The ‘years of easy and cheap capital’ in esports are over, so some say, as the excitement from investors pumping money into the space over the past decade has transitioned to questions around business models of esports organisations and return on investment (or lack thereof). Esports in 2023 is changing.
The sector is braced for a tough year ahead, dubbed ‘the esports winter’, with macro trends such as inflation, interest rate increases, the rising cost of living, crashes in crypto and Russia’s invasion of Ukraine affecting industries across the world. UK orgs like X7 Esports, Lucent and Rix have shut down in recent weeks, and others are expected to follow. But are there dark days ahead, or is there a silver lining here? An anonymous UK esports insider with deep experience ponders in this opinion piece about esports in 2023.
Hello UK esports scene, it’s me, the introspective reality check you don’t want to hear. Let’s talk about esports in 2023 and beyond…
It’s a new year, and with a new year comes all the possibilities, opportunities and excitement of big things to come, yet it sadly also brings some of the same old problems, hang-ups and habits from 2022 and prior (and we’re talking legacy here).
While I try to avoid being too doom and gloom or harsh on what is ultimately a scene sustaining itself on passion, determination and raw drive, it’s hard not to be frustrated with the near constant dichotomy seen from the public stances and actual actions of members within the scene, at nearly all levels. So, if you’d allow me, I’d like to talk about that today, to hopefully spur on some genuine self-reflection and explain why I believe some of the recent bad news isn’t actually so bad, at least not in the long term.
So the context for this is broad, but to keep it focused it’s primarily due to a recent string of tweets from a range of prominent figures regarding their views on esports in 2023. Full threads and discussions can be found here:
But to summarise predictions abound that, many orgs will have to make significant cutbacks due to overspending or not creating a profitable business model. Obviously there is more nuance to this, but I’m not a financial expert so let’s leave that topic for other people.
Refocusing, this possible scenario for esports in 2023 is being described as ‘a dark age in our industry’, with many taking these initial headlines and prophesying an imminent collapse, lamenting the sorry state we find ourselves in. Why is this? Not the state of where we are, like I said, that’s a hornets nest I don’t want to touch, but why is it that people seem so distressed about the reality of fiscal consequences coming to bear? This, to me, is where the bitter pill rears its head.
Now we are all very quick to get attached to things, teams, players, orgs, and losing those things or seeing them diminished or closed off hurts like hell (believe me, I’ve been there first-hand). The pain from that will never go away and there are many reasons it may happen, but if we try to keep an objective mindset and focus on the financial reasons mentioned prior, why really is it a bad thing if orgs can’t continue?
If an org has been unable to make itself sustainable as a viable entity, let alone profitable, why should it remain in the scene? This may seem callous but is it not a fair question? How many times have we seen players or coaches take to Twitter to discuss their late/under/never appearing payments they were promised from orgs?
How many times have we reviled the underhanded management practices that leave people without their fair reparation for their efforts? Perhaps if orgs were run sustainably with a culture of honest and realistic accounting, we would not need to grab our pitchforks and torches for the predictable end of season twitlongers.
Individuals within orgs aren’t the only ones to lose out from this fast and loose view of finances though, with more instances than I could possibly recount of talent being messed around and ultimately losing out due to these attitudes. Tournament admins, Twitch moderators, social media managers, casters, broadcasters, all of the people who actually make esports HAPPEN are routinely in the firing line of organisations making shoddy financial decisions and not building with a sustainable foundation in mind.
These people, usually young passionate freelancers with the skills and drive to push the scene forwards for esports in 2023, are consistently fighting with organisations for their fair share of what was agreed – and why?
‘Oh, our sponsorship deal we were relying on fell through’ or ‘our team in division x didn’t perform as well as we’d thought, so we now can’t afford it’.
No. These are poor excuses from short-sighted, overly optimistic and frankly incompetent decision makers who hop from one project to the next with little regard for those caught in the firing line (don’t get me started with the endemic of failing upwards).
For clarity, I am talking about the common practice of orgs assuming they have or will have agreements and sponsors in place before they are actually agreed and making financial commitments based on those. I am not talking about instances where larger factors beyond an org’s control (collapse of the NLC for example) cause previously interested parties to withdraw.
I think it’s fair to say we all want people to receive a fair payment for the work they do, for esports in 2023 and beyond. It’s also likely that we would all agree people should be able to trust that they will be paid what is agreed, preferably within a timely manner.
Esports in 2023 and the reckoning of unsustainable organisations
I’ll ask again then, why is it we are so upset about an upcoming reckoning of financially unsustainable orgs? Surely to achieve what we wish to see in the scene, there has to be the acknowledgement that a sound financial basis needs to exist within the organisations that populate it?
After all, esports in 2023 is a business now. It’s not just some bedroom hobby you do with your friends like it was maybe ten or so years ago, it’s an actual growing and professional industry. Yes, we may be talking about the lower end of it, the grassroots and pro-am aspects, but somewhere there has to be that cut from passion project for fun to a realised and stable business. If not, then what is it we hope to achieve from the scene?
I wholeheartedly agree with Matthew ‘Burns’ Potthoff’s take that this will lead to more sustainable orgs and higher standards of conduct across the board, for esports in 2023 and beyond, with those that were already operating in a frugal, sensible manner thriving as the changing landscape will provide them with new avenues to shine.
Let’s not then cry for the teams and organisations that may be closing their doors, but instead see it for what it is, the consequences of their actions coming home to roost, as the poor practices of prior years falls away to give space for a more sustainable scene to flourish.
Happy New Year all.