Activision, the popular video game publisher, has recently expressed concerns about the future of two of its highly popular esports leagues: the Call of Duty League and Overwatch League. In a recent filing with the U.S. Securities and Exchange Commission (SEC), Activision acknowledged that the collaborative arrangements for its professional esports leagues are facing significant challenges that are having a negative impact on the leagues' operations and long-term sustainability under the current business model.

Activision Plans to Increase Revenues Amid Concerns Over Esports Leagues

Activision's admission of concerns regarding its two popular esports leagues is worrying for both investors and esports enthusiasts. The company's valuable intellectual properties, such as CoD, Diablo, Overwatch, and Warcraft, are expected to continue generating a significant portion of its revenues and profits in the near future. As such, the performance of Activision could be substantially impacted by its ability to sustain these franchises and compete with other titles in the industry.

To increase its revenues, Activision is exploring additional ways to expand its franchises and games. One such way is by increasing player engagement with seasonal content in live-service games like CoD. The company has expressed its commitment to resolving these difficulties, but it may come with significant expenses, and there is no guarantee of success.

In addition, Activision has admitted to facing challenges in both retaining existing talent and attracting new talent for game development. Although there have been positive trends in these areas, these challenges could impact the company's ability to maintain its franchises and compete effectively in the industry.

Activision's consolidated net revenues in 2022 were largely driven by three games - CoD, Warcraft, and Candy Crush - which collectively contributed 79% of the revenue. The company's admission of concerns about the future of the Call of Duty League and Overwatch League highlights the volatility of the esports industry and the challenges that companies face in maintaining successful leagues.