Behind the scenes at the OWL: Esports’ biggest gamble – part one

Robert Paul / Blizzard Entertainment

It has been a turbulent 12 months for the Overwatch League. While many enjoyed watching the San Francisco Shock pull off an incredible run to the Season Two championship, behind the scenes all was not well as many staff members lost their jobs or clashed over the direction of the tournament.

It’s led to a situation where respected executives and broadcasters are quitting, leaving the league in what appears to be a perilous state in 2020. But how did we get here? In this report – started in 2019, over a month before esports publication Upcomer leaked details of the finalized plans for the next Overwatch League season – I interviewed many former and current employees at Activision Blizzard to find out exactly what’s been going on behind the scenes.

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During the course of these interviews, Activision Blizzard made multiple changes to the schedule and plans for the league, supposedly due to some concerns that were held by the Overwatch League teams, Blizzard staff and broadcast talent. Rather than retroactively sculpt this report to reflect the changes made, I am going to include the original quoted concerns as a way to maybe help explain why some of the changes occurred.

The report is made up of interviews from dozens of sources at all levels, including team management, players, broadcast talent, production staff and Blizzard staffers across multiple divisions. Sources all agreed to speak under the condition of anonymity due to fear of professional reprisals.

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The Impact of Nate Nanzer’s departure

On May 24, 2019, it was announced to a shocked public that Nate Nanzer, the commissioner for the Overwatch League, would be leaving Blizzard after over four years at the company.

Nanzer was not only instrumental in getting the league up and running but was also its biggest cheerleader. The timing of his departure – just a few months before a viable plan for the OWL “home and away” season – was awful both from an organizational perspective and because of how it looked. The fact he was leaving to go to Epic Games, a company that has made overtures towards esports but fallen woefully short with Fortnite, only made it seem worse.

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His was the first of many departures. On June 1, I reported that there was set to be a mass exodus of staff from Blizzard, most notable among them Kim Phan, their Global Product Director. In that report, a source explained the reason behind so many staff choosing to leave.

“Right now, there’s a feeling that a lot of the senior management just don’t understand esports,” they said. “But there is no room for negotiating with these people. They are convinced their vision, which is more in line with televised sports, is the right way to go and it has just made people miserable.”

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Blizzard EntertainmentBlizzard Entertainment
Nate Nanzer left Blizzard Entertainment back in May 2019.

Despite skepticism from the community, the report was accurate and since then it seems there has been a steady drip-feed of Blizzard staff leaving the company. Many of the names were working on esports related projects and no longer had faith in the direction the company was being steered by its executives.

Following the publication of that report, I was inundated with messages from Blizzard staff and Overwatch League workers who all wanted to expand on what was happening in the company. The message was consistent from all of them: the corporate culture had changed dramatically, the esports divisions were being pushed in a direction staff didn’t want to go, that the executives were out of touch with what the communities wanted, and that the Overwatch League was a rudderless ship careering towards some particularly jagged rocks. 

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OWL stakeholders came forward and they too started to voice their concerns… Next season was “make or break” and the experiment had already proven to be expensive with little to no return. People were starting to lose confidence and they were being kept in the dark about what was happening. Even when questions were answered, two different people would produce two different responses. Many people had fully committed to the vision of the league with both their finances and their life choices and now the dread was starting to set in – and as I would learn, not without reason.

I spent the following weeks interviewing those who had reached out to try and get a clearer picture of their concerns. For reasons that should be obvious, their words shall be presented anonymously but with enough information for the reader to understand why their perspective is relevant.

The mood at Blizzard

It would be an understatement to say that morale within Blizzard is low, my sources have indicated to me. The company has had mostly negative headlines across the board for the past 12 months. This mood was hardly helped by the company laying off hundreds of staff while CEO Bobby Kotick proudly declared on a shareholder call in February 2019 that the company had “record revenues”. 

The following July, insult was added to injury when the company placed advertisements to hire for roles that they had fired people from just a few months later. This has led to speculation that the reason for this is to simply cut expenditure at the expense of expertise by reducing salaries company-wide by bringing in new hires.

ActivsionActivision Blizzard have been laying off and replacing staff for months.

As one Blizzard staff member who works on one of their esports titles told me directly, “Everyone at the company knows exactly what is going on. Anyone with a ‘sweet deal’ is going to be managed out and someone brought in to replace them in the exact same job a few months down the road.”

They added: “People new to the industry will still jump at the chance to work here because of how it looks on a resume. They don’t know what they are getting in to.”

This claim seems to have validity when you look at how the situation at Blizzard’s office in Versailles is being handled. 

With one third of the office being laid off, there is the appearance that Blizzard are trying to get around French trade union rules by offering a chance to relocate to the Irish office in Cork. Seeing as such a relocation would be incredibly impractical for staff, few want to take that deal and sources believe Blizzard hope that this is cause enough to justify the terminations.

This, coupled with the unions saying that despite sustained record financial success, Blizzard are only willing to offer the legal minimum for severance pay, makes it look like a cost-cutting exercise.

Interestingly enough, this aligns with what I was told months earlier when Blizzard announced that they would no longer be financially supporting Heroes of The Storm as an esport. Someone who worked in the Versailles office told me they had been informed that “one in three” people were going to lose their jobs but they couldn’t tell them who it would be at that time. You can imagine the kind of reactions this generated among staff who were uncertain about whether or not they would be employed the following month.

Staff in the US have said to me off the record that they believe similar practices are being applied to their departments. Publicly, there have been some complaints that seem to verify this. The turmoil within the company has led to staff often taking on multiple roles, working across projects and being expected to plug the sudden gaps from the diminished workforce. Those who remain find themselves hardly rewarded for their efforts.

“Nate is absolutely getting out at the right time,” another Blizzard staff member told me.  “Activision have slashed performance bonuses and benefits and there’s no way they would be willing to compete with the kind of money Epic Games is willing to spend. Simply put, they think everyone is replaceable with maybe the exception of Bobby.”

Money talks

How does this relate to the Overwatch League specifically? Following the collapse of Heroes of The Storm’s esports division, which we will cover in more detail shortly, sources have indicated that extra pressure was applied internally to make Overwatch a success. Success in Activision Blizzard terms seems to mean only one thing – profit. 

So the league was purposefully aimed at outsiders, sports companies and VC firms, who had vast sums of money to gamble with. It was presented as a way to get into the world of esports with a reliable corporate partner. And while they didn’t attract as many of these investors as they hoped, they did get enough to go ahead with a plan that was seemingly similar to previous failures but just with a bigger budget.

Activision BlizzardBlizzard’s Overwatch League commanded a $45 million price tag per year for TV broadcasting rights in its first two seasons.

With the stakes now so high, sources have told me that this meant the squeeze was applied to Blizzard staff working on Overwatch. It needed huge sponsors, huge viewership and a flawless broadcast. Where previous esports projects had allowed their middle-tier executives a certain degree of autonomy, now this was a concern for staff at the very highest level. As a result, decisions were challenged, strategies were second-guessed and employees were pushed to their limits for very little praise and reward. Worst of all, when suggestions were made on how to do things more in line with community expectations these were almost always shot down. There was a plan that absolutely had to be adhered to and it all revolved around the third season. This, more than anything, created angst among the employees who worked on Overwatch. 

Those who had been around esports a while could see the glaring flaws and were powerless to change the minds of those who were calling the shots. As one individual who had worked with Activision Blizzard on their operations told me, “I am tired of Ivy League dipshits that don’t care about our space fucking this shit up.”

Internal upset at Blizzard

In my June 1 report, my sources mentioned Pete Vlastelica specifically as one of the executives that were causing the internal upset. “People are really getting tired of working for Pete Vlastelica,” a source said. “The focus has become commercializing the esports titles instead of making good programs for the community. Many people internally are laying that on Pete, and it has crushed morale among the Call of Duty and Overwatch teams especially.”

As the CEO of Activision Blizzard Esports Leagues, his name came up a lot and mostly in negative terms. The former Executive Vice President of FOX Sports has reputedly been incredibly demanding and difficult, something that even those defending him can’t dispute.

“My opinion generally is that Pete is pretty good at his job and good for the league.” said one former employee. “He’s just maybe not the most likable or popular person.”

Activison BlizzardPete Vlastelica is the CEO of Activision Blizzard Esports and the OWL Commissioner.

They added: “He is totally not an esports guy and because of that his opinions on a lot of things are different. I tended to believe that those opinions would help bring more traditional sports broadcasting production values and mindsets to esports, which will ultimately be good for viewership and advertising – although maybe not initially good for competitive integrity and what have you. That’s a different debate. If the goal is to increase viewership and generate revenue, Pete is your guy.”

For the most part, however, this is an opinion that’s not widely shared. Multiple staff and broadcast talent had attempted to influence the direction that the league and its content were heading in only to find themselves not only ignored but told in no uncertain terms that their input was not welcome.

Feedback shunned by executives

There were maybe a handful of people on the project that could act as a buffer between the executives and those working overtime in the Overwatch trenches. Nate Nanzer was one such person, a man who often found himself repeatedly being the public face of decisions he didn’t necessarily endorse or even play a part in.

“Each time someone told the execs what we needed to improve on we were told to keep it to ourselves,” a member of the broadcast talent team told me. “Then Nate would go and fight to make them listen. That was the process. It was exhausting for Nate but it was the only way any of us could influence the broadcast.”

Another member of the broadcast talent added: “It’s telling that there is no endemic esports person at the director level or above in the entirety of Activision Blizzard esports.” 

Robert Paul for Blizzard EntertainmentRobert Paul for Blizzard Entertainment
Chris Puckett is another high profile departure from the Overwatch League.

Despite Nate holding the title of commissioner, I was told by multiple Blizzard staff members past and present that he had little involvement in the day-to-day disciplinary operations of the league. Instead, he found himself with a much broader role. Outside of the league, it was mostly his job to sell ideas and concepts to investors, teams, players, and the public. Internally, he was known as someone who always raised staff concerns, trying to frame them in a way the ‘suits’ would understand. Even when he lost these battles the staff appreciated the effort.

As such, the departure of Nanzer really was like lighting the fuse connected to the powderkeg of staff dissatisfaction. An advocate for his team and someone who understood that maybe some of his senior executives didn’t know best, he was the stanchion that prevented the weight of corporate interference coming down upon the league’s vision. With him gone and it clear that no one from an endemic esports background would be promoted into the void he left, many started looking for the exit.

Overwatch League departures

At the time of writing this final draft, it has been announced that marquee talent signing Christopher ‘Montecristo’ Mykles will no longer be part of the league. The same is true of award-winning host Chris Puckett.

The expectation is that many more are going to follow, leaving the league not just with a diminished crew for 2020, but also without many of the talent that have huge followings, a matter that raises serious questions about the impact this will have on an already dwindling viewership.

“Nate was very well-liked internally,” one former Blizzard staff member summarized. “After Nate unexpectedly jumped ship, morale for people working on OWL teams has gone down, to the point where I can tell you that after this year [2019], people are reconsidering working in esports at all… The pressure from Activision currently to just make money is insanely high.”

Which brings us to the next crucial question. Where is all the money this league is supposedly making?