Is the esports industry slowly dying? It has been just 2 months in 2023 but the esports industry has seen many setbacks already. Many esports organizations have laid off staff and players to stay afloat. Let us take a look at why the esports scene is facing such tough times in 2023.
This downward trend started with FTX filing for bankruptcy in November 2022. It resulted in the suspension of the $210 million deal of the crypto trading platform with TSM, one of America’s largest esports groups. Following this, many other esports organizations which had made deals with other crypto firms earlier also started moving away from them.
Is the esports industry slowly dying? CHECK DETAILS
It resulted in a steep fall in investment in the esports scene, making it difficult for gaming teams and esports organizations to operate. When it comes to investing in the esports industry, very few companies (which are not associated with gaming) wholeheartedly venture into it.
Esports in 2023:@TheGuard dead@eUnited dead@TorrentHQ dead@FaZeClan 20% staff laid off, stock down 60%@100Thieves 15% staff laid off@OpTic staff cuts@Immortals staff cuts@TeamLiquid staff cuts@nerdstreet financial trouble and 25% staff cut@riotgames 46 jobs cut
— Keeg (@KeegMGMT) February 23, 2023
Why do esports teams struggle to make money?
It happens because esports organizations do not have any fixed product to work with. The popularity of any esports organization depends upon the performance of its team in international competition. It is hard to be consistent in any esports game and once an esports team gets defeated, fans also quickly move away from them.
There are very few avenues for esports teams to make money. They need to either win competitions, bag sponsorship/partnership deals or allow their players to stream online apart from playing professionally so as to make money from advertisements.
Moreover, there are too many games getting released every year and it is hard for any esports franchise to continuously compete with an actively growing competition. Only a few games like League of Legends, DOTA 2, VALORANT, CS: GO have successfully cultivated an audience that allows them to run an international circuit with separate competitions for different regions.
How bad does the esports industry look in 2023?
Coming into the new year, the esports industry has not been performing well.
- Popular esports org FaZe Clan had gone public on the American Stock Exchange back in August 2022. The IPO had started at a price of $9.88 a share. The prices of its shares have declined more than 92% and are valued at only $0.6799 a share currently. It has resulted in FaZe Clan laying off 20% of its staff.
- eUnited had a successful PUBG team that had won the ESL Major two times and ranked 4th in the PGC 2022 competition. But unfortunately, the roster was let go of by the organization.
- Torrent was another esports organization that participated in Apex Legends and Rocket League competitive tournaments. It was shut down on Feb. 8.
Our statement regarding the future of Torrent: pic.twitter.com/8G48Jemhp2
— Torrent (@TorrentHQ) February 8, 2023
Other popular esports organizations like 100 Thieves, Team Liquid, OpTic Gaming, and Immortals have also laid off a percentage of their workforce this year.
Electronic Arts known for its highly successful FIFA video game series, announced that they will be shutting down their Apex Legends Mobile game and canceling the Battlefield Mobile release. Even Riot Games, the developer of massive games like League of Legends and VALORANT, has let go of some of its staff this year.
Bad news for Mobile Gaming Community.
EA Shut Down Battlefield Mobile and Apex Legends Mobile. Due to low response.#apexlegendsmobile #battlefieldmobile #eagames #GamingNews #gamenews #rip #games #TheLastOfUs #gamer #MobileGame #ApexLegends pic.twitter.com/uFIFfyeNgl
— Shield Media (@shieldmedia_) February 1, 2023
The latest esports organization which let go of a large number of people is The Guard. Their VALORANT roster has been highly successful in North America. Apart from retaining this esports team, the organization has shut down its design, social media, management, and talent departments.
The Guard had several employees move to Los Angeles weeks before firing them pic.twitter.com/c2fnqOoz61
— Dexerto (@Dexerto) February 23, 2023
While the future of the esports industry is not all rainbows and sunshine, there is still a lot of potential in it. Let us see how it pans out in the coming months and years.
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Read More– Why Has Apex Legends Become So Popular?