I’ve wanted to write this for a while as the esports industry is going through some difficult times. That includes layoffs, team shuddering / being dropped, invoices not being paid and a whole laundry list of public companies nearing -90% from their all time highs. Your esports heroes from 2011 – 2015 which some might call the golden age are either retired, working somewhere or no longer in the industry.
In the cover photo for this articles. That’s me and my friend Greg from back in the Dota 2 days. Yes, that’s us memeing the “how big will esports become”. As you can tell by this article, it’s a reflection on some of the time I had in esports from 2011-2023 and where we went wrong and where we can improve. In general, I think there’s a few camps.left who work in esports
- Super jaded veterans
- People in esports who are still there but grinding away silently
- WAGMI new people in esports (bless you)
- Outsiders looking in and wondering what’s going on
Where did we go wrong?
Well, what a long question. Here’s a quick synopsis of how this can go.
Are we the old man yells at cloud meme? Maybe. Here’s just a few of the areas where we went wrong in esports
- No clear path to profitability
- Sorry friends, that merch drop isn’t gonna sell six figures. Esports is some of the cringiest clothing in the world. When your top business model is that and planning on winning continuously, you’re not gonna make it.
- Profitability wasn’t clear at all in esports due to the murkiness of the publisher
- Took VC money with short sighted business vision and plans.
- I was way too honest when I was trying to raise. I told them 5-10 year play. I got laughed out of the room. All they wanted was a dump on retail special with a 1-2 year payback. Fuck everything else xd.
- Top end people got paid way too much and the bottom way too little
- Publishers got even more control towards the end
- Remember when publishers would work with tournament organizers and teams? Yeah those were good times. Crowd funding, rainbows and more. Instead, now it’s legalese, you’re lucky to be here etc. Publishers got wayyyyyyy out of control. They need less control of the overall ecosystem if esports hopes to survive at all.
- Too many people who knew nothing about esports
- Yes, it’s OK to be new to an industry. However, if you’re impacting major decisions as a Csuite executive and you know nothing about gaming and don’t play games there’s a major problem
- The contrary is also true. Executives who casted an esports event in 2003 in a toilet becoming a VP of some important company.
- Balance is key for both sides.
Is esports dead?
Not dead but esports and some of the major players in it and around it need to do a hard look at themselves. This will take quite some time to recover from. Imagine raising in a down round where your company valuation is -98%. Those are absolutely great convos to have. How about all the jaded old staff from esports orgs who really cared and now got tossed aside due to the company changing so much. Having a significant brain drain due to how bad the industry is a real tough problem to solve. We need to set up the future for success if esports will become a proper industry.
Future solutions and the way forward
I won’t get too in depth into the below. You could literally go back and forth on nuance for hours on these. However, high level and key points in my mind are as follows:
- 150% revenue for players over the entire league? Nah. The UFC is about 13% which is one of the lowest from what I understand in professional sports. NBA is around 50%. How about we start with a number around there and try to build something sustainable.
- Focus on grassroots
- Forcing esports down everyones throat? Probably a terrible idea. Making a new game with 0 playerbase? Another oof idea.
- The focus on grassroots needs to happen. Amateur must be a focus and we can’t just “make esports happen”
- Publishers need to have less control
- Publishers taking 75% of the pie and then offering flat fees after years of neglect doesn’t work. Turning on the “esports faucet” once a year won’t work. This needs to be a partnership consistently. IP rules need to be lessened and publishers need to work hand in hand with teams, players, talent and organizers. Otherwise, we’ll go down the how big will esports become
- Dumb money was a mistake
- Yeah, those SPAC and RTO specials up here in Canada were a huge mistake. Very few people got rich other than insiders and the retail damage it caused set esports back years. This cannot happen if the industry needs to mature. Who am I kidding, this will probably happen but we need to learn our lessons here. Dumb money is a mistake. Don’t take it.
- More community control
- Remember Dota and CS? Did Valve and Blizzard make those originally? Nope. However, they provided the tools for a community to foster and build out the tools. Instead of restrictions and 10,000 pages of legalese
I don’t know what my next steps are in esports. I’ve been writing about software delivery and running a consulting business in tech for the last year or so. I still own my company, met amazing people and have been able to travel the world due to esports. Things need to change for the next generation or we’re just going end up repeating the same stuff over again next cycle. If you want to get a hold of me just contact me or leave me a comment bellow.