The eSports industry has experienced massive growth in the past few years. With more people watching online streams of games such as Dota, LoL, and CS: GO than any other sports, it is safe to say that the industry has become a major player in the entertainment business. With more and more tournaments taking place worldwide and attracting larger crowds every time around, we could assume the Esports market would make huge income for its participants and companies involved.
However, a closer look at the financial status of a typical pro gamer/team reveals a very different picture. For players playing in tournaments, all winnings are paid in prizes which vary from a few hundred dollars to even $50,000 for World Championship titles. While this might seem like a great income, it is far from reality. In Counter-Strike, for example, prize money is distributed among the players and the organization. On top of that, there are expenses such as travel costs and equipment which players have to cover themselves. And if you then compare it to other sports, you will find that even after winning a major tournament with many thousands of dollars in prize money, pro gamers wouldn’t be considered rich.
Talking more deeply about esports being Buissness:-
Let’s take the League Of Legends tournament, “World Championships 2015,” held in Berlin’s Mercedes-Benz Arena. The tournament itself was said to bring Riot Games around 1.6 million dollars in ticket sales. At the same time, the overall amount generated by the event (including merchandising and others) would have reached around 10 million. This all went to Riot Games, the organization that created LoL and has hosted and organized tournaments since 2010. While this might have been a profitable event for Riot Games, players didn’t enjoy any significant share of these profits.
Even though many cases of successful video games/e-sports companies offer their players a part of the revenue, there are still countless organizations that refuse to do so. This might be caused by the fact that many of them got into Esports without really understanding its structure and challenges.
Would really Esport ever succeed for staying ever or not?
If this tendency continues, the consequences for the video game industry will be disastrous. While you can still survive in the current system, if you are just one of the people who got lucky and happened to have a currently trendy or even popular game, its quality will be questioned very soon. Some games were able to keep their popularity for over ten years (Counter-Strike), but the majority only stayed relevant for around 3-5 years (Quake, Starcraft). This would mean that after 3-5 years, players wouldn’t generate any revenue for the company and might even cost them money (in the form of prize money)
As you can see, this creates a very difficult environment to succeed in. It’s hard to think that companies would keep investing resources into Esports if they don’t see any chance of generating profit. And while it is true that the market currently seems stable, you have to consider how easy it would be for another game to replace LoL/Dota in terms of viewers and player base, which generates revenue. It only takes one successful game (again, CS: GO), and all major tournaments will be gone overnight.
While the possibility of multiple successful games is very low, it does not mean there aren’t any. The mobile game industry has shown us that you can create a game with little to no content (Candy Crush) and make millions out of nothing at all.
The solution for this problem is simple; even though most people involved in the industry know it, there is still no real solution to fix it. The closest thing would be “compensation packages” or, in other words, the salary paid to players by the teams. Not solveg their problems completely since even when they are getting paid, if the game gains popularity suddenly dies off, so will your job.
Sponsors included in Esports Business Model:-
Sponsors might also be a solution to this problem, but there are multiple problems with them. First off, sponsors only care about the short term, so they would normally want to have some control over your actions to promote their product. A sponsor could, for example, ask you not to stream another game or even another company’s products, which would go against your freedoms. The second problem with sponsors is that they only want to be associated with really successful players. This means that you could be the best player in the world; however, if the game itself doesn’t last for here more than a several years, it won’t make any difference since esports will die off as well.
The final solution to this problem would be to create the “Esport Professional League,” this league would include many different games, and players/teams from all of them would be able to compete against each other. While the possibility of such a league is very low, it might help relieve some of the problems that we currently face in esports.