The Overwatch League will be a major step forward in the development of eSports, Activision Blizzard’s Mike Sepso has said, and the company’s perceived silence on its plans is simply an outcome of the complexity of what it’s trying to achieve.
Sepso, is the founder of MLG, the pioneering eSports organisation acquired by Activision Blizzardin January 2016. Speaking at the Gamelab conference in Barcelona yesterday, he portrayed the Overwatch League as the single most ambitious project he has seen in his 15 years in eSports; a competition that will push the entire sector forward, while putting Activision Blizzard at the forefront of it all.
“The most important thing that’s happening in the industry right now, and will remain the most important for the next couple of years, is that studios and publishers have fully embraced eSports,” he said. “I don’t think anyone out there would dismiss eSports at this point, and for 13 of the 15 years I’ve been in this business the games industry was dismissive.
“There’s no way we won’t make mistakes as we evolve this thing… But it’s not a fad, and it’s not a single technical innovation that may not develop to its full potential. It’s core DNA in the industry now.”
Stories about traditional TV networks committing to eSports coverage are still covered as important news; further steps towards the legitimacy afforded to football, baseball and other established sports. However, when asked if eSports needed TV to fulfill Activision Blizzard’s ambitions, Sepso rejected the notion without hesitation.
“We’re not creating something that we just want to capitalise on for the next couple of years. This will be a core part of the future of the eSports business”
“I’ve had this thrown at me for over a decade now,” he said. “‘When are you gonna put eSports on TV so that it’s a real thing?’
“We actually did our first TV deal at MLG in 2005, so we had a whole season on the highest rated cable network available in the US ten years ago. That didn’t do anywhere near as much for us as building our own over-the-top network did, for instance; either financially or in terms of developing a fanbase.”
While a huge chunk of revenue in traditional sports comes from TV advertising, eSports’ core demographic “is just not watching television.” Sepso estimated that more than half of the employees at MLG’s headquarters had never paid for cable or satellite TV, which signalled a huge problem for the television industry that has nothing to do with eSports.
“That’s where the world is heading,” he said, pointing out that Turner’s broadcasts of the Counter-Strike ELEAGUE got “significantly more” viewers on Twitch. The question of whether TV needs eSports, though, is more complicated; in Sepso’s view it probably does, but that doesn’t erase the writing on the wall.
“TV desperately needs younger viewers,” he continued. “I don’t know if eSports can solve that. It’s tough to imagine people just all of sudden waking up and deciding to get cable so they can watch eSports. It’s all available in a much more native environment. I don’t think the two play well together.
“I’m sure Turner saw a far younger audience for ELEAGUE than they’ve ever had for an NBA broadcast or anything else in that time slot before. It will work. It will help television hold on to a younger audience for longer, but I think television as it’s currently constructed, there’s nobody that can really save it. It’s going to change.”
This is exactly the kind of shift that Activision Blizzard is trying to capitalise on with its plans for the Overwatch League. Sepso observed that “all media businesses inherently depend on advertising” and various forms of sponsorship. So far, eSports has relied upon advertising from companies with a longstanding association with gaming to supply that revenue stream. According to Sepso, the next step for eSports is to attract “the big international consumer brands.”
“The car makers, the insurance providers; all of those big, big industries that are huge advertisers globally in other forms of media,” he said. “They have to start looking at their spending and say, ‘Why am I spending so much on television? Nobody under 40 is watching’.
“eSports is a tremendous channel for that. It’s just very difficult for outsiders to understand at this point. That guided a lot of decisions about the formation of the Overwatch League – making it more recognisable and understandable for outsiders to get a handle on.”
“Fans and the press want to take every individual data point and analyse it, without the full context of the bigger picture that’s going on”
This attempt to “guide [bigger] advertisers into the space” in a way that feels authentic is just one of the many challenges Activision Blizzard is trying to overcome. In that case, Sepso said, it means creating “new models” for sponsorship and advertising, different to those the international brands are used to when they spend money on TV sports broadcasts. “The same old 30 second commercial probably isn’t going work,” Sepso added.
The plans for the Overwatch League were first revealed in November 2016, a bold strategy built around franchised teams based in specific cities, with no relegation and consistent prize money. Sepso was asked to respond to the fact that eSports fans are international in their outlook, choosing favoured teams and players regardless of the city in which they lived and competed. That view, he said, represented “the history of eSports, not necessarily the future.”
“I think that’s a big reason why owning a local market for a franchise is a really significant thing. [Teams] can stay in that market, and promote the team and the league and the personalities to a single audience base. You won’t then have a single team trying to promote to a global fanbase all the time, which is very difficult.
“It’s easier in a hyper, rapid, early adopter model, which is what’s been powering eSports until now.”
That line is at the very core of what Activision Blizzard is trying to accomplish. When considering how to develop the Overwatch League, it had to think beyond the specific wishes of the existing fans and answer difficult questions about how to build something larger: “How do you develop new fans? How do you get people who don’t necessarily play the games interested in watching?”
The Overwatch League’s approach will do this, Sepso said, creating a focal point for eSports in a given region, in much the same way that Barcelona football club does for residents of the city. This will also provide the stability and security that eSports team owners have complained is too often overlooked by companies that operate the biggest games. Existing fans will still be able to follow international teams, Sepso said, but Activision Blizzard is, “trying to set up a structure that will take eSports into the future, without diminishing any of the strengths of what got it here.”
Sepso was asked if it’s possible for a regional eSports teams to fill a famous stadium like Barcelona’s Camp Nou. “I think it will be, for sure,” he replied. “I think that’s where this industry is heading, and we’re making an extremely ambitious push to leap ahead. In some ways it’s a self-fulfilling ambition. [Filling the Camp Nou] is never going to happen unless somebody pushes it. Who better than Activision Blizzard to do that?”
“Overwatch League will require partners with expertise in eSports team management, and the resources – capital, human and otherwise – to really dig in and build this thing”
For some observers of the eSports scene, that is far from a rhetorical question. A report from Euro gamer yesterday suggested that the organic Overwatch eSports scene had suffered since the unveiling of Activision Blizzard’s league plans, with owners losing faith and teams being dropped. According to Sepso, this a natural outcome of the scale of its plans; organic activity will inevitably dry up as the projected Q3 2017 launch date approaches.
Sepso wouldn’t comment on reports that the franchise buy-in fee would be as high as $20 million, save to reinforce Activision Blizzard’s previous claim that the information had been used as “a negotiating tactic.” Within the eSports community, the reported fee was seen as proof that the Overwatch League would privilege traditional sports brands, and make it impossible for endemic eSports organisations to join without seeking investment. However, Sepso pointed out that endemics were already seeking financial support to fund growth plans, and said, “there are just as many endemic eSports teams involved in the process of franchising for Overwatch League teams as there are traditional sports organisations.”
Even so, Sepso made no attempt to play down the fact that the level of ambition driving the Overwatch League would demand the very best and most experienced partners. “The ambition of this league is bigger than anything I’ve seen since I’ve been in eSports, and I’ve been around since almost day one,” he said. “It will require partners with expertise in eSports team management, and the resources – capital, human and otherwise – to really dig in and build this thing.”
This is also the reason for the perceived lack of information that followed the initial, impressive announcement. As Sepso pointed out earlier, those who have followed the eSports scene are used to a “hyper, rapid, early adopter model”, in which eight months can feel like an eternity. What Activision Blizzard is trying to build has no precedent, in Sepso’s view, and it may reset any and all expectations on what eSports can be, and which company is leading the charge.
“It’s hard to have all of the negotiations with sponsors and team owners and distributors and all the rest, it’s hard to have those conversations in public,” Sepso said. “Fans and the press want to take every individual data point and analyse it, without the full context of the bigger picture that’s going on. We’ve tried to maintain a good communication channel with our fanbase and the industry, without getting into the business of being scrutinised every day for every individual decision, delay or advance.
“There’s just a tremendous amount of work to do. The infrastructure and partners and everything required to get to this level of complexity is significant, but it’s definitely on schedule. You’re going to see a lot of announcements and news over the summer, and lots of activity by the end of the year.
“We’re creating a sustainable ecosystem. We’re not creating something that we just want to capitalise on for the next couple of years. This will be a core part of the future of the eSports business.”