Though the price tag has shocked some, the news itself of Microsoft needing to cut bait with Blizzard's mismanagement of the Overwatch League has surprised no one following the e-sports side of the industry. This week the Overwatch League's twenty teams are expected to vote if they are in agreement to dissolve the league as Activision Blizzard requested earlier this year. the teams are expected to vote in favor of dissolution, and as they are all under contract, will be bought out of their contracts to the tune of $6 million each, hence the $120 million price tag. Now, don't think that this compensation will keep any of these team afloat as Windows Central is reporting that anonymous sources from these teams estimate that they have already invested on average $7.5 million per team. More team bankruptcies and closures are expected in the future after this vote is settled.
In terms of what happens next for competitive Overwatch 2, the players and viewers have a slight gimmie in that ESL FACEIT Group is expected to be the host and partner of the 2024 league. ESL FACEIT Group is backed by the Saudi Arabian government and runs the international leagues for Counter-Strike, League of Legends, Rocket League, and Dota 2. Nonetheless, the point still stands that in the future competitive Overwatch 2 will be run and regulated by a third party.
As to how the Overwatch League got to this point, the short and dirty is that the 2023 season was a complete and total disaster. Obviously, things have not been great for Overwatch 2 in general. However, the biggest reason for its failure stems from Blizzard licensing agreement with NetEase expiring, and Overwatch 2 becoming banned in mainland China, which caused a cratering in sponsorships and viewership. Sponsorship struggles are not new, as most of the league's sponsors withdrew their support after details emerged from California Department of Fair Employment and Housing v. Activision Blizzard, which layed out frequent and recurring workplace mistreatment and harassment at Activision-Blizzard. The Chengdu Hunters disbanded and the turbulence carried over to other teams that shifted regions as well. In January 2023, the existing teams entered collective bargaining with Blizzard with the help of the British law firm Sheridans, which eventually resulted in Activision waiving franchise fees owed by all teams.