Overwatch 2: A Business Model Revamp Rather Than a Traditional Sequel

At the end of this month, Blizzard will discontinue the sale of loot boxes for Overwatch, paving the way for the launch of Overwatch 2 and a significant overhaul of the game's business model. Although the original Overwatch will be replaced by its sequel, it's not uncommon for developers to phase out certain monetization aspects of their live service games before shutting them down. However, in the case of Overwatch, loot box items will still be usable in Overwatch 2, which raises questions about the reasoning behind this decision. One possible explanation is that Blizzard wants to avoid a consumer backlash and negative attention from regulators, as players who purchase items that become available through regular play shortly after may feel ripped off. More importantly, shutting down the loot box monetization ahead of the sequel's launch sends a clear message to the existing player base, many of whom have been critical of the loot box system from the start. This move is part of a broader messaging campaign that Blizzard is carefully constructing around the new game. As one of the biggest remaining launches of the year, Overwatch 2 is well-positioned to attract a lot of attention and new players, thanks in part to its free download model. Nevertheless, the game's unusual nature as a sequel-cum-relaunch presents a messaging challenge for Blizzard. Unlike traditional sequels, Overwatch 2 is not a continuation of the original game but rather a relaunch of the Overwatch service, designed to rectify strategic errors made with the first game. This is a tricky undertaking, as it involves transitioning between business models while the game remains in live service, which is typically only done when a game is struggling. The first Overwatch was a pay-up-front game, whereas the sequel will be free to download, leading to concerns about how to keep existing players happy and attract new consumers. Blizzard must reassure players that the new business model is an attempt to update the game rather than rescue it. The truth is on Blizzard's side, as Overwatch has achieved significant sales and engagement numbers since its launch. However, the gaming landscape has changed, with games like Fortnite redefining the business model meta. Fortnite's season pass model has become the dominant approach, offering advantages such as cross-platform play, lower barriers to entry, and avoidance of the 'worst of all worlds' trap that Overwatch fell into. By dropping the paid loot box system ahead of the launch, Blizzard sends a clear message that Overwatch 2 will not feature this system, making it a clever marketing move. The new game will essentially be an overhauled Overwatch, in line with the existing season pass meta for online and live-service shooters. This meta encompasses two different business models: the traditional season pass as a discounted pre-purchase plan for future DLC and the time-limited access token to gameplay modes, item rewards, and challenges. The latter is essentially a subscription model in disguise, with companies charging players for game time, either through a monthly subscription or game time card. Games using these season passes often pair them with additional monetization through direct sales of cosmetic items. From the perspective of games appealing to a broad audience, including teenagers and children, this is a positive development, as it limits the amount players can spend and reflects the industry's shift away from relying on 'whales' or high-rollers. The 'meta' will continue to evolve, with room for innovation in live service game monetization. The season pass model is not perfect, and future innovations may address issues such as pushing out casual players who don't feel confident about engaging enough to get their money's worth.