The optimization process and recommendations:

1. Avoid Selecting Unnecessary Columns (query line: 5): Avoid selecting all columns with the '*' wildcard, unless you intend to use them all. Selecting redundant columns may result in unnecessary performance degradation.
2. Use Numeric Column Types For Numeric Values (query line: 20): Referencing a numeric value (e.g. 1011) as a string in a WHERE clause might result in poor performance. Possible impacts of storing numbers as varchars: more space will be used, you won't be able to perform arithmetic operations, the data won't be self-validated, aggregation functions like SUM won't work, the output may sort incorrectly and more. If the column is numeric, remove the quotes from the constant value, to make sure a numeric comparison is done.
3. Use Numeric Column Types For Numeric Values (query line: 29): Referencing a numeric value (e.g. 1011) as a string in a WHERE clause might result in poor performance. Possible impacts of storing numbers as varchars: more space will be used, you won't be able to perform arithmetic operations, the data won't be self-validated, aggregation functions like SUM won't work, the output may sort incorrectly and more. If the column is numeric, remove the quotes from the constant value, to make sure a numeric comparison is done.

The optimized query:

SELECT
        ROUND(AVG(attendance)),
        games.competition,
        games.team1,
        countries.* 
    FROM
        games 
    LEFT JOIN
        (
            teams 
        INNER JOIN
            countries 
                ON (
                    countries.iso3 = teams.country
                ) 
        LEFT JOIN
            altnames 
                ON (
                    altnames.entityType = 'team' 
                    AND altnames.season = '1011' 
                    AND altnames.entityId = teams.longName
                )
            ) 
                ON (
                    altnames.altValue = games.team1 
                    OR teams.longName = games.team1
                ) 
        WHERE
            games.season = '1011' 
        GROUP BY
            games.competition,
            games.team1 
        HAVING
            AVG(attendance) >= 500 
        ORDER BY
            AVG(attendance) DESC