Long reliant on a booming ad market, free-flowing venture capital, and a crypto bull run — esports are experiencing a slowdown, per Bloomberg.
In recent months, the two most valuable esports groups, Team SoloMid and 100 Thieves, have reduced headcount.
Major game publishers, best positioned to tolerate losses in the space, are also narrowing their esports operations.
FaZe Clan — essentially a publicly traded brand of gaming pros — has seen its stock plummet ~80% since going public.
Monetization is proving to be the biggest problem. Esports’ 216m viewers each generate only $5.30 in revenue per year. Sponsorships help, but crypto firms reportedly made up 15% of that revenue in 2022 — the value of which is likely to shrink.
Still, esports may have a bright future. The industry draws in 261m viewers every month, and Saudi Arabia has invested ~$1.5B into esports as part of a $38B gaming bet this year alone.