Microsoft Could Lose $120 Million Now That Overwatch League Is Officially Dead

Overwatch League, the premier esports league by Blizzard Entertainment is finally dissolved after persistent controversies. This closure would entail a substantial expenditure of $120 million for the parent company, Microsoft, which recently finalized the $69 billion acquisition of Activision Blizzard after nearly two years of legal battle.

The news broke out in recent times when one of the OWL franchises, Toronto Defiant announced their departure from the league through an official statement. Following that The Esports Advocate reported that the majority of the teams had voted to terminate the tournament. In light of ongoing news, Activision Blizzard confirmed the dissolution through PCGamer, saying that it’s evolving Overwatch in a new direction.

We are transitioning from the Overwatch League and evolving competitive Overwatch in a new direction. We are grateful to everyone who made OWL possible and remain focused on building our vision of a revitalized esports program. We will share details with you all in the near future.”

Now that the Overwatch League is officially over, a previous report by Jacob Wolf, an independent journalist suggests that Activision Blizzard was in talks with the 20 OWL teams about the future of the league. In the case of majority teams voting in favor of OWL discontinuation, Microsoft would have to pay each team $6 million, which sums up to $120 million for all 20 teams. The scenario has unfolded now.

Reportedly, each team paid over $7.5 million in fees to participate in the Overwatch League, not including the additional millions of operating costs. However, following the staggering decline of OWL, most teams employed the law firm Sheridans to represent them, leading to an agreement between both parties. Under the agreement, Activision promised to pay $6 million termination fees to each franchise, which now falls on Microsoft.

The professional esports league had a strong start in its first season with 12 teams, which expanded to 20 in the second season. However, the third season, plagued by the COVID-19 pandemic and the shift to online play, marked a significant decline. The league also saw numerous scandals including gambling and alcohol advertisements, and the departure of major sponsors, leading to the current dissolution.

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As for the future of Overwatch esports, Activision Blizzard is reportedly in discussions with ESL FACEIT Group to manage the 2024 season, which will be the last one, if the talks are successful. ESL FACEIT, formed in 2022 following a $1.5 billion merger by Savvy Games Group, is renowned for organizing major tournaments in popular titles such as DOTA 2, Counter-Strike, League of Legends, and others.

In other news, Blizzard Entertainment recently showed off more Hero Mastery Missions coming to Overwatch 2 for season 8 (possibly starting on December 5) during BlizzCon 2023. Prior to that, master the season 7 of the FPS title with the best DPS Heroes.