Is Esport doomed?
If video game competitions started from their inception, then international tournaments began in the 2000s. When the concept of Esport appeared, the crisis of 2008 marked the first fall of investors, and therefore of sports. If the car is now back up and running with a vengeance, perhaps Esport, however, is running to lose.
This is the observation of journalist Cecilia D'Anastasio, who works for Kotaku. She has just published a lengthy study on the underside of eSports and its disturbing excesses. If we exclude the famous question "Is it really a sport?" ” seems to be going well for this recent discipline. Proof of this is that in the mid-2000s, an eSports championship brought the winner $1,000. Today it is calculated in tens of millions of dollars. Last April, CNBC even claimed that League of Legends drew more viewers than the Super Bowl.
According to several of Anastasio's sources, the problem is that the numbers used are potentially wrong. On the front line, different counting organizations have different affiliations. Some are game publishers, while others work for large groups. But first of all, the low reliability of the numbers is a concern. Currently, it is difficult to determine exactly which audience is watching Esport. Some sources even claim that companies inflate their events to attract investors. Therefore, the various estimates are rather speculations based on dubious numbers. Nielsen Media Research (counting TV viewers since its inception) entered the industry in 2017. Popular eSports for betting in 2023 are already listed on this web page.
However, the numbers are there. Here are tens of millions of dollars of investment, there are several hundreds of thousands of salaries. However, again, they should be treated with caution. Investors are pouring in millions hoping to tap into a booming new market. The problem: if we talk about big money, then the revenue is meager. Because this funding is actually an indirect source of money. Despite the $682 million spent last year, player salaries also skyrocketed to $320,000 a year.
If in the 2000s the competition was supported by television, then the appearance of League of Legends in 2011 changed everything. Esports are now mostly taken care of by publishers. Recruitment of teams, organization of matches, up to the rental of large sports grounds for hosting live spectators. If the latter costs seem excessive, you can earn just as much money by selling tickets. Publishers can also count on merchandising, bidding, and especially large companies. The streaming company Twitch has offered itself for 90 million dollars the exclusivity of the Overwatch League for two years. As for advertising and sponsors, they will only bring in $3 million a year.
These revenues, according to several sources, are far from absorbing costs. Jurre Pannekit, an analyst at NewZoo, also claims that “of the 14 Esport teams, the majority are playing at a deficit. Since then, Frank Fields, Corsair's sponsorship manager, has had a fear:
It doesn't make sense to invest so much money in an industry that doesn't produce that much. The sooner we recognize that we are attracting an external audience that doesn't know anything about it, the sooner we can grow in the long run. We will be able to prevent the bubble from bursting.
Bubble". Many Esport players fear this word. The real fear is that the eSports economy is not healthy. Investments that require other investments and an increase in player salaries. While the organizers can no longer pay. Find out why eSports betting could become more popular than traditional sports betting in this post.
Several organizers have already sunk in recent years. Anastasio thus mentions "Circa Esports, Allegiance, Moviestar Esports Channel and Millenium". Is Esport destined to die? Probably not. Or, at any rate, he will be resurrected. As previously stated, the 2008 bankruptcy did not affect this industry. The Internet was destroyed by nothing more than the bursting of the tech bubble in March 2000. True, many sites disappeared, but the entire network was then organized. One source for Anastasio's article explains it in other words:
Let's say the bubble bursts and silver plummets. Will players continue to play? Oh hell yes. Will they continue to seek closure? Oh hell yes. Will people watch? Oh damn yes! If there is a bubble, let it burst and let's get back to a healthier economy and grow it.