Layoffs, team votes, and buyouts – the end of OWL?

New reporting from Ash Parrish of The Verge paints a dire picture of Activision Blizzard’s Overwatch League, or OWL, with massive layoffs and a team vote that could see many franchised OWL teams leaving forever.

The Overwatch League was touted as Activision Blizzard’s way to compete with other game development studios’ esports presences. With reported franchising fees exceeding $20 million USD, it was meant to be the next big franchised league. Blizzard was pushing Overwatch as its competitor to esports scenes at the time, like Fortnite and League of Legends.

New reports say that Activision Blizzard has made substantial layoffs to the OWL staff internally and is calling for a vote by the leadership of franchised teams on whether or not to continue the league in its current format. Teams who decide not to compete will be offered a $6 million USD buyout.

Here’s everything we know about the emerging news around the OWL and what Overwatch fans can expect.

What does the OWL vote mean?

The changes incoming to the Overwatch League were first previewed in Activision Blizzard’s Q2 quarterly earnings report. The report stated that “following the conclusion of the current Overwatch League season, the teams will vote on an updated operating agreement. If the teams do not vote to continue under an updated operating agreement, a termination fee of $6 million will be payable to each participating team (total fee of approximately $114 million).”

If that sounds dire to Overwatch esports fans, it is. In essence, the leaders of the franchised OWL teams hold the league’s future in their hands. Unfortunately for those who might want to see more OWL, many teams probably aren’t feeling confident about the future of the OWL. A report in 2021 by Jacob Wolf suggested that Activision Blizzard was still owed approximately $400 million USD by the franchised teams in OWL and CDL. This was followed in June of 2023 by reports from Sports Business Journal that said the OWL had fully waived the unpaid franchise fees in OWL.

Teams who vote not to continue with the OWL will have the option to exit the league with a $6 million dollar buyout. However, given the $20-30 million USD franchising fee and years of unprofitability, that may not cover the losses accrued by esports organizations like Cloud9 and Optic.

OWL and esports layoffs worry fans

At the same time that the Overwatch League is staring down an incredibly influential vote that could forever change the league, layoffs are happening. According to the same report by Ash Parrish of The Verge, significant layoffs are coming to the company’s esports efforts in Overwatch. The day before the report came out, approximately 50 members of Activision Blizzard’s esports department have been laid off. An employee affected told Parrish it “seems like a significant gutting of Activision Blizzard Esports.”

So yeah, I'll probably have more personal thoughts to share about this later but for now:
If you've ever been involved in the OWL — production, talent, ops, obvs, teams, & wanna talk about it, my DMs are open and my email and Signal are in my biohttps://t.co/RewMIVPGdO

— Ash Parrish (@adashtra) July 19, 2023

Blizzard is being cavalier about the future of Overwatch esports, with many senior figures reiterating to The Verge that Blizzard was fully committed to the OWL no matter what form it took. This feels like corporate platitudes to many, who see buyout proposals, significant layoffs, and years of declining viewership and popularity as threats to Overwatch’s lifespan in esports. Activision Blizzard’s past several years have been nothing but rocky, with public outrage over unacceptable workplace practices, a tumultuous pending buyout from Microsoft, and continuing difficulties in both CDL and OWL.

It’s hard to imagine that the Overwatch League will ever be the same as it once was, with Blizzard clearly acknowledging its failures by offering teams an open buyout, something never-before-seen in the league. While the developer is doing its best to play damage control, it doesn’t seem to be working. Community sentiment on social media shows a widespread feeling that Overwatch League may be over, as fans have known it for many years. Should teams decide to leave, mainstream esports organizations will take with them many fans and viewers who followed names like Cloud9 into Overwatch.

What does this mean for the league?

Fans will have to wait for the team vote in order to learn exactly what the future of the OWL will look like. Should no teams opt to leave, it could be a minimal change from what fans recognize now.

However, years of monetary difficulties and bleeding viewership have seen the OWL fall far from where it began in terms of presence and popularity. As a result, it’s hard not to imagine seeing more teams leaving the league. OWL fans already had to swallow the loss of Chinese organization Chengdu Tigers after the developer’s games were taken offline in mainland China due to failed distribution negotiations. Staring down the barrel of the team vote, Chengdu Tigers may not be the only team that is gone for good from Overwatch next season.

The team vote will be held at the end of the current OWL season, and fans can expect to hear details shortly afterward.