‘There are some worrying patterns emerging’ – Challengermode CEO on the gap between grassroots and pro esports

Robel Efrem Challengermode

The esports industry is too top-heavy, with investment in top-tier esports ignoring growth potential at lower levels, writes Challengermode CEO Robel Efrem in this guest opinion piece.

The growth of esports over the last decade has been nothing short of remarkable. Beginning as a fringe idea on the periphery of the gaming world and developing into a billion dollar industry with mainstream success, it shows no signs of slowing down.

On paper there is much to celebrate, with the global esports industry revenue predicted to grow by 50% to $1.6bn by 2023, according to Newzoo.

But beneath the surface there are some worrying patterns emerging, particularly regarding where the vast majority of that money is coming from, and where it is being focused. The most common criticism is that the industry is being propelled by venture capital, and is therefore unsustainable longer term. 

While it is true that there will be winners and losers in the years to come, the fact that so much of this investment is being ploughed into major tournament organisers, high profile teams and game developers themselves should raise questions.

The way that funding is predominantly focused at the very top tier of esports, with almost none trickling down to the grassroots level, not only demonstrates that there is not an even distribution of wealth, but it puts pressure on that top tier to succeed and largely ignores growth potential in the lower levels of the sport.

In the simplest terms, the industry is very top-heavy, and built too much around sponsorship and advertising revenue, rather than consumer revenue and participation.

Despite the billions of people who play games around the world at home on their PCs, consoles or mobiles, there is a huge disconnect between the general gaming population and the top level of esports. This is broadly because currently there just isn’t the established path from casual gamer to esports pro that you might expect, leaving the industry conspicuously thin in the middle. 

“Esports has the money, the audience and the legitimacy it needs to keep growing, but it has to become more accessible, better integrated and more profitable beyond the highest tiers if it ever hopes to truly rival traditional sports.”

Longer term this is not good for the health of the industry. It needs a pipeline of new players ascending to the level of the 0.0001% at the top of the esports pyramid.

There needs to be infrastructure in place for people to put in the practice demanded of modern pro gamers, preferably in a way that supports players financially, and invests in their talent in a way that turns it into professional skill. As successful as they are, this support can’t just come from the publishers themselves.

Furthermore, there needs to be a place where players who aren’t determined to go pro, but who still enjoy the experience and participation in esports, for those who play for the love of the game and not just for the multimillion dollar prize pots. 

While local and third-party efforts exist to make the sector more accessible, they are often fragmented, underfunded, and don’t usually have the same levels of polish you’d expect from an established sport.

More often than not these initiatives have some initial success but fizzle out over a few years, after they fail to attract a reliable player base, or fail to reach that critical mass of networking and monetisation to stay viable. 

Developers themselves have been working towards fixing this problem for their own games, with companies like Capcom creating ‘feeder leagues’ to grow their Street Fighter esports business, and more recently Psyonix creating the ‘The Field’ feeder system for Rocket League, which provides teams a chance to break into the professional leagues.

Industry giant Blizzard Entertainment has even injected millions of dollars in prize money into its Overwatch Contenders league to incentivise participation below the top level. These systems nurture talent, and give people a way to reach the top level of their particular esport – but the gap between feeder leagues and the grassroots level remains wide. 

“In the simplest terms, the industry is very top-heavy, and built too much around sponsorship and advertising revenue, rather than consumer revenue and participation.”

This is one of the areas where esports can learn a lot from traditional sports as it grows and matures as an industry. With traditional sports like football, there is a pipeline. You have youth leagues or even academies, then small scale amateur leagues, then sports clubs (or college level in the US), then semi-pro, and finally pro. Each of these levels has a sustainable business model of its own.

Whether it’s people paying to play, or sponsorships, ticket sales and media rights – each level can support itself while acting as a funnel to take beginners to the height of their game. 

The assumption is often that these grassroots and intermediary level organisations are sunk costs for their parent organisations – a way to nurture talent that they can funnel upwards where they can make a profit – but often these leagues pay for themselves and generate profit on top. 

What we need to successfully drive esports forward is the connective infrastructure between amateur and pro. This goes beyond just giving players a place to practice and compete.

It needs to be flexible enough to quickly adapt to emerging esports games, scalable enough that it can reach enough players to be viable, and offer monetisation that makes grassroots esports financially viable for 3rd party organisers. Challengermode is one such platform providing this for nascent esports pros and competition organisers. 

Esports has come such a long way from its humble beginnings. It has the money, the audience and the legitimacy it needs to keep growing, but it has to become more accessible, better integrated and more profitable beyond the highest tiers if it ever hopes to truly rival traditional sports.

Just as with sports like football, the talent that the entire industry is built on needs a space to grow, and building that space is how we cement the industry’s success in the decades to come. 

Robel Efrem is CEO at Challengermode. You can also follow Challengermode on Twitter here 

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