Future of some esports leagues, organizations unclear amid Microsoft-Activision deal

By Kevin Hitt

Esports organizations associated with Activision Blizzard, namely those in Call of Duty League and Overwatch League, are in a holding pattern and somewhat nervous in the wake of Microsoft's acquisition of the game publisher. More than a few organizations have millions in valuations tied to those franchised leagues. Microsoft will have decisions to make with CDL and OWL, particularly as new seasons get under way in '22. Does Microsoft cease operations if league performance is poor? Does it change away from a franchise structure? These types of decisions will have big ramifications for the participating organizations, which would not only lose franchise fee investments, but millions in organizational valuations (many of those tied to CDL and/or OWL participation).

THIRD PARTY AN OPTION: Operations for CDL and/or OWL also could get shipped off to be ran by third-party companies. Microsoft has already taken this approach with its revamped Halo Championship Series, which sees Esports Engine serving as global management operator for official events, including the Halo World Championship. Microsoft plans to work with other tournament operators to build out a global competitive ecosystem for Halo Infinite. The Halo Championship Series also decided to forgo a franchise model, instead focusing on an open ecosystem consisting of grassroots events and large-scale tournaments. “Microsoft could basically decide to kick out their esports initiative and say, 'Hey, it's being run by a third party organizer,'" said TSM FTX VP/Esports Dominic Kallas, whose organization has teams in Riot Games' franchised operations like League of Legends and Valorant. "Esports Engine has done an amazing job with Halo and hats off to them. But it's a big concern that if you paid anywhere in the range of $30 to $40 to $50 million for an Overwatch or Call a Duty franchise, that that's no longer a core focus of your head parent company.”

PLANS FOR XBOX UNCLEAR: While Microsoft has made it clear it wants to bolster the amount of offering on its Xbox platform, there is no clear idea what that means for esports. “If the main focus is driving numbers for players and users to their Game Pass, which has zero alignment with these esports leagues, most likely what you'll see as this kind of develops ... is Microsoft shuttering both of these leagues and basically kicking out to have outside tournament organizers operate them," said Kallas.

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