By Ruben Oesterling
Esport organizations are losing money. Astralis, a Danish esports org, already lost $850,000 this year. Activision Blizzard owes their Overwatch League (OWL) and Call of Duty League (CDL) teams $400 million. How come they’re not breaking even? Esports aren’t made for such revenues yet.
The Broadcasting Issue
Fans of esports can watch their favorite teams for free with streaming services. There’s only a signed agreement between the Overwatch League and Activision, and those games don’t get many views. They’re streamed for the cost of nothing. Unlike baseball, fans are also not forced to see them live. The game isn’t on a field, but inside a screen. So when someone buys an arena for the Grand Finals of an esport, it’s not guaranteed that it’ll be sold out like the World Series.
The Money Doesn’t Add Up
Another reason is that professional players may cash out too much. Perkz, a League of Legends player,. A new Team Liquid member, Jensen, signed a $4.2m deal for three years. Is it even worth it? Doesn’t seem like it.
Even sponsors can’t save them. Former CEO of Counter Logic Gaming (CLG) and co-founder of NOVO, Devin Nash, explained this issue. A sponsor can fund an esports team for half a million dollars. But they won’t make much money. He saw a top-tier team only sell 1,400 PCs. His theory: fans aren’t connecting with the brand.
Esport organizations need to change something. Astralis could’ve made $150,000 this year with a set of skins. If they competed in the Valorant Championship, they could’ve made money from revenue-sharing with their skins. Perhaps if they made more relatable content for sponsored products, more fans would buy them. Or use smaller venues to build a fanbase that willingly pays to see their teams live. If they don’t change, they may not be here in a few years from now.