Doubts over Overwatch League lead analysts to downgrade Blizzard's financial status

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While the gaming world might be gearing up for the arrival of the Overwatch League, the business world remains sceptical. A lack of faith in Blizzard’s ability to pull off the tournament successfully first-time around has seen financial services firm Cowen downgrade its market rating of Activision Blizzard for the first time in nine years.

The first Overwatch League teams have been named.

The reason for the downgrade is that Cowen’s analysts believe the Overwatch League won’t manage to live up to investor expectations. While this isn’t the first time Activision Blizzard have run tournaments, it’s the first time anyone has tried to build an esport from the ground up, and as a result it’s more likely to be a “learning experience” than an outright success, at least the first time around.

In a note to clients issued yesterday, Cowen analyst Doug Creutz said “the probability of reality failing to meet investor expectations is relatively high.” That’s not quite as bad as it sounds, though. While OWL might not quite live up to the hype in season one, most esports grow quite rapidly in their early years - League of Legends’ first world championship tournament was tiny, with a peak viewership of 210,000. That had grown to nearly 15 million by last year.

With a huge pre-existing community, and the financial weight of Activision behind it (who Cowen predict will do well off the next two Call of Duty games), the Overwatch League will probably take a while to find its feet, but it might be a year or two before it really gets going. With the backing of major esports organisations, and even NFL franchises though, it might be absolutely fine. The Overwatch League will begin with a preseason running from December 6.

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