Microsoft may lose $120 million due to the Overwatch League shutdown

 Overwatch League.
Overwatch League.

What you need to know

  • The Overwatch League's 20 teams are currently voting whether or not they want Activision Blizzard to dissolve the league.

  • Most are expected to vote to end the league. If this happens, Activision Blizzard — now under Microsoft's wing — will pay each $6 million. This adds up to $120 million in total.

  • Each team reportedly paid $7.5 million in fees to play in the league, and millions more in operating costs.

  • The Overwatch League has been on the decline for some time now. Activision Blizzard is expected to work with ESL FACEIT Group for the 2024 season of Overwatch esports.

When Blizzard Entertainment's premier esports Overwatch League organization shuts down, Microsoft — which recently finalized its $69 billion acquisition of Activision Blizzard after nearly two years of fighting regulatory roadblocks — may lose $120 million.

According to a report, Activision Blizzard approached the Overwatch League's 20 franchises with a plan for the future of Overwatch 2 esports, along with a request to cast votes for or against the continuation of the existing league, in October. Though the company hasn't received every organization's proposal yet, it's expected that most will vote to dissolve the Overwatch League.

If that happens, Activision Blizzard plans to give each of the league's 20 teams a compensation payout of $6 million. That adds up to $120 million in total, and with Activision Blizzard now under Microsoft's wing, that money will ultimately come from its checkbook. Reportedly, each franchise paid over $7.5 million in fees to participate in the Overwatch League, with operating costs since 2017 costing additional millions.

Overwatch 2
Overwatch 2

The writing for the Overwatch League has arguably been on the wall for some time, as it struggled to maintain its initial success and momentum past shifts away from esports and the onset of the COVID-19 pandemic in 2020. These disruptions led to the cancellation or restructuring of matches held at venues across the United States that fans could attend, and excitement for the league waned over time.

BlizzCon 2023

Blizzcon 2023
Blizzcon 2023

- Every Overwatch 2 announcement
Every World of Warcraft announcement
Every Diablo announcement
Phil Spencer makes an appearance

Earlier this year, most Overwatch League teams employed the British law firm Sheridans to represent them and hammer out an agreement with Activision Blizzard. After negotiations, the publisher then made its offer of $6 million for each organization in late July.

As for the future of Overwatch esports, Activision Blizzard is expected to work with ESL FACEIT Group to handle the 2024 season, according to sources familiar with the plans. ESL FACEIT Group was formed in 2022 after Savvy Games Group acquired both ESL and FACEIT in a $1.5 billion merger. The Saudi Arabian-owned organization runs several of the biggest esports competitions in the world, including those for Counter-Strike, League of Legends, Rocket League, and Dota 2.

This news came alongside BlizzCon 2023, during which developer Blizzard showed off several planned upcoming releases for its biggest titles. This included the announcement of three new expansions for World of Warcraft, new changes and expansion content coming to Diablo 4, and a look at what's coming to Overwatch 2 in Season 8 (expected to start on December 5) and beyond.

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