After years of meteoric growth, esports is headed for decline. Various scenarios are unfolding, necessitating an overhaul in the esports gaming market. For instance, Team SoloMid, a brand intertwined with League of Legends (LoL), is restructuring its operations.
The Guard, a company previously boasting of teams in Overwatch League and Valorant, mysteriously laid off all its staff. Meanwhile, Evil Geniuses has suffered a dent after several sponsors left their brand.
Esports winter is truly upon us. Sponsors are scaling down their marketing budgets, raising concerns among esports teams, with sponsorships forming the bulk of their revenue. Despite the shocks experienced in the esports gaming market, esports betting is still available with various bookmakers.
Popular games to bet on include Dota 2, Overwatch, and LoL. While some games mentioned can be played on mobile, one can also bet on various esports teams through UK betting apps. Even though esports companies might be registering a drop in their finances, the betting scene remains as vibrant as ever.
With money issues bedevilling the esports industry, a polarising suggestion has been raised—pay-per-view (PPV). Erik “DoA” Lonnquist, a veteran esports caster, is one of the crusaders of esports transitioning to a pay-per-view model. It’s no surprise Erik’s remarks were met with chagrin among several fans, but it’s essential to glance at what PPV may look like in the esports sector.
A bone of contention is that forcing fans to make out-of-pocket payments is a lost cause since the young populace drawn to esports has low disposable income. Even though esports events may experience a drastic dip in views with PPV, there’ll still be a loyal fanbase eager to watch the events. It’s tough to argue that players will record zero viewership numbers with the intro of PPV unless maybe bots and ghosts have been the entities watching esports all along!
With dwindling sponsorship money, it isn’t a far-fetched idea to consider PPV to supplement revenues and less viewership. Sponsors aren’t too concerned with esports viewers, which may make a paying viewer more valuable in the long run, even if it means losing a substantial portion of the viewer base. However, why is the idea of PPV hovering around in esports? One possible scenario comes to mind—Riot Games.
LoL, tournaments that Riot Games organise are considered the powerhouse of esports. With the flagship League Championship Series (LCS) staged globally in different countries, Riot Games seemed to have hit the jackpot.
The idea was to have a sustainable American esports league to generate revenue. The 2016 BAMTech broadcasting rights deal was to pump $300 million into the LoL esports teams’ war chest. Unfortunately, the deal didn’t come to fruition, with Riot Games losing several sponsors, such as State Farm and BudLight.
Esports hasn’t reached a level where it can muscle out for a broadcasting deal but can try to replicate UFC’s revenue channel. UFC operates on a pay-per-view model, where an event costs roughly $80. Esports and UFC bear some resemblance in that they’re both rookies in their respective fields.
It’s a fact that UFC commands decent viewership numbers to shift from its PPV model but decided otherwise, opting to let the sport grow to its current status. This typical example is why esports gurus are angling for esports to embrace the pay-per-view option. However, it may work for a LoL group-based tournament format, and unlikely for a game like CS:GO.
UFC can sell out a PPV since some of its matchups pit legendary fighters against each other and may be repeated after several years. On the contrary, a Navi-Astralis matchup may not effectively sell a PPV as such a versus is guaranteed to occur within a year.
With all the commotion about the monetary future of esports, one entity that’s a stumbling block in actualizing PPV is the game publishers. Many esports, such as LoL, require some sound know-how, while games like CS:GO are easy to pick up at once. Esports like LoL are meant for people who play the game and are a platform for advertising in-game merch like emotes and skins.
Any collision with PPV will likely put a dent in in-game sales, and with no money being shared with esports teams or organisers, the latter are staring at a bleak future. Most game publishers generate much of their revenue from in-game purchases, and that is something they aren’t willing to share.
Game publishers like Activision Blizzard and Riot Games already dropped the ball during the advent of esports. Viewer numbers have dwindled over time and are now beholden to co-streaming. Co-streamers bring massive numbers that continue to popularise various esports titles making it too late to consider a pay-per-view model.
Esports publishers can also create their streaming platforms, charge via PPV, and invite streamers to join. Again, this is a pipe dream if game publishers aren’t willing to invest in the proper infrastructure to maximise PPV and avoid pirating possibilities. PPV can sort out esports monetization issues, but game publishers will likely not allow it to take off.