A couple of years ago, the video game industry seemed to be the future. Not only was it reaching a large number of viewers through online platforms, but they were also attracting a large number of investors who were watching competitive teams from games like League of Legends, Counter-Strike, and Overwatch, among others. However, after years of economic boom and promises that sooner or later the investments would pay off, they ended up in trouble to recover the investments, which is causing the feeling that the competitive world in video games is reeling.
CLG is one of the organizations that suffered from the esports crisis in North America.
A couple of news stories in recent months have shown that competitive teams in North America are having serious problems maintaining an economic balance that allows the investment of participating in championships to be a sustainable option. First, there is what happened to Counter Logic Gaming (CLG), an esports organization that, in 2017, was majority acquired by The Madison Square Garden Company (MSG), a business group that is also the majority owner of the Knicks basketball team and the Rangers baseball team, with the intention of gaining a place in the professional world of video games and, thus, shape, earn profit. However, the situation has not been the best for CLG, since, after the effects of the pandemic subsided, and with it, the views of competitive games, various sponsors and brands have begun to disappear from the video game scene. This caused CLG to enter into an economic crisis which meant that, in April 2023, the MSG sold the organization after firing almost all its members except the axis of League of Legends, which would be merged with NRG Esports.
Video game views have dropped considerably in the space of a year.
On the other hand, the difficulties of keeping the economic promise have also hit the Team Solo Mid (TSM), an organization with one of the longest-running teams on the League of Legends competitive scene, who this Saturday announced the decision to sell their position in the LCS, one of the most important leagues in the world, with the intention of to change to another high-class league, to have the opportunity to reach the World Cup instead of having financial problems. The team seeks to sell its space in the league for 20 million dollars in order to recover the investment, since Riot was asking for approximately 10 million to secure a space in the LCS, a long-term investment that would allow good profits for the organization, but which, with the bankruptcy of its investors, became more of a waste of money than a golden opportunity within the North American leagues.
Despite years in the competitive League arena, TSM is struggling financially.
Despite the promises that esports would be the future in the long term, the problems occurring in North America indicate that the odds are dwindling and the competitive landscape is beginning to falter. It remains to wait to see the reaction from the spectators and also from investors, to find out if this crisis that is being experienced in video games will be replicated in other regions of the world, and in other video games besides League of Legends.
Editorial: Gaming / Facebook / Twitter / Coverage / Instagram / Discord
