Over the last few years we have become accustomed to seeing surprising headlines about the world of eSports. Multi-million dollar signings, competitions with hundreds of thousands or even millions of views, professional players with a status similar to that of rock stars… Everything has pointed, during this time, to the fact that electronic sports were already in a position to start eating the toast of the traditional ones. During these years, the sector has experienced times of wine and roses.
However, this 2022 is not turning out to be especially positive for eSports or, to be more exact, for the economy associated with them. After a period, which we can narrow down especially to the last five years, during which investors have dropped to their knees in the face of the dazzling expectations that were looming, a cocktail of circumstances has given rise to a perfect storm that threatens not the continuity of eSports, but yes to its future being as buoyant as its last years have been.
We are going to see the main reasons why the prospects for investment in eSports for the immediate future point very, very downward. The order in which I list them does not imply that this is their order of importance. In reality, that is an assessment that each one can make, and that will probably yield different results depending on the worldview of each one.
Let’s start by talking about the fact that investors After several years of injecting money at a frenetic pace into eSports, waiting for a return on investment to match, they see that the years go by but it does not come to pass. The operational costs of eSports teams and competitions are formidable in size, but they have not yet come to deliver the return expected by the funds that are funding their operation. Consequently, during this 2022 we have already seen how the volume of investments has decreasedaffecting the operation of teams, companies and competitions.
The reason for this is clear, support for eSports is massive, but this does not translate into monetization at the height. Many expected that eSports clubs could monetize in many of the ways that traditional sports teams and competitions do, but despite not a few attempts in this regard, ticket sales, merchandising and others have an impact much, much lower than desired in the accounts of the sector.
Also advertisers and sponsors They begin to show a certain wear. It is true that, in reality, they are the least affected, since the popularity of eSports continues through the roof (although now we will also talk about this point), but the high costs, at a time when the shadow of the economic recession begins to take away many people’s sleep, are something that many companies, if not all of them, are not willing to face.
And, of course, that is another important point. The word recession it already stars in the vast majority of conversations about the economy and budgets. From investors to advertisers, including organizations of all kinds, they fear a difficult economic scenario for the coming year, and investing in eSports is neither remotely so profitable nor so safe as to be considered a good option in these times. are coming
Audiences: it is true that they continue to be very high, but it is also true that they have already a while in decline, something that is also being noticed, a lot, on platforms like Twitch. The pandemic, with the confinements, triggered the audiences of this type of content and platforms, but since last year, and especially this 2022, the trend is contractionary, which also affects eSports in a very significant way.
Also, unfortunately, a sector that has financially supported that of eSports it has been that of cryptoactives, mainly cryptocurrencies and NFTs. I do not think it is necessary to elaborate on the situation of this sector throughout 2022 and, especially, since the falls of Terra and FTX, added to the crypto winter and, at the last minute, also in the shadow of the regulators on Binance for its possible participation, as a platform, in money laundering operations.
All this does not mean, of course, that eSports are going to disappear, far from it. Rather, it seems that what we are facing is a readjustment after a few years of investments and audiences that broke records every month, probably bloated by expectations that have not been met. Now, of course, we will find the key in the sector’s ability to adapt to these new rules in a period of recession. Those who know how to manage the situation in the most appropriate way will be able to face a future period of growth in the best conditions. However, all those who are unable to adapt to this new reality may never reach the light at the end of the tunnel.
With information from Yahoo! Finance
