Updated 2 years ago
At least two organizations in America‘s most prominent league for professional video game players are selling their teams, underscoring the industry’s uncertain future.
Link to New York Times article
Milennials and Gen Z as generations have done many laudable things, such as popularizing the term “funemployment,” but E-sports will be remembered as That Time South Korean Internet Cafe Culture Came to America, and became just another bubble built on youthful ignorance and stupidity, built on the easy-money celebrity-driven late 2010s, the same irrational exuberance era that saw Dogecoin briefly outvalue Ford, and Gamestop, AMC, and Bed Bath & Beyond (!!!) stonks explode.
This was the peak era for Incels in mom’s basement.
Video games are not sports! GTFO! This should never have been a thing. It’s bad enough to play a lot of video games (I’ve been there, done that), but to actually watch someone else playing them, and idolizing them and sending them money, is being a double loser. And a lot of these sad sacks bought NFTs. So triple. People like these keep lotteries going, Nigeria afloat, and populists elected.
Reasons why Esports are doomed
- The only two proven revenue streams for esports are merch and sponsorships. OWL tried a ticket based league but it didn’t work.
- Esports are terrible sponsors from an advertising point of view because the audience is very heterogeneous (hearthstone fans are very different from fighting game fans which are very different from fps fans), it’s near impossible to create camaraderie with all of the East Asian players that barely speak English, the actual org getting all of sponsors is so far removed from the players people care about that they’re not going to spend money just because the brand says they have this cool product, and the publishers don’t allow the orgs to do marketing deals within the game itself (think discount codes and skins).
- Nobody cares about bad teams, but the players who actually understand where their money comes from and are willing to grind social media content end up being lower skilled than the players who just silently grind 60 hour weeks. The players who do both are just unicorns making it nearly impossible to use your results as a means to increase visibility effectively.
- The combo of this is that esports just doesn’t make money if your name is not 100 Thieves.
- Operating costs are really high across the board. Players make stupid amounts of money for how much they actually bring in (especially in League of Legends, but even OWL’s minimum is pretty pricey for what it is), training facilities aren’t cheap, travel is expensive, coaches and translators need to exist, and it’s obviously an advertising business with all the expenses an advertising business has.
- Publishers have ensured that these orgs will never be profitable by handicapping their revenue streams, taking all of the league wide sponsorship money even though it wouldn’t exist without the teams, and by charging large fees to even begin playing in the league.
- The VCs involved with esports are not the VCs that should have been involved in esports. They’re tech guys expecting blitz scaling into ridiculous ROI after you trim fat circlejerking themselves into valuations an order of magnitude+ higher than the actual businesses warrant. What esports needed is a VC who is willing to invest in a company whose ceiling is ~$50 million market cap. FaZe was his poster child here where they IPOed at $725 million while actually being a ~$35 million company.
- General nostalgia talk that I personally didn’t buy about how esports just sucks now. Especially because he seems to think that early LCS wasn’t heavily sanitized?
- A discussion on how the publishers probably leaned too hard into professionalism.
I met a traveller from an antique land,
Who said—“Two vast and trunkless legs of stone
Stand in the desert. . . . Near them, on the sand,
Half sunk a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal, these words appear:
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away.
-Ozymandias, Percy Bysshe Shelley
