Activision Blizzard’s operation of the Call of Duty League is now the topic of a lawsuit introduced by two professional gamers who allege the esports league is an unlawful monopoly, one that stops competitors and forces gamers and groups to conform to “extortionate” monetary phrases.
The 2 gamers are recognized names in skilled Call of Duty circles. Optic Gaming president Hector “H3CZ” Rodriguez and professional participant Seth “Scump” Abner, the second winningest participant within the recreation’s historical past, are in search of $680 million in damages from Activision Blizzard. The lawsuit alleges Rodriguez, who ran the Optic Gaming Call of Duty group for years, was successfully pressured right into a “financially devastating” partnership with billionaire traders as a way to fulfill Activision’s calls for and acquire one of many Call of Duty League’s coveted 12 group spots.
As famous by the lawsuit not too long ago filed in federal court docket, previous to the formation of the Activision-owned Call of Duty League in 2019, aggressive Call of Duty tournaments had been operated by a number of organizations, together with GameStop and Main League Gaming. That modified when Activision itself acquired Main League Gaming and later fashioned the Call of Duty League, successfully shutting down all different skilled Call of Duty esport leagues and tournaments aside from those operated by Activision itself.
Activision has since, the lawsuit alleges, used its Call of Duty esports monopoly “as a digital nuclear weapon.” Although the league is impressed by skilled sports activities leagues just like the NFL or NBA, there isn’t any collective bargaining settlement between group house owners and gamers. Not like skilled sports activities leagues, Activision owns the sport itself, and thus can prohibit gamers from incomes income from exterior sources Activision disapproves of.
Groups had been required to pay a $27.5 million entry price to take part within the league. As well as, Activision receives 50% of income from ticket gross sales, sponsorships, and different income streams. Gamers are barred from commercializing Call of Duty gameplay on locations like Twitch or YouTube as properly, and required to cede doubtlessly profitable model sponsorship offers to Activision. The lawsuit alleges gamers and groups had been both pressured to just accept “draconian anti-competitive phrases that had been favorable just for Activision and its monopoly,” or “exit the market completely.”
“Activision knew that buying and sustaining monopoly energy over this market would allow Activision to take an extortionate share of this income, leaving the remaining desk scraps (and all of the monetary danger) to the gamers and groups on whose backs Activision would earn that income,” the lawsuit states.
Earlier this 12 months, Activision Blizzard’s esports division was topic to large layoffs, throwing the way forward for the league into query. Activision Blizzard’s Overwatch League, on which the Call of Duty League was modeled, has since ceased to exist, and far of the esports division accountable for working the leagues was laid off earlier this 12 months. That reality has added “insult to vital harm,” in keeping with the lawsuit, stating the corporate has “run the Activision CoD League into the bottom.”
In an announcement to Bloomberg, an Activision Blizzard spokesperson mentioned the lawsuit has “no foundation in reality or in regulation” and that it’ll strongly defend in opposition to the claims.
“We’re disillusioned that these members of the esports group would carry this go well with which is disruptive to group house owners, gamers, followers, and companions who’ve invested a lot time and power into the Call of Duty League’s success,” the spokesperson mentioned.
Activision Blizzard settled a civil antitrust lawsuit with the US Division of Justice final 12 months over issues that the Overwatch and Call of Duty League violated antitrust regulation by capping participant salaries within the type of a “aggressive stability tax,” one thing Activision faraway from the leagues in 2021.