A closer look at the Call of Duty League multimillion-dollar buy-in madness
With the beginning of 2020, the start of the Call of Duty League (CDL) is approaching. Time for me to recap what is known so far and discuss the multimillion buy-ins.
Many people were surprised by the initially reported buy-in of $25 million for a franchise spot to the Call of Duty League. But esports veteran Scott Smith leaked that the actual buy-in raised to nearly $40 million per slot and that the LA city spot gets traded at around $60 million. For most people, these sums are pure madness. But are they? To understand and evaluate this evaluation, we need a deeper understanding of the Call of Duty and the esports ecosystem.
The plans for the Call of Duty League
First of all, what are the plans Blizzard has for the CDL? From what is confirmed the CDL is a geo-located franchise league featuring twelve teams in its first season. Taking a look at the OWL, I assume that they will try to add further franchises for the second season. The league starts on January 24th and is played weekly. Every city has two home standings over the course of a season. These are 2–3 days long events featuring multiple other teams of the league. The whole league format ends with the best six teams competing in a playoff format during the championship weekend.
While it’ s a big discussion point that esports teams are tied to cities and something I personally don’t like, I think it’s a smart move when the league travels to a different city every weekend. This ensures the franchises to have great opportunities to gain a local fanbase and do fan activation events. In addition, it will help to increase the online audience, as it is a completely different vibe from a season that takes place exclusively in a studio. Therefore, having different venues will not only increase the overall amount of people attending the gamedays in-person but also the number of views on streaming platforms.
The Investors
The Call of Duty League features twelve teams, from established and new organizations, in its first season. Similar to franchises from traditional US sports, they are city-based. I marked the teams in bold that are operated by an organization that also fields an overwatch league team:
- Atlanta Faze (FaZe Clan and Atlanta Esports Ventures)
- Chicago Huntsman (NRG Esports)
- Dallas Empire (Envy Gaming)
- Florida Mutineers (Misfits Gaming)
- London Royal Ravens (ReKTGlobal/Rogue)
- Los Angeles Guerrillas (Kroenke Sports & Entertainment/owners of Arsenal FC, LA Rams, Denver Nuggets)
- Minnesota Røkkr (Gary Vaynerchuck and WISE Ventures Esports/owners of Minessota Vikings)
- New York Subliners (Sterling VC/ arm of Sterling Equities which owns NY Mets)
- Optic Gaming Los Angeles (ICG)
- Paris Legion (c0ntact Gaming)
- Seattle Surge (Vancouver Canucks and enthusiast gaming (Luminosity))
- Toronto Ultra (Overactive Media)
Unsurprisingly, most teams are based in the US. In fact, eight teams are from the US while Europe and Canada have two teams each. To take a further look at the investors, CDL was able to attract a lot of non-endemic investors, mainly owning other sports franchises. Also, 9/12 teams have an investor, who also owns an OWL team. This indicates that most owners of OWL teams still believe in the model despite a lot of criticism and skepticism.
But on the other hand, we have to take into account that a lot of big organizations aren’t involved in the league. Most famously Cloud9, who are valued as the most valuable esports organization, according to Forbes. It’s pretty safe to say that Cloud9 passed on the opportunity and weren’t excluded by Blizzard since they already own an OWL franchise. For other big names, such as TSM, Team Liquid, G2 and Fnatic, we can’t be sure if Blizzard denied their application or if they weren’t interested but I would assume that they weren’t interested, due to the high buy-in. Nadeshot, the founder and CEO of 100Thieves, also made a video, explaining that they aren’t bidding for a spot.
Call of Duty — the game
Call of Duty is a first-person shooter published by ActivisionBlizzard. The series usually launches a new title in the 4th Quarter of every year. While Call of Duty should, in theory, be a big esports title due to Call of Duty’s incredible sales and player base over the last decade (the series has been the best selling console franchise for nine of the last 10 years) and personal brands bigger than in any other esport, the game’s esport scene is miles away from big esport titles, such as League of Legends, Dota 2 and CS:GO.
Modern Warfare, which was released on 25 October 2019, broke a number of records. According to Daniel Ahmad, MW is the best-selling game 2019, the biggest COD PC launch, the biggest Activision digital launch, the best PS4 launch within 3 days, and with $600 million in sales, the best-selling COD within the first three days.
The league’s success depends to a large extent on its ability to transform the huge player base into regular esport spectators — something that all major titles are more or less struggling with and COD has not had much success with in the past.
Brands
Brands are the biggest asset for every esport but for Call of Duty they are even more important in driving viewership than for any other game. Call of Duty’s scene was mainly build on and grew together with OpTic Gaming, FaZe Clan, Team EnvyUs and of course all the personal brands behind these organizations. And this shows clearly in the numbers. According to a Twitter blog post, 5 out of the 10 most-tweeted-about esports athletes in 2018 are playing Call of Duty and four of them play(ed) for OpTic or FaZe Clan. (Important to note: Twitter dismissed Fortnite players)
Further, multiple CoD players have a massive youtube following. Censor has 2.57m subscribers, Scump has 2.44m subscribers, crimsix has 626k subscribers and multiple others have above 100k subscribers.
And especially these strong (personal) brands are what makes Call of Duty such a special esports. They need to gain an even broader reach to achieve significant growth of Call of Duty’s viewership in the following years. However, it’s unclear how the fans will respond to the newly formed brands in the end. There is still a FaZe and Optic but after Optic got sold to ICG and Hecz left, the Optic brand took incredible damage.
Also, as I touched before, Call of Duty hasn’t had huge viewer numbers in the last years even though these strong personal brands already existed.
Viewership
Next comes the viewership, because a high number of spectators will be a make or break for all esports. But it’s especially important for franchise leagues that require a big buy-in. Since investors want to make money with their investment and organizations make money with fans, a large number of fans are required to support twelve teams.
Even though CoD has record-breaking sales, outstanding fan engagement and strong personal brands the viewership numbers are concerningly low and don’t show a real growing trend.
As seen on the graph (numbers are taken from escharts.com), the usual average concurrent viewership for Black Ops 4 (the predecessor of this game) is between 41k-58k viewer per tournament. Only the first tournament of the games life cycle and the championship, the biggest and most important tournament of the year, are outliers. I didn’t include the Call of Duty League into the graph because the formats are too different but the leagues numbers are even more concerning. In 2018/2019 the league had an average concurrent viewership of ~21k viewer and peaked at ~62k viewer.
Let set sink in…
A rumored buy-in of $25m-$60m for a league that averaged a concurrent viewership of 21.000.
In the past, the COD ecosystem existed around the tournaments held every few months. The highlight of each year was the Championship, for which points were collected through tournament placings and in the league over the year. The league happened on the side but had no particular relevance except that it was a way to qualify for the Champs.
Now there will only be the weekly match days, which will end in a playoff weekend. Since these match days take place on weekends, are played in front of a crowd, at different locations each time and are no longer in the shadow of the big tournaments, I expect that the audience average for the CDL will increase significantly. Overall, I expect an accv of 35,000 viewers in the pessimistic scenario and 60,000 viewers in the highly optimistic scenario.
But is there any hope that the viewership for Call of Duty esports will increase over the next years? — I highly doubt it, Call of Duty is a casual game, not an esports.
CoD is a game designed for fast-paced action and fun, not a competitive one. To make it suitable for competitive play, the pros play under a different ruleset than the casual player base. Most notably, the pros play 5 vs 5 games, while casual games have more players. Another important factor is that the majority of casual players are focused on their KDR (Kill/Death Ratio) and not the victory of the game, the opposite is the case in professional play. Therefore the game has a natural disconnect between its large base of casual players and the professional scene.
The next problem the game has as an esport is that its viewing experience is very poor. I have two major problems with CoD: It’s confusing and you can’t see the skill of the players as good as in other games (e.g. CS:GO). This is again due to the game's casual nature and focus on console play. Since the game was designed in a way that the players have as many gunfights as possible in a short period of time, there is often a problem as a spectator of tournaments that you get lost (a bit) in the action. Even Hecz, the founder of Optic Gaming, admitted in his podcast that he is in some situations cheering for the wrong team because the game is so fast and confusing.
Comparing the CDL to League of Legends
The biggest competitors to any esports league are probably the western franchise leagues of League of Legends. For both western leagues, LCS (North America) and LEC (Europe), the buy-in was around $10 million. This is significantly less than the buy-in for the CDL, although LoL has an established esport, has higher viewer numbers than the CDL and has a higher growth rate of viewers.
Of course, only one franchise can be the biggest esports and there is room for several successful esports but since the Call of Duty League buy-ins were far above the buy-ins for the LEC and LCS, CDL has to be compared to them and challenge LoL for the number one spot. However, I only see CoD in fifth place, which it must also hold against Rocket League. Far behind LoL, Dota 2, CS:GO and Overwatch.
But we should acknowledge that the LEC and LCS spots are already sold and the opportunities to buy an organization’s spot are very rare. As a result, ActivisionBlizzard can raise prices due to the fear of missing out on many investors who have not entered League of Legends.
Conclusion
In my opinion, the CDL is set to fail. Despite having huge personal brands and a massive amount of casual players every year, Call of Duty wasn’t able to convert a lot of fans into esports followers so far. A game that isn’t meant to be played competitively as the core problem, mixed up with a low viewership that hasn’t shown real growth in the past years and spots selling at an insanely high valuation are extremely unfavorable conditions to succeed with.
However, if the geo-located franchise model works out and the organizations can use the strong personal brands to gain big sponsoring deals, I could see a world where the league isn’t among the biggest viewership wise but has an incredibly strong monetization. But even then, the huge buy-ins will be a burden on the organizations since the investors want a nice return on their investment.
Further, since most investors also placed a significant bet on the Overwatch League to succeed, the CDL has to perform extraordinary well in case the OWL will fail in the next years. Because it’s really unlikely that an investor who lost money on the OWL will continue to support a similar business model that isn’t performing exceptionally well.
