What Are The Biggest Challenges Facing Esports Businesses?

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Esports is growing ever popular. With traditional sports currently cancelled due to the coronavirus, ESPN and other broadcasters are showing more esports. As such, you might be considering starting your own esports company.

You might think that you know a lot about esports and you probably do, but are you as comfortable with the business side of things? There are many challenges along the way.

Standardization 

Comparatively, esports is a relatively fresh industry compared to other sectors. This means that new businesses need to be aware of the issues with standardisation. This is particularly true if you are competing, because you will need to recognise which tournaments are valuable and which may be a waste of your time.

Furthermore, contractual disputes are common. Poorly crafted contracts for your team can result in legal issues. If you look at Coassemble reviews, you can find software that you can use to teach your team how to write contracts. However, we strongly advise you seek expert legal advice first, preferably from an esports or sports lawyer or other specialist.

It is hoped that issues with standardization will be ironed out as the market continues to grow. 

Deciding On The Best Way To Enter The Industry

There are several revenue-generating options when entering the esports industry. These include:

• Sponsorship
• Advertising
• Franchising or Team Creation

For sponsorship, companies can sponsor individual players, teams or or events. In terms of advertising, you can get set up with a specialist marketing solution. Or, you can use esports to market and promote your own company. 

Generating sufficient revenues is a challenge to orgs across the world, with many making money through sponsorship as a key driver.

Another option to consider is whether to create your own team or even buy an existing one. A lot of companies are now buying or investing in esports teams as a way to connect to their audience and key customers. That’s understandable particularly as a core demographic for esports is between 18 and 25, an age group that many companies are looking to reach.

Filling The Key Roles

An esports team isn’t simply made up of players. You will need to think about filling a variety of other important roles including:

• Marketing
• Social media
• Coaches

Remember, both players and staff are going to be reps for your brand. Consistency within your brand image will be crucial. You need to make sure that there are behavioural standards in place, even when players are not competing in tournaments.

Numerous teams have run into challenges due to issues with publicity. However, you also need to be mindful of what kind of business you want to create and what impressions it gives off. Many orgs feel like a close connected community rather than a major corporation. This will make it easier for an audience to connect with the brand. 

What About Your Budget?

Like any other business, you also need to think about your budget. This is going to include everything from:

• Media production
• Travelling
• Tournament costs
• Equipment 
• Salaries

It is important that all the costs fit your business model, and you’ll need to have costs and goals in mind if seeking funding.

Ultimately, esports is growing rapidly as an industry. By the end of this year it is expected to be worth $1.1 billion. So, as a new business in this space, there is definitely a lot of potential to explore but there are also challenges that you will need to overcome. 

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