franchises costing up to $60 million, per an ESPN report.

However asked if this could limit potential expansion, Vlastelica said the price may be different depending on the territory.

“We’re not actually fixing the price, and so we’ll see the answer to that,” he added.

“I’ve been very impressed with the level of activity in Australia, it’s certainly one of the more active markets in terms of proactive demand, the outreach that we’re getting from owners looking to bring a team to Australia.”

Those owners have been from different corners of the esports world, with the league most interested in those involved with traditional sports teams, technology entrepreneurs and media companies.

The Florida Mayhem and San Francisco Shock get set for a match in the Overwatch League. Photo: Robert Paul for Blizzard Entertainment

The Overwatch League still intends to move into the traditional sporting model of teams hosting games in their home cities, with recent reports pinpointing that move as taking place in 2020.

Even with a broad range of expansion options on the table, Vlastelica believes travel will be a factor “but manageable”.

In Asia Pacific, Vlastelica also said the Overwatch League is most keen on expanding further into China and South Korea, as well as into South East Asia.

“We know which cities and regions we want to be in, but that’s not to say we know exactly where we’ll be next year,” he said.

“That’s because the top priority once you get past that list of cities where we want to be is finding the best possible owners. So really we’ll end up expanding into the territories where the best owners emerge.”

The League has also been in touch with owners who just missed out on the first season. Wesley Edens, a co-owner of the NBA’s Milwaukee Bucks and esports organisation FlyQuest, is a likely candidate as a new owner.

See our full interview with Activision Blizzard Esports Leagues CEO Pete Vlastelica below. Some quotes have been very lightly edited for clarity.

Activision Blizzard Esports Leagues CEO Pete Vlastelica.

Fox Sports Australia: Would you say it has been a successful first season for the Overwatch League?

Pete Vlastelica: “Yeah, I would. By most of the measures that we care about, we’ve exceeded expectations, even our own expectations. In terms of viewership, in terms of our ability to quickly ramp our partnerships and grow revenue.

“Our owners, generally speaking, are pleased with the investment that they’ve made. And I always tell the team that’s the first hurdle we have to clear, not the ultimate hurdle but the first is, are the owners happy? And they are.

“We’ve overdelivered on all of the metrics you would look to for the health of the league and as long as we keep doing that, their valuations will keep increasing and they’ll be happy. So we’re pleased.

“We came out of the gate in January and reached more fans in the first week than we expected to, and then over the course of the season we’ve continued to reach a larger audience than we were projecting.

“We just announced a sellout of our Grand Finals, July 27 and 28 at the Barclays Center in Brooklyn, and I think viewership numbers around that event are going to really surprise people. So we’re very pleased with where the league is today.”

FSA: What about expansion? You’ve said you’re looking for six new teams for Season 2, is that still the case?

PV: “That’s our target. We want to expand internationally a bit more. Right now we’ve got the first global sports league, but three quarters of our teams are in North America, so we’d like to balance that out a little bit more.

“We’d like to have more teams in Asia Pacific, more teams in Europe and the Middle East, and probably some more in North America as well.

“Australia has been a surprisingly active market for expansion in the last couple of months. We think there’s a really good chance that we end up with a team in Australia for next season.

“But ultimately the way we think about expansion is, we’ve identified markets that we want to be in ultimately once the league is at 28 teams, which is where we’ve said we would probably cap the league.

“We know which cities and regions we want to be in, but that’s not to say we know exactly where we’ll be next year. That’s because the top priority once you get past that list of cities where we want to be is finding the best possible owners. So really we’ll end up expanding into the territories where the best owners emerge.”

FSA: So what about the buy-in? Is that something that changes depending on the size of the market — I’m thinking in terms of Australia, where we’re still in a pretty formative stage with esports. Would that limit the options for backers here?

PV: “It could. The price may be different for some territories. We’re not actually fixing the price, and so we’ll see the answer to that.

“Like I said I’ve been very impressed with the level of activity in Australia, it’s certainly one of the more active markets in terms of proactive demand, the outreach that we’re getting from owners looking to bring a team to Australia.”

Fans celebrate a result in the Overwatch League. Photo: Robert Paul for Blizzard Entertainment

FSA: What types of groups are reaching out to you — is it more existing esports organisations, traditional sports teams?

PV: “Without breaking any confidentiality, what I can tell you is the type of groups we’re interested in working with are groups that bring more to the table than just dollars.

“Because there’s a lot of interest in esports right now in the financial investment community, it’s a hot category. A franchise league structure is being viewed as a relatively safe bet inside the category.

“But that’s not actually what we’re interested in; we’re interested in groups that are bringing strategic value to the table, who we can present to our 12 owners as partners that they can learn from and will help expand the league more than just as a financial investment.

“So if you look at the composition of the league so far, it will give you a good sense of the groups we’re targeting moving forward. We’ve got a nice mix of traditional sports teams owners, like Robert Kraft and Stan Kroenke, plus media companies like Comcast, and technology companies like NetEase, and technology entrepreneurs like Kevin Chou, esports entrepreneurs like Jack Etienne and Andy Miller.

“It’s a good blend, but broadly speaking the categories we target are traditional sports team owners, tech and esports entrepreneurs and media companies.”

FSA: So if you were to project out — will there be an Australian team next season?

PV: “We’re not through the process yet. Given that we’re not adding an unlimited number of teams, we’ll have to make some decisions.

“But I’ll say that I’ve been very impressed by the quality of the ownership groups that are stepping up in Australia and how seriously they’re taking the process. I think we’ll certainly have some good options and I’d say that ultimately, before all is said and done, we’ll have a team in Australia before we cap at 28 teams.”

FSA: Are you still keen on eventually moving all of these teams out from the set-up in LA to their home cities, for more of the traditional sporting model?

PV: “Yeah, that is the model. There’s a lot of detail still to figure out before we get into that. But that’s the model, that’s the league we designed, it’s the opportunity that our owners invested in and we’re committed to working closely with our owners to get them ready for home games.”

FSA: Does that limit your options at all in the immediate future for expansion? Flying a team out for one match in Australia might be a bit tough.

PV: “Travel is a factor, not just for an Australian team but for all of our teams. These owners, our current owners, have gotten comfortable with the idea they’re going to be spending a lot of time on aeroplanes.

“The good news is the teams are relatively small; it’s not like travelling a rugby squad, right? Our players are young and professional esports players are used to spending a lot of time on planes because competitions are all over the world. So travel will be a factor but I think it’s manageable.”

FSA: Is there anywhere else in Asia Pacific that you’re really interested in getting into?

PV: “Yeah, for sure. We have a team in China (Shanghai Dragons) but there are other big markets in China where we don’t have teams. Shanghai is representing the country right now but we think there’s opportunity to expand in China for sure.

“We think that Korea is just such a great market for Overwatch that even though we have a team in Seoul, we think it makes sense to consider expansion inside Korea.

“We really like South East Asia, broadly. We’re excited to talk to groups there. Those are the territories we’re spending the most time on right now.”

FSA: In terms of the process, is this you reaching out to regions and putting feelers out, or is this people coming to you with proposals?

PV: “It’s a combination of the two. There are a number of groups who we were in conversation with last year who either we engaged too late, or engaged us too late, or we just couldn’t get them over the line for one reason or another who we’ve been talking to since about adding a team or two.

“And then there are some groups that we’ve targeted explicitly based on the importance of the city of the market, and the fit of the group or owner in the city. And then I think the buzz around the league and the quality of our current ownership has brought a number of groups forward proactively. So it’s a real mix.”

FSA: And just more broadly, you’ve mentioned Australia has really surprised you. Are we overrepresenting per capita?

PV: “I’m not sure about per capita. Australia and New Zealand is a really strong region for the game, so its an overrepresented player base per capita in the region. And I’m sure that has something to do with the strong interest in the region in owning franchise.

“So when I say that it has surprised me, I guess I just mean that there are more qualified groups reaching out proactively than I expected.”