Since its formation in 2017, the Overwatch League—the professional esports program for Activision Blizzard’s Overwatch hero shooter—has drawn frequent comparisons to traditional sporting institutions. Its stated aim, as WIRED put it in a 2017 feature, was to become the new US National Football League.
The two institutions certainly overlapped: The Overwatch League was the first major esports league to franchise local teams in major cities, and it features live spectator events with hometown crowds and salaried athletes. The goal was to offer esports fans a more traditional sports model, where they could go to a local arena or venue, see their hometown team play against an “away” team, and cheer during the event. The model offered local pop-up stores, team merchandise, ticket sales, media rights, and licensing.
Well-known sports tycoons co-own multiple esports teams. Steve Bornstein was CEO of the NFL Network before he became Blizzard’s esports chair. (He told WIRED in 2017, “When I left the NFL, the only thing I saw that had the potential to be as big was the esports space.”) No more potent symbol of the league’s ambition existed than the plans for a Philadelphia Fusion stadium: a $50 million, 65,000-square-foot, 3,500-seat arena, projected to turn Philadelphia into an “esports town.”
As Cecilia D’Anastasio recently revealed to Bloomberg, Activision Blizzard enticed team buyers with a projected league revenue of $125 million by 2020. This money has not materialized. Though buoyed by the release of Overwatch 2 and the beginning of a new season of the Overwatch League, viewership has dwindled. Overwatch League 2022 Summer Showdown, for example, was less popular than the two previous years’ events, according to Esports Charts, with just 51,000 peak viewers—particularly grating when you consider franchise owners pay upward of $20 million to license a team.
Questionable moves—like switching the Overwatch League’s primary broadcast medium from Amazon-owned Twitch, the most popular site on the web for livestreamed game content, to YouTube in early 2020—have driven viewers away. Shortly after that move, Covid-19 shut down the live, in-person events and tournaments that gave the League life, along with the international travel that players relied on to get quickly from their hometowns to matches. On top of all of those factors, allegations of abuse and harassment inside Activision Blizzard led gamers, advertisers, and sponsors to abandon the League, forcing the company to scale back some of its growth ambitions.
In 2023, the League’s path to profitability is unclear. Pessimism is compounded by the uncertain future of its pioneer, Bobby Kotick, and Activision Blizzard’s decision to lay off 50 esports employees in 2021. Even now, the US Federal Trade Commission is seeking to block the company’s $69 billion acquisition by Microsoft. It’s an understatement to say the League has had a rough time over the past several years.
The latest development in this saga is the rebranding of the Philadelphia Fusion, one of the League’s more popular teams, to the Seoul Infernal. The team will relocate and become the second Seoul-based team, alongside the existing Seoul Dynasty. (Most Overwatch players are South Korean, and the majority of the competition moved there during the pandemic, while Comcast owns Korean company T1 Entertainment and Sports.) The stadium has been abandoned and will become a retail facility instead.
These troubles come during an economic downturn and a dampening of esports hype, with investors and sponsors growing impatient with the growth-before-profit model. 100 Thieves, the second-most-valuable esports team in the world, just laid off a sixth of its workforce. It’s not that esports is dying; it’s that investors are grappling with wildly exaggerated expectations, particularly in the US. Discussing the Overwatch League in the same breath as the NFL now seems premature, at the very least.
“Those numbers were totally unrealistic,” says Tobias Scholz, an assistant professor at the University of Siegen for Human Resource Management and Organizational Behavior and a founding chair of the Esports Research Network. “Before, in the US, if you say, ‘Hey, I did something with esports’: Here are 2 million (dollars). Suddenly, they feel the pressure. Teams will struggle a lot in the next few years, similar to 2008, where we saw a major turnover of teams.”
The problem is not just financial, it’s conceptual. In Global Esports: Transformation of Cultural Perceptions of Competitive Gaming, Rory K. Summerley points out that easy comparisons between esports and traditional sports like the NBA and NFL are misleading. Esports currently have more in common with “late sports,” as he terms them, the most successful of these being the X Games and UFC (and these are just the lucky survivors).
“In comparing esports to traditional sports, there is a risk of making natural equivalences that fail to look at the history of similar endeavors (such as late sports or sports institutions that have ceased),” Summerley says in the same paper. “Esports are unusually unstable compared to other sports and still command only a relatively niche audience even among people who regularly play or watch video games.”
Compared to traditional sports, the institutional landscape for esports is chaotic, says Cem Abanazir, a lawyer focused on the sports industry, in another paper. Unlike modern sports, “esports lack a monopolistic international federation having the duty and power to make the rules for all disciplines of a sport,” he says. “There are various organizations organizing international tournaments for various video games … video game publishers themselves have taken the mantle of organizing and promoting their own esports competitions based on the video games they develop,” Abanazir writes.
Rooted in mythology and history, traditional sports command cultural capital and institutional stability (and the government subsidies that come with that status), types of support esports lack. And comparisons to sports established in the first half of the 20th century are simply unrealistic. “The US is trying to copy-paste this NFL/NHL/NBA concept,” says Scholz. “It’s a cultural thing: The US is always about this hype, this identity of throwing money at it. They are more risk-taking. It’s something we saw in esports quite a lot of times, where if there is a crisis in esports, the US suffers the most and several teams are quitting or have to stop.”
Europe, Scholz says, has always had less wild ambitions and enjoys strong support even outside of the top leagues. And the move to Seoul shows just how viable South Korea remains (or at least how far ahead of the pack it still is). In China, where four of the Overwatch League’s 20 teams reside, the League has seen promising growth, with rumors of another local team exploding on social media.
Some of this hype surely derives from the wider game industry’s relentless success. Yet the line from billions of gamers to billions of esports viewers is not inevitable.
Karol Severin, senior analyst and cofounder at Midia Research, says that one way to entice more gamers (leaving non-gamers aside, for the moment) is to develop a hook beyond the games themselves.
He argues that Riot games, makers of League of Legends and Valorant, has hit on a winning formula with K/DA, a virtual K-pop band with hundreds of millions of views on Youtube, broad merchandising, adoring fans, and regular performances at Riot-hosted events and tournaments. Turning profitable comes down to finding other avenues of revenue, whether that be streaming, hardware, or merch.
“If esports is going to remain about esports, it’s only ever going to appeal to the small segments of consumers,” says Severin. While emphasizing entertainment beyond the sport itself might seem cynical, it makes business sense. Popcorn famously saved many movie theaters during the Great Depression, Severin points out.
The fate of the Philadelphia Fusion’s stadium fits into these broader questions. Forget Covid-19: Why would a brick-and-mortar stadium bring in massive revenue for a very online sport where streaming is free? The digital scene in Philadelphia, according to Technically, continues to grow, stadium or no. Even the idea of a “hometown team” doesn’t seem a foregone conclusion in such a digitally rooted sport.
Which games will delight specific audiences also remains somewhat of a mystery. Why is Valorant popular in Japan but not Overwatch 2? Intelligibility and accessibility remain hurdles and feed into debates about gatekeeping. Many of these titles are fiendishly complex—as they must be to compel professional players. But if a gamer tuned in to a professional League of Legends or Overwatch 2 match, would they understand the stakes or skills involved? Do the production elements—commentary, for example—help bridge that gap? Such unresolved questions have consigned esports to a niche (which will not bother most fans). But perhaps the answer is simple: Esports may only fulfill loftier expectations with the release of the right game.
