Out of Their League

Activision Blizzard’s Overwatch League has struggled to live up to Bobby Kotick’s grand ambitions

During 2016’s BlizzCon, Activision Blizzard Inc.’s annual event to promote its biggest video games, Chief Executive Officer Bobby Kotick held private gatherings for a handful of sports-business billionaires and people involved in the business of competitive video games, or e-sports. He pitched attendees —including his friend Robert Kraft, owner of the New England Patriots, and Los Angeles Rams owner Stan Kroenke—on his plans to start a league where teams would compete in his company’s hit game Overwatch.

The e-sports league would resemble traditional sports, with fans visiting arenas in major cities to watch live competition, while teams would make money by selling tickets, T-shirts, and hot dogs, and sharing in profits from sponsorship and broadcast deals. Activision Blizzard Esports later detailed what those guests had to do to get in on the ground floor: write a $20 million check for the rights to become one of the original franchises. Kraft was the first to agree. Kroenke soon followed, as did the Wilpon family, then owners of the New York Mets. (One prominent Overwatch fan who attended the meeting, Elon Musk, didn’t bite.)

For Kotick, who’d been leading Activision Blizzard for more than two decades, e-sports was one prong of a plan to transform his company into something even bigger than a game developer and publisher. It would become a media giant, savvily leveraging its beloved games into movie deals, spinoff games, and, now, a sports league. Within a year, team owners had promised $240 million in franchise fees, and the league had lined up tens of millions in sponsorships from companies such as T-Mobile and Intel, as well as a $90 million deal with Twitch to stream the first two seasons.