Activision Blizzard, Inc. (NASDAQ:ATVI)’s High Cost Of Buying Overwatch League Turns Away Major eSports Teams

Activision Blizzard, Inc. (NASDAQ:ATVI) is aggressively planning on how to make esports more mainstream to a point of renaming it Major League Gaming. The company has also formed a dedicated eSports division, which will be tasked with strategizing on how to make the eSports easier for global brands to grasp. However, there seems to be a big impediment ahead.

Reliable sources have disclosed that several major eSports teams are reportedly ditching their participation in the Overwatch League way before its launch.  The $20 million franchise fee for the league that Blizzard is allegedly asking has been cited as the sole reason for the abandonment of the league. Surprisingly the prices are even higher in larger markets the likes of New York and Los Angeles.

Esports is the first digital native sport

The release of Overwatch last year came with a bang given that as of January it had registered about 20 million players worldwide. It is worth noting that the eSports is the first digital sport but apparently its leagues have been growing from strength to strength. It’s Riot Games’ League of Legends, which is one of the most popular game in the world is said to have sold for $1.8 million in December.

Vlastelica, a former Fox Sports executive says, “Sports are getting older, and frankly, the content is mostly trapped behind the paid TV wall…we’re not encumbered by those same issues, which mean we can reach a much younger audience.”

But several organizations continue to pull back from fielding Overwatch teams

The league is looking forward to having geolocated franchises, whereby each team will have a city association parallel to traditional American sports leagues. However, this may not see the light of day as organizations continue to draw away from being part of Overwatch League. Team SoloMid is said to have released six of its Overwatch players.

Others organizations include Boston Bruins and TD Garden and a reliable source has revealed that more organizations are lining up. In the meantime, Blizzard’s stock was trading at $55.75 -witnessing a decrease of $0.24 or 0.43%.

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