The E-Sports dream bubble is bursting

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E-Sports were first brought to my attention as a bizarre offshoot of the slowly bubbling world of gaming that didn't even feel real when I first heard about it. A collection of people who play games really well being flown around the world to play those same games on stage in-front of crowds of thousands where they call themselves athletes? It kind of felt like some- elaborate long con. Of course, at the time I was used to the common conception of athlete being someone who pushed themselves to the physical limit of their body in a specific field, not... not what E-Sports is doing and has done. It felt a little inappropriate to compare the two, and it still does today. And the distinction between traditional sports and Esports is only becoming more clear as the illusion of the E-Sports bubble is beginning to burst in a very ugly fashion.

You see, what is one of the most commonly accepted factors about traditional international sports teams? That they have a lot of money at their disposal, of course. Money to travel around the world, money to enter competitions, money to pay their talent a salary to keep fit and trained for the next match or event- and this is usually money that appears to be healthy sourced and kept up to date. And this always felt like a pretty safe assumption to make given how long these sports have been going on, the size of their regular events and seasons and the lavish, seemingly stable, lives that their top athletes live. In many parts of the world, striking it big in sports is the only feasible way to escape the dire living conditions you are subjected to and make something of yourself. Why wouldn't the same be true about ESports?

Well, in short- because E-Sports is more held up by spit and sandpaper then the iron-wrought bonds of the sports industry. For all of it's life Electronic Sports has aped it's more active cousin, making plays at stars with lavish over-excessive lifestyles, hosting grand arena events, spending ungodly amounts of money in marketing such that the everyday man was more likely to get excited and pay attention. But there does seem to be a barrier to entry with a lot of E-Sports games- because gaming tastes seem to be pretty temperamental. We haven't yet reached that stage where families of people become inducted from an early age to all be rapid fans of League of Legends, such that they plan and watch it passionately in all their free time. We don't really have any societally accepted 'cult of E-Sports' like there are 'Cults of Football'. So E-Sports was never in that one-to-one position it always wanted to be.

But what's the one thing worse than lacking the perception you want to have on the world? Lacking the funds that you play at having. Which isn't all true; of course insane amounts of money had existed around E-Sports and was being shot about as though out of a giant cannon onto the world around- but it was never earned funds. Rather the E-Sports industry was being thrust aloft on the back of venture capitalists and funding groups that saw themselves as getting on the groundfloor of the next international sporting sensation. They were opportunists worming their way into the opportunity of a lifetime, sinking in hundreds of millions for an inevitable return of hundreds of billions once the E-Sports scene was every bit as big as Basketball or Football. Afterall, games are the most profitable form of entertainment- so they would obviously manage to reach the same accolade in spectator sports, right? 

No! Of course not! Why would you even- sports and TV have been bunk buddies since the inception of broadcasting, from the radio to televised broadcasts, we've been watching people play every kind of outdoor activity from the safety of the indoors since before the time of most of our grandparents. Why is that important? Because TV, and the advertising world which shapes itself to the standards of TV, feel safe with spending their money on Sports; and if you watch any popular sporting even you'll know that it's the advertisers keeping the lights on. Concessions, merchandise, outside funding is great for buying those Lamborghini's for the top percentile, but the daily wages are paid for in the blood of the advertising agencies. And gaming has never managed to make itself advertiser friendly.

It really dates back to the divide between 'new' and 'old' forms of media, terms that have pretty much lost all meaning in the several decades since gaming's inception. Old media found the threat of rising new media as an encroachment on their territory, thus began the scapegoating campaign that alienated a whole generation to gaming. Unruly children? Must be the games. People aren't attending church as often as they once did? Must be because they're home playing games. A horrific gun-related tragedy has taken the lives of people? Must be all that time with a controller in his hand, training him how to kill! And to this day the shadow of that perception still remains, such that violent video games are judged more harshly than films with comparable levels of violence.

And guess what, all those popular E-sports games: LOL, DOTA, COD, Valorant; they're all pretty violent given their focus on competition against others. Of course, not even Call of Duty is violent and bloody enough to induce 'poor taste' censors anymore, but that doesn't matter. Unless they can find some sort of way to generate significant income and revenue without mainstream advertisers, preferably by becoming mainstream, the E-Sports industry doesn't really have that much of a future outside of it's gaming niche. Most every big E-Sports team that was once the belle of the ball five years ago is scaling back significantly or teetering on the verge of bankruptcy. It's getting to the point where FaZe may have to call up that favour which enigmatic billionaire Bruce Wayne owes them after they went on that adventure for his caped friend.

As if to underline how dire the situation is: Snoop Dogg is leaving FaZe. That's right, he's bailing from his position on the board and as part of the roster effectively immediately, forever scarring the team he contributed so much to- what do you mean you didn't know Snoop was a part of FaZe? Sure he was, for about a year. Which goes to show you how dire things are. If old world celebrities are smelling the roses and leaving you behind in the dust, you've way too far gone with the wind. At this point, following this trajectory, by 2024 the single best E-Sports team in the world, by default of being the only remaining team, will be Moist E-Sports. And you know what? That's a world I don't even feel bad about approaching.

Checking the pulse of 2023 E-Sports

 Hit me with your best shot

E-Sports is quite the impressive conceptual when you break it down. Because within the grand scheme of the prospective of the game's industry to an outside audience, there would seem no better an oxymoron than Video games and sports. Of course we're talking stereotypes, but the kind which seem to have be shattered in the most flamboyant fashion. Not only has E-Sports flourished as an accepted concept in recent years, but we've seen actual stadiums of spectator's show up to watch somehow super star E-Sports teams duke it out in their chosen games. It's actually quite inspiring to see the heights to which a single aspect of the games industry can soar within the space of hardly any time whatsoever. Gaming truly is a rapidly blossoming flower.

And all this I of course say from the prospective of an outsider. My furthest interaction with the world of E-Sports comes once a year every game awards when I make a wild stab-in-the-dark as to who will win the various categories based on absolutely no personal research whatsoever. A tradition for which I score shockingly well, considering how scatter brain it is. I am, however, not a total ignoramus when it comes to the huge and community driven world of the E-Sporting. I would be remiss in my duties not to pay an odd thought to the world of the sporters every now and then, which is how I also hear about some of the misfortunes that run across this world. The Smash Bros. community controversy, the dwindling of certain territories, the shut-up of Echo VR and, worst of all, the induction of FaZE clan into the official Batman lore thanks to a crossover comic which is real and you can look up right now. (Spoilers: it's pretty terrible. The art is okay.)

As with any sub-division of the gaming conglomerate we call an industry, the world of E-Sports is forever shifting and changing what it needs to be in order to survive. I'm sure many still fondly remember the underground days where passionate individuals played tournament games in tiny backrooms that were recorded on hand cameras, and maybe some even further back remember the days of actual developer set-up competitions in local arcade spots. Surely it was a different world then compared to today with the slick-back and corporate organisation of trained E-Athletes who assemble entire teams of obsessives that train together every day of the month. Athletes who sometimes have to go even further than their outside counterparts by being somewhat entertaining personalities to, as a lot of them double up as streamers during their free time. And, of course, I bet the competitors of yesteryear would never foresee a world where E-Sports champions actually made money. 

You don't actually have to go back too far to find a time where E-Sports players competed simply for bragging rights of a theoretical crown. The Smash Bros competitive scene was pretty much built on that sort of self-driven passion and considering how they've struggled to get a decent prize pool going even to this day thanks to the machinations of Nintendo, it's likely that personal pride is going to continue to play a role in competitor's psyche for years to come. But around them you can find much larger professional circuits with seriously eye-bulging cash prizes. In 2021 the various Overwatch competitions combined added up to over $4 million dollars in their prize pool and for 2022 LoL World Championship alone apparently boasted a prize pool upwards of $2,000,000. With the higher potential reward of course comes an increase in the calibre of competitors which, somewhere along the line, means that running an E-Sports team is going to become an expensive endeavour in itself.

Unlike other forms of sports there really isn't a direct form of payment for an E-Sports team beyond winnings and merch sales; events are typically free to watch and there's no central league to handle the distribution of events, broadcasting rights and ticket sales. Just as with gaming itself the very economics of the E-Sports world are still in their infancy, unfortunately the actual realisation of this did not come easy to the many who flocked to the scene in the early days. Many who don't even follow the sport will know of the large and storied titans who rule the space, FaZe, 100 Theives, OpTIC, and naturally just assume them to be as stable and secure as the pillars of industry around them- but nothing could be further from the truth. In fact many of these stables are starting to drop in market value recently as the bubble of confidence around E-Sports teams is starting to wobble and burst.

You see, as what seems to be the culture around tech startups, venture capitalists and self-proclaimed 'innovator's clamoured to fund up these budding teams in their early stages, fuelled on by the mantra of Silicon Valley: Infinite growth, revenue someday. It's very much an 'all or nothing' strategy best defined by a manner of quantity over dull quality; be the key investor behind enough startups and one of them is going to come through and make you a Billionaire. What I'm trying to say is that recent years have made it clear that very few purse-string holders for these Teams had clear laid out business plans heading towards profitability, and that might be how we've reached the status quo right now where most teams expend more on sustaining their talent than they make in all their elsewise endeavours.

For some the cost itself is negligible for the love of the sport, and there's a real beauty to that kind of sacrificial love. (I'm sure M.Night.Shamalyan would tear up just hearing about it.) I specifically know that Moist E-Sports, founded by streamer Charles White, has never seen profitability and that Charlie pays for the entire team out of his pocket simply because he enjoys having some sort of tactile contribution to the competitive scenes he loves to consume from. But that really is the outlier in this sort of industry. E-Sports as a whole is worth actual billions, and the sort of heads those numbers are going to turn won't all be games or even sports lovers. That potential attracts those that seek profits, and given that the entire E-Sports industry seems stubbornly affixed to not generating sustainable profits for it's talents- there is perhaps a mass crash in the market that is only just starting to bubble up.

Of course the natural response would be to say "I see the problem, what do we start doing for solutions?" But to be honest I don't think anyone really has such a blueprint yet, even conceptually. The culture around E-Sports is so intrinsically tied to freely viewable online events, it's hard to turn that around and expect not to damage the still-growing viewer base. Merch sales are a big winner, Prize funds can be great short-term boosts, some games put in revenue share measures in the form of 'support skins' or even recently one game sold off a 'seasonal split' to Moist's E-Sports team. But all around these are just errant planks of rotted plyboard patching up a cannonball size hole that's slowly starting to sink the whole galley of this industry. All we can say for certain is that something has got to give, but whether it's going to happen in the Nth hour, or years from now in the phoenix-style ash-renewal of the crashed industry- well, that's what we're going to have to see.