Wind back the clock just a few years to a time when people couldn’t stop talking about cryptocurrencies and NFTs, were sharing banana bread recipes online, and were all obsessed about a man named Joe who kept tigers as pets.
At this same time, excitement was growing about esports. These video game leagues and tournaments were being touted as the future of sport and that they would soon rival traditional competitions like football and basketball in popularity and profitability.
Lots of bold predictions were being made as more and more people tuned in to watch the best video gamers in the world battle in out in virtual worlds for prizes and prestige.
Have these predictions materialised and are esports still rising or are they now in decline?
The Rise of Esports
Unless you’re a diehard fan of video games, it’s likely that esports didn’t arrive on your radar until the last few years. They have, however, existed in some form since the 1970s, with the very first video games being used to host in-person competitions.
Modern esports began to evolve in the early 2000s when gamers came together to compete on popular titles of the day, such as StarCraft, Warcraft III, Evolution Championship Series 2004, and Street Fighter III. Some of today’s biggest leagues, including the Intel Extreme Masters and Major League Gaming sprung up during this period.
However, it wasn’t until the late 2010s and early 2020s that they really began to take off. Streaming services like Twitch and YouTube and the evolution of video games into a service rather than a product, expanding their lifecycle to closer to a decade rather than a couple of years, has helped to create a massive following for titles like Fortnite, League of Legends, and CounterStrike.
The cancellation of major sports leagues in 2020 drove many sports fans to esports, resulting in a rapid rise in viewing figures and interest from traditional television broadcasters who wanted to buy the rights to air games on their channels and networks.
From fewer than 500 million global viewers in 2020, esports drew in almost 600 million in 2022, a 20% rise in just two years.
Facing “Economic Realities”
Just as quickly as many commentators appeared to laud the rise of esports, in 2023, many performed 180-degree turns and began discussing how esports were dying. This sounds very dramatic and overhyped, though there is some basis for these claims as viewing figures in 2023 were down double-digit percentages.
In the last two years, there have also been numerous team closures and mergers as declining viewing figures have led to reductions in revenues.
However, calling this the end of esports seems dramatic. Instead, it’s better to describe it as a rationalisation, just as we see in many other industries as they go through economic cycles. This has been what the New York Times has described as esports facing “economic realities”.
Still a Quality Offering
Esports still have a lot to offer players and fans, particularly ones that offer an opportunity for participation for fans. Some sports are more naturally suited to this than others.
For example, poker is a sport that is an extension of the physical game, with most of the skills being transferable across both formats. This means players will often switch between the two, getting practice online and working their way up to competing in live tournaments.
This is so common that formal mechanisms exist to allow players to make this transition. One of these is the PokerStars Power Path scheme, a loyalty scheme that allows online players to earn differently-coloured power passes that can be used to partake in online and live events up to those that are part of the European Poker Tour.
In certain circumstances, esports still also provide an effective platform for video game developers to promote their products to players and for sports leagues to engage with a different and younger audience.
For example, Formula 1 continues to invest in its F1 Esports competition. Now in its 7th season, the competition is a channel to promote both the real Formula 1 and the video game used in esports.
Falling?
With that in mind, it’s hard to argue that esports aren’t experiencing a decline, at present. The debate is more focused around whether that decline is existential. Given that there is still value being offered by many esports competitions, it seems more likely that the industry is in a period of correction with the size, scale, and focus of its operators being rationalised to be more efficient and offer something more worthwhile and valuable to consumers.
