Esports aren’t immune from a downturn

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.