Activision Blizzard's latest report reveals its concern regarding the longevity of Call of Duty League

Call of Duty League is a prominent esports event focused on the Call of Duty franchise. However, series developer Activision Blizzard's latest Form 10-Q SEC (Securities and Exchange Commission) submission on May 4 disclosed the company's thoughts on CDL and the Overwatch League. The studio particularly referenced these two events on page 34 in the section Importance of our Franchises.

In the report, Activision says that a substantial amount of its sales came from video games based on its franchises, with three series accounting for 79% of its consolidated net revenues: Call of Duty, Warcraft, and Candy Crush. However, the professional esports leagues CDL and OWL are having a detrimental influence on their operations.

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Activision Blizzard foresees a bleak future for Call of Duty and Overwatch Leagues

The COD developers stated in the SEC filing:

"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. We continue to work to address these challenges, which could result in significant costs, and such efforts may prove unsuccessful."

It appears that CDL and OWL's viewership has been declining recently, which significantly impacted Activision's earnings. Additionally, there have been speculations that the corporation is having trouble with league slots, for which Call of Duty teams have to pay $25 million.

Both CDL and OWL are quite popular, reaching a peak viewership of 439,000 in 2022. However, other titles in the gaming industry — including CS:GO, Dota 2, and League of Legends — garner millions of views during their major tournaments.

The COD developers are working hard to fix all pertinent concerns regarding its competitive events, but certain things are beyond its control and can result in considerable expenses. That said, if CDL and OWL fail to garner desired viewership numbers, all efforts of this studio will be futile.

Some risks that the company is now experiencing include the chance that the proposed merger with Microsoft will not be completed on time, which would have a negative impact on business and stock price, as well as cause issues in employee retention and recruiting, among other things.