The technology sector is not going through its best moment. The energy crisis, inflation and interest rate rises have disrupted the plans of many firms which, in response, have opted to make extensive staff cuts. Twitter, Amazon and Alphabet are some of the technology firms that have carried out mass layoffs.
This is not a game. On the other hand, the cold of this technological winter has extended to the video game sector: firms like Unity Software have announced staff cuts. In parallel, the temperature in the e-Sports industry seems to be dropping steeply as well.
Goodbye to a historic e-Sports. Last April Counter Logic Gaming disappeared as an e-Sports team. The organization, owned by the Madison Square Garden Company, was turned over to NRG Esports. As reported by The Jacob Wolf Report, there was no financial transaction: NRG Esports gave MSGC part of the shareholding and NRG Esports took over all of Counter Logic Gaming’s debts.
Problemas para League Championship Series. At the same time, the majority of the workforce was informed of his dismissal, according to journalist Travis Gafford. In this way, Madison Square Garden Company abandoned its position in the League Championship Series, the largest e-Sports competition in the United States, which is, in turn, managed by Riot Games.
As we have changed. Counter Logic Gaming, one of the oldest e-Sports teams, was founded in 2010 by now-retired gamer George ‘HotshotGG’ Georgallidis. The organization was later acquired for $10 million in 2016 by the Madison Square Garden Company, which owns the New York Knicks. MSGC CEO at the time, David O’Connor, said it was a key move in a sport that was “on the verge of enormous change” with the “potential to generate significant growth.”
Evil Genuises also has difficulties. However, other e-Sports teams are having problems. At the end of April, the plans of Evil Genuises to replace four of their best League Of Legends players were known, after a poor performance in the LCS Spring Split (League Championship Series), a tournament in which they were defeated by the Golden Guardians. (team owned by Golden State Warriors).
The bag or your life. For its part, FaZe Clan received a notification from Nasdaq last March warning the group that it could be expelled from the stock market if its shares failed to recover to more than a dollar per share. Additionally, last week FaZe Clan announced a 40% roster cut.
More layoffs. On the other hand, other e-Sports teams have also executed layoffs. This is the case of 100 Thieves, a firm that in January laid off 30 of its then 200 workers, including Matty Lee, director of revenue.
‘Gamer’ exodus. Even TSM, one of the largest e-Sports organizations in the world, is going through difficult times. Last week, Andy Dinh, CEO of TSM, announced the organization’s decision to withdraw from competitions in the North American region, thus vacating its spot in the League Championship Series. According to The New York Times, this decision is equivalent to the departure of a franchise like the Los Angeles Lakers or Boston Celtics from the NBA.
Riot Games reacts. On the other hand, these movements leave the League Championship Series touched and suppose, by extension, a setback for Riot Games. In this sense, the firm acknowledged in a post published last April that the industry was experiencing “a difficult period”, and announced measures with the aim of reinforcing its Valorant Champions Tour tournament.
Hearing loss. One of the elements that explains the shock that e-Sports are suffering is the loss of audience. According to data from Esports Charts, the League Championship Series had an average audience of 212,985 viewers per minute in the spring of 2018. Subsequently, in 2020 it obtained an average audience of 205,646 viewers per minute in the same period, and in 2023 that figure dropped to 109,690 viewers per minute.
Teenagers pass. For Matthew ‘Nadeshot’ Haag, founder and CEO of 100 Thieves, the reason for this drop in audiences for the most important League of Legends league in the US is the lack of interest of the adolescent public in said video game. “If you survey a hundred 16-year-olds, maybe five of those 100 are going home to play League of Legends,” Haag said last April on a corporate podcast. The CEO of 100 Thieves also pointed out that this game is many years old, so he finds it difficult for new players to dare to play and try to improve their skills.
Too much expectation. This loss of audience is followed by increased disinterest from sponsors, companies that, on the other hand, have also cut their expenses due to the current complex economic scenario. In relation to this issue, Rod Breslau, an e-Sports analyst, recently stated in conversations with The New York Times that all those involved in the industry should do an “introspective” job, since there has been too much ‘hype’ around the esports compared to its real value.
¿Game Over? In short, e-Sports are going through a turbulent period, like other sectors such as technology. The question now is whether this industry is capable of showing the resilience that the video game sector has exhibited, a market linked to that of a discipline that turned ‘gamers’ into athletes.
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