Esports & The Overwatch League

Former Business Director at Overwatch, Blizzard Entertainment

Why is this interview interesting?

  • Different esport league structures
  • Comparison of The Overwatch League and traditional sports like NFL or NBA
  • Implications of the publisher control over league rights
  • Outlook on team economics
  • How leagues can align incentives between puiblisher, team, players and fans
  • Is esports a marketing opportunity for the publisher or a real revenue opportunity?
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Executive Bio

Matt Wyble

Former Business Director at Overwatch, Blizzard Entertainment

Matt is the Former Business Director for Overwatch, one of the leading franchises for Blizzard Entertainment, and publisher for the leading esports Overwatch League where he was responsible for the commercial performance of the whole franchise. Matt spent 7 years at Blizzard Entertainment, previously working on Team 5 (Hearthstone) where Matt led the business operations and scaled Heartstone’s esports leagues from scratch. Read more

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Interview Transcript

Can you start by sharing some context on your role, when you joined Overwatch?

I spent seven years at Blizzard Entertainment and the last role I had there was as the business director for Overwatch which is, essentially, responsible for the commercial performance of the franchise. So Overwatch the game, any consumer products, any ancillary business, business operations, business development, product management, growth, analytics; all those commercial operations pieces were my responsibility.

Can you explain how an esports league, typically, works, versus the more traditional sports leagues that we are familiar with?

The first part of that answer, in terms of how an esports league works, is that it’s highly variable. There are all different types. One aspect that creates a lot of that diversity is how involved the publisher is, in producing esports. In traditional physical sports, ball sports, where obviously, no one owns the rights to basketball or American football or soccer, the rights for a video game are held by the publisher. They may choose to hold those rights a little more tightly and create a more structured league system. The examples of that would be the Overwatch League, which I was involved with, in the high-end esport competition, based on Overwatch, the game. The League of Legends Championship Series, probably the biggest esport in the world, has moved towards this more centralized model – I would describe it more like a North American sports model – where the owners of these teams operate in a closed league system; they purchase the right to be part of that. Then they co-operate the league in some way, with the publisher, generally.

There’s another version of that which is a little bit looser, which is something more akin to Counterstrike or Dota 2, where a publisher might provide some rules and maybe they provide a centralized championship or something like that, but they’re not nearly as involved in the operation of individual tournaments and things of that nature.

Then there’s an even more extreme, which is maybe like a lot of the fighting games – Evo is an example of this – where the publishers are really not directly involved. They’re just letting this thing happen and it’s being run and managed entirely by third parties. There’s a huge spectrum of different ways that esports work and it’s still evolving pretty rapidly. I think a lot of that is tied into, what makes the most sense for an individual esport, really depends a lot on the nature of the game and what the publisher’s goals are in creating that esport and how they think about why that’s valuable for them, in their business.

What’s your view on how a publisher would look at the differences in league structure?

There’s a few different ways that publishers look at it and they might look at it very differently, by game. For example, for the Overwatch League, I think the team, in the broader Activision organization, saw the potential to build a more standalone, more evergreen sports league, that can grow as a business, unto itself. It’s related to the game and the game, itself, would benefit tremendously, of course, for having a popular esport. But there is also, they felt, a direct opportunity for meaningful business, by creating a more closed league style system.

There are a lot of avenues for that. There are things like media rights, licensed apparel, tickets to live events; a lot of the same revenue streams that exist in live sports, traditionally, could also be available there. That’s one end of the model, where you look at this as a business unto itself, that you see being meaningful and accretive, overall. The other extreme, potentially, is really framing the esport as a marketing vehicle for your game. Is this really about marketing in a community hub, for your game, as well? Is having your esport more about, hey, we’re going to create this thing that keeps this community vibrant, produces new Twitch streamers, as an example, has all these benefits that relate back to your core business of the game and that’s just a very different model. That model used to work on a game called Hearthstone and I set up and led most of the creation of the esport content for that game, which was really big and we invested a huge amount of money in it, but it was really more focused in this way. It was more about, this is a community event; this is more designed to make the game more successful and build out the community of players around the game and create that content. How that’s valuable to us is that it makes the game itself more vibrant.

How do you think the big publishers today look at esports? Do you think it’s more marketing or a real revenue opportunity?

Frankly, I think that’s still TBD. The biggest esport in the world is League of Legends, I would say; it’s been around for quite some time. It’s also one of the biggest games in the world. In esports, the value of a game tends to be tied, pretty closely, to the value and popularity of the game itself. It’s still to be seen, to some degree, can you create and scale and sustain a really large business, on the scale of a AAA title, with hundreds of millions of revenue a year, depending on the specific title, but in that zone? It’s not clear yet. Getting some clarity on that point is going to take a long time.

The thing I used to say, generally, is if you think about it more in the context of sport, there are very few persistent sports leagues that are tremendously valuable. They’ve taken a long time to grow and sustain and to be built, somewhat independent from the actual play of the game by the populous. For instance, very few adults are playing American football regularly and lots of fans have never played, organized much recreational football, but they are still huge fans of the National Football League, of the NFL. I used to say, we’ll know that an esport is a permanent business, when the first time a parent takes their child to an esport event – which is already happening – when that parent, in the past, had been taken to an esport event by their parent. When it becomes three generations, that’s when you know it’s forever.

There are real challenges there. A large challenge is that games are still a relatively new development – particularly live-service games – especially in the context of history of sport. They are maybe 15 or 20 years old, give or take. The oldest of these games that were really early and vibrant, are less than 15 years old; more like a decade old. There’s a question of, can that individual game sustain, over decades, and carry an audience with it in the same way that basketball or soccer or baseball are able, over many decades, to sustain and grow that audience. It takes a long time to build it up, but once you have it, it’s amazing.

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Esports & The Overwatch League(July 10, 2020)

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