A new filing with the SEC admits "challenges" in esports.
Activision has publicly admitted to some increasing concerns about two of its esports endeavors, the Call of Duty League and Overwatch League, in a new report.
The information comes from Activision’s latest filing with the U.S. Securities and Exchange Commission (SEC), which primarily exists to enforce laws against manipulation of the stock market.
“Our collaborative arrangements for our professional esports leagues (i.e., the Overwatch League and the Call of Duty League) continue to face headwinds which are negatively impacting the operations and, potentially, the longevity of the leagues under the current business model,” Activision said in a section titled ‘Importance of our Franchises.’ “We continue to work to address these challenges, which could result in significant costs, and such efforts may prove unsuccessful.”
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Basically, this means attempting to try and make both esports leagues more profitable may prove too expensive and, in the end, not worth it overall when it comes to the bottom line.
“Overall, we expect that our most popular franchises will continue to produce a disproportionately high percentage of our revenues and profits in the near future,” Activision said of its valuable IPs like CoD, Diablo, Overwatch, and Warcraft. “Accordingly, our ability to maintain these franchises and to successfully compete against the wide range of competitive titles available in the industry could significantly impact our performance.”
Activision publicly questioning the longevity of both the CDL and OWL is a new cause for concern for the company’s investors and esports fans alike. But the publisher has plans on how to increase revenues, and it involves a whole lot more seasonal content in live-service and free-to-play titles.
Activision said it’s “continually exploring additional ways to expand our franchises and games,” including continuous aims to “increase player engagement” with seasonal content in live-service games like CoD “with the aim of releasing such content more frequently.”
The company also admitted it has “experienced challenges in both the retention of our existing talent and attraction of new talent” when it comes to game development, but it has “seen increasingly positive trends in these areas.”
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In the report, Activision said CoD, Warcraft, and Candy Crush alone accounted for 79 percent of its consolidated net revenues in 2022.