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If you are thinking about the esports events this winter, there is a larger reality looming. That is, many are concerned about the decline that is evident in this industry. The term “esports winter” seems to have been coined by journalists Erron Kelly and Jordan Fragen, of VentureBeat. They introduced this concept in late 2022 in an article stating that esports winter is coming. After that, Fragen hosted a live panel discussion on the subject, which talked about how the industry should navigate through it.
Trends in the esports industry since 2021
A downward trend became more evident by the end of 2022. By then, there were some layoffs and companies shutting down or downscaling, or reporting losses. Hence, Fragen put the label on this downturn trend. After that, there have been more scaling back and difficulties. After the layoffs came the turn of the media outlets. Some of these as well as tournament organisers were affected. These parties cited that the current climate in esports was the main reason for their decision.
It’s fair to say many of the esports organisations still around are struggling. It is affecting organisations of different sizes, many of whom are struggling to turn a profit. Some are reporting losses that are running into millions of dollars. This scene is the opposite of how the industry looked around 2010. At that time there was a goldrush in the industry – there was a lot of hype and investments were booming.
The main outcome of this trend is financial uncertainty. As a result, major sponsors and investors have shifted their investments. However, the long-term fate of this industry is still uncertain. Reports stated this time last year that BMW was cutting spending on some of its major esports sponsorships. Companies are concerned about their return on investment in a cost of living crisis, and some partnerships are floundering.
It’s not just esports. Several game developers and publishers made job cuts over the past year, including the likes of Epic Games.
Pockets of Prosperity
Not every region or every sector in esports is in a state of decline, or scaling back. For instance, BMW’s Middle East office partnered with Nigma Esports in August last year. It’s historically been a trend with the large automotive brands. Many of them have sponsored esports events and organisations.
The job market is also affected in the segments of gaming and esports, especially in the case of small and medium-sized organisations. Overall, jobs have reduced. For instance, the decline was 19% between the years 2021 and 2022. However, some larger esports organisations are weathering the storm with stability.
How to Counter the Esports Winter?
- Silver Lining via Multi-Gaming Sites
As the experts’ advise, companies that are failing need to diversify. That is the key to thriving in the gaming industry. One segment that some say has been doing well is the online gambling business. This industry has some regulated norms and security measures such as the UK Gambling Commission. What’s more, some sites offer esports in their portfolio of options. That is, besides casino games, sports betting is gaining ground. And in this section esports is included as well.
Gamblers who are already invested in casino sites can be enticed to gamble on esports events. It is especially an area of interest for young gamers aged 18+. Also, gamblers get a variety of options. Besides casino games, they can bet on sports and esports events.
Casino sites have another advantage in their favour – promotion offers. While eGaming sites might have offers, sports betting has unique offers. These include free bet money, cashback, in-play bets and so on. These can be advantageous for esports organisers. They can use such promotions to gain a larger audience for their events.
- Secure and Fast Payment Conveniences to Woo Esports Fans
Esports and gambling sites also have another advantage – a growing portfolio of secure payment options. For instance, Giropay casinos. It is one instance of a secure online payment system. It says it is widely popular among European and other international casino sites. It is also available on some esports sites. Besides eWallets, esports sites can increase the acceptance of cryptocurrencies. These assets are particularly popular among some gamers. Hence, such payment options can woo esports fans.
Most casino sites provide added incentives linked to certain payment modes too. For instance, many sites offer bonuses linked to cryptocurrencies. The same promotion scheme can be used for esports gambling or gaming, in a bid to see an increase in participation among esports fans.
- Marketing to Target Tech-Savvy Fans
The esports industry holds potential among tech-savvy, affluent fans. As a result, they can take up marketing methods that reach such audiences more effectively. To offset this decline trend, companies may need to revisit their marketing strategies, which can include changes in broadcasting platforms. Also, tie-ups with other gaming or gambling sites may prove effective. On these platforms, publishers can increase their presence, and they can also have separate promotions for their events on these platforms.
Dom is an award-winning writer and finalist of the Esports Journalist of the Year 2023 award. He graduated from Bournemouth University with a 2:1 degree in Multi-Media Journalism in 2007.
As a long-time gamer having first picked up the NES controller in the late ’80s, he has written for a range of publications including GamesTM, Nintendo Official Magazine, industry publication MCV and others. He worked as head of content for the British Esports Federation up until February 2021, when he stepped back to work full-time on Esports News UK and offer esports consultancy and freelance services. Note: Dom still produces the British Esports newsletter on a freelance basis, so our coverage of British Esports is always kept simple – usually just covering the occasional press release – because of this conflict of interest.
