Call of Duty League Sets Its Sights on Franchising

July 9, 2018

Big changes could be on the horizon for Call of Duty esports.

Activision Blizzard released its 2017 public annual report on April 30, 2018 – and a small detail was brought to light by Dot Esports that had slipped through the cracks.

According to the report: “Our expertise launching and growing the Overwatch League will allow us to launch additional professional esports initiatives. Later this year we intend to expand the number of Overwatch teams and launch team sales for the Call of Duty professional league. Over time we believe our esports initiatives could rival traditional sports for audience interest, advertisers, ticket sales and merchandise sales (both virtual and physical).”

Photo Credit: Charlie INTEL

That line about launching “team sales for the Call of Duty professional league” has led to speculation that a franchised professional Call of Duty league could be in the works and that Activision Blizzard is preparing the search for organizations and investors that may be interested in purchasing a slot.

The Q1 report from Activision (released May 3, 2018) also included a hint toward a franchised Call of Duty league (granted, it’s a little more esoteric): “League capabilities to be applied to other franchises in the near future, including Call of Duty.”

Call of Duty and esports have basically developed alongside one another. There have been professional Call of Duty esports competitions since 2007, which was the early days of the esports industry. Activision Blizzard officially got in on the act when the developer formed the Call of Duty World League in 2016, a series that culminates in the annual Call of Duty Championship.

Speculation is a franchised Call of Duty League will follow in the footsteps of Activision Blizzard’s highly successful Overwatch League. In fact, the relationships forged through that league are likely to be highly leveraged since, according to the franchise contracts, Overwatch League owners are guaranteed to have the first shot at a spot in the Call of Duty World League.

Photo Credit: Dexerto

The initial teams in the Overwatch League paid $20 million for those slots, which last over a several-year period. (The next round of expansion, which was mentioned in the annual report, is expected to cost those teams even more.) It does make sense that an incentive for that $20 million buy in would be that teams get the first crack at any new leagues opened by Activision Blizzard. In many ways, the teams that were first through the door are likely trying to nurture and grow relationships with the powerful developer.

It’s a relationship that, so far, is paying off. The Overwatch League launched in January, 2018. Since that time it has accumulated over $150 million in broadcasting rights and sponsorship deals, including a two-year, $10 million Intel deal, a two-year, $17 million HP Omen sponsorship deal; and a two-year, $90 million Twitch streaming deal. According to reports, this puts The Overwatch League ahead of its revenue schedule.

Currently, only two Overwatch League franchisees, Dallas Fuel owner Team Envy and Houston Outlaws sister OpTic Gaming, have Call of Duty teams in their organizations (that leaves 10 teams without). It’s also unclear whether these teams would be granted slots in the same geographical regions as their Overwatch League squads. However, the Overwatch League has been very successful for Activision Blizzard, and while all the teams currently play in Los Angeles, the league is planning for them to move to their home cities by 2020. So, it would make sense for these teams to have “cousins” in the same area.

Perhaps in preparation for the shift to franchising, in April, Activision Blizzard launched a new division, the Activision Blizzard Esports Leagues. This new unit oversees league operations, franchise and sponsorship sales, and development of both the Overwatch League and the Call of Duty World League.

Photo Credit: Variety

Overseeing this new division is Pete Vlastelica, a former Fox Sports executive who joined Activision Blizzard when the company acquired MLG (Major League Gaming Corp). At the time, Activision Blizzard stated that it hoped to leverage the purchase to build an esports television network. MLG, which runs several video game tournaments throughout the United States and Canada, holds the exclusive operating license for the Call of Duty World League (something that occurred shortly after the acquisition).

Also of note, Activision Blizzard recently announced the newest expansion for Call of Duty: Black Ops 4 (set to release on Oct. 12). When the title was announced, Mark Lamia, Chairman of Treyarch (a major developer in the Call of Duty series), made a comment that may indicate the Call of Duty release cycle will slow down.

“It’s the deepest, most replayable game we’ve ever made across the three pillars of Black Ops 4, multiplayer, zombies, and our new mode, blackout,” Lamia said. “This is a game for every kind of player. It’s a game that’s built to last for years to come.”

Photo Credit: Game Rant

There has been a new Call of Duty released every year since 2005, however for most esports titles, that is not the case. For example, League of Legends has been out since 2009 without a sequel in sight. Sure, the game has undergone updates and changes, but it is essentially the same. Fortnite seems to be following the same model with consistent updates to the game as it is (although, Fortnite is still young, so it’s far too early to make any sequel predictions). Other popular esports titles, like Counter-Strike, have released sequels but give those titles a much longer shelf life than a single year.

Exact details of the launch date or possible franchise price for the Call of Duty league have not been revealed. This news is just another indication of the future of the esports industry. Both the North American and European League of Legends Championship Series have converted from a promotion and relegation system to a franchise league, while Overwatch was franchise from the start (as was the NBA 2K League, but that’s to be expected since it’s mirroring the NBA league format). With major esports establishing the franchise model, it makes sense that others will follow. If you have questions regarding the possibility or benefits of franchising and would like some educated answers, give one of the industry experts at eGency Global a call at 972-323-6354.