It is no secret that many organizations involved in eSports are in a bit of a struggle due to numerous reasons. These reasons vary from different regulatory rules and laws to the constantly increasing promotional and operational costs. This has been going on for a few years.
The Story Behind the eSports Bubble Rumors
Well, there are some reasons that could give you food for thought on this matter. The players earn a lot of money, and their paychecks are getting fatter by the minute. The same goes for the investments made in the eSports field. We are talking about tens of millions of dollars here.
The value of the best teams also skyrocketed in the past few years. All of this means only one thing – the gaming industry is going strong! The impressive results attract more and more investors willing to put in huge sacks of money into this business. It sounds like it makes sense, but the reality is a bit different.
Like we already mentioned, the majority of the organizations operating in eSports are still not making any profit whatsoever. Their influence is bigger than ever and despite the fact that their players and teams have become widely popular. However, all of this does not change the fact that their income is not what it should be, given the factors we just described. Such a stunning inconsistency is bound to start a rumor like the one we are analyzing today, and there is a whole lot of statistical information to be taken into account, too.
The Staggering Numbers
Here is one example of the huge money involved in the eSports world. A franchisee willing to join the OWL (which stands for The Overwatch League) has to pay a fee measuring between 30 and 60 million U.S. dollars! Meanwhile, the viewership is not increasing; in fact, fewer people are showing interest according to this year’s statistics. Call of Duty League also requires a mind-blowing investment of $25 million as well, despite the fact that the title is placed on the 12th spot overall among the most popular titles on Twitch.
Here is another example of the amount of investments in the eSports world. The Comcast Corp. decided to build an eSports arena in Philadelphia worth a whopping $50 million! The expected amount of local investments in eSports is huge, but some say that it is unclear whether investors will profit from that.
The Lifecycle
Some specialists see a bright future ahead of the industry. They guess that this year’s total revenue will pass the billion-dollar mark. The thing is, some of the most popular titles today may not have the same popularity in the years to come. There is only one main factor for a game to be popular, and that is to have enough fans and gamers playing it.
As time goes by, games get less interesting because their gameplay, features, and graphics become outdated. Naturally, they are eventually replaced by new and more attractive titles. Some titles, however, managed to escape that fate. One of the best examples is Counter-Strike. The game has been around for nearly two decades, but none of the other titles will have the same fate for sure.
The Good News
The opinions on the supposed eSports bubble are divided, but some say this is a plausible scenario. Those who think there is some truth to it also mention the failed attempt at creating the Championship Gaming Series more than a decade ago – it was supposed to be an eSports league, but the project was abandoned because the people behind it realized they were not going to see a profit in the foreseeable future.
Maybe such an example is not the most accurate one, as there are a lot of differences in the field today. The investment rate is much, much higher, and all the professionals venture capitalists involved in this business are much more experienced today. One other key point is the presence of a lot more game titles compared to 10 years ago. Even if some of the games become obsolete, other titles would immediately take their place.
Betting on eSports’ Future
The eSports world is stronger and more colorful than ever before and investors are pouring more money into the industry than ever before! On top of that, game companies are stepping on the gas with both feet! Everyone involved in this exciting field hopes that eSports becomes the next big thing with a scale similar to NBA, for example.
However, the viewership needs to grow, and all the organizations involved need to think about new ways of creating value if they want to see an increase in their revenue. This is nothing but placing an insanely huge bet on the near future, and we are about to see how it will pay off in the next decade.
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