The Overwatch League and “Cheering With Bits”
Earlier this year, the first season of Overwatch League was launched by Activision Blizzard in Los Angeles. The League is made up of 12 teams, 6 in an Atlantic Division — Boston Uprising, Florida Mayhem, Houston Outlaws, London Spitfire, New York Excelsior, Philadelphia Fusion — and Six in a Pacific Division — Dallas Fuel, Los Angeles Gladiators, Los Angeles Variant, San Fransisco Shock, Seoul Dynasty, Shanghai Dragons.
Already there has been huge investment in the league. The league is based on a franchise model, with teams having to pay $20m to secure a franchise spot. The team owners include some of the most influential people in sports who see esports as a logical extension of how they make a profit with their other sports teams. For example, the Los Angeles Gladiators are owned by Kroenke Sports and Entertainment, which owns a number of US sports teams; Boston Uprising are owned by the Kraft group, owners of the New England Patriots.
In January, Twitch signed a 2-year deal worth at least $90m with the Overwatch League to stream half of the Overwatch League matches.
The league is already outperforming expectations with millions of fans watching online broadcasts each week. With the average fan watching more than an hour a day, this is enticing more sponsors to be involved and sponsors already include Toyota, HP, Intel and the Sour Patch Kids, all keen to get their brand in front of the hard-to-reach millennial audience.
Overwatch Bits
One commercial advantage that esports has over traditional sports is the ability to reach fans and sell things during games. In 2017 Activision Blizzard, owners of the Overwatch League generated around $3.75bn, over half their total revenue, from in-game purchases of “skins” or other tools to enhance the gaming experience.
In February 2018, Twitch introduced a “cheering” functionality for Overwatch, which allowed fans to express team loyalty during games. To enable this, fans need to buy “Bits”, which they can then use to virtually “cheer” the teams during games.
Using the Bits allows fans to access leaderboards and rewards, such as Overwatch themed team emotes. There is also a community aspect to this “Bit economy” where total number of Bits cheered across all fans contribute to unlocking new items, including skins for everyone in the game who has contributed.
Overwatch Bits come in bundles and work out at costing approximately $0.014 each. The first day the Bit system was introduced over $150,000 worth of bits were cheered and to date over 55 million Bits have been cheered, worth over $780,000. Importantly for advertisers and sponsors, bits can also be earned by watching and interacting with adverts in-game.
Despite the current dominance of US teams in the league, the presence of teams from London, Shanghai and Seoul should be noted (currently 6th, 7th and 12th in the league standings). Due to the success of the league, negotiations are already underway to add new teams, particularly from Europe and Asia (the league’s goal is to have around 28 teams in the future) and next year teams will play home and away games against each other, as in traditional sports.
Since its launch, the Overwatch League’s growth and the success of the Bit model has far exceeded expectations. In terms of prize money it is still dwarfed by the like of Dota2 and League of Legends. Overwatch has just over a quarter of the number of average viewers as Fortnite on Twitch but it is growing fast. The League is still less than 6 months old and it seems sure to continue this growth in the future as it expands into new geographies.
Esports Interactive Platform is developing a global platform to enable direct interaction between brands, teams and audiences within the esports community. We strongly believe that we can help make a difference to the future growth of this exciting industry.
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