These troubles come amid an economic downturn and esports hype waning, with investors and sponsors growing impatient with the growth-before-profits model. 100 Thieves, the second most valuable esports team in the world, has just laid off a sixth of its workforce. It’s not that esports is dying; it’s that investors are struggling with incredibly inflated expectations, especially in the US. Discussing the Overwatch League in the same breath as the NFL seems premature, to say the least.
“Those numbers were completely unrealistic,” says Tobias Scholz, an assistant professor at the University of Siegen for human resource management and organizational behavior and one of the founders of the Esports Research Network. “Before, in the US, if you say, ‘Hey, I did something with esports’: Here’s 2 million (dollars). Suddenly they feel the pressure. Teams are going to struggle a lot over the next few years, similar to 2008, where we saw a huge change in teams.”
The problem is not only financial, it is conceptual. IN Global Esports: Transforming Cultural Perceptions of Competitive Gaming, Rory K. Summerley points out that simple comparisons between esports and traditional sports like the NBA and NFL are flawed. Esports currently have more in common with “late sports,” as he calls them, the most successful of which are the X Games and the UFC (and these are just the lucky survivors).
“In comparing esports to traditional sports, there is a risk of making natural equivalences that ignore the history of similar endeavors (such as late-stage sports or sports institutions that have ceased to exist),” says Summerley in the same paper. “Esports are unusually volatile compared to other sports and still have only a relatively niche audience even among people who regularly play or watch video games.”
Compared to traditional sports, the institutional environment for esports is chaotic, says Cem Abanazir, a lawyer focused on the sports industry, in another paper. Unlike modern sports, “esports lacks a monopolistic international federation that has the duty and power to make rules for all sports disciplines,” he says. “There are various organizations that organize international tournaments for various video games… video game publishers have taken it upon themselves to organize and promote their own esports competitions based on the video games they develop,” Abanazir writes.
Rooted in mythology and history, traditional sports require cultural capital and institutional stability (and the government subsidies that come with that status), the kinds of support esports lacks. And comparisons with sports established in the first half of the 20th century are simply unrealistic. “The US is trying to copy this NFL/NHL/NBA concept,” says Scholz. “It’s a cultural thing: the US is always about that hype, that identity of throwing money at it. They are more willing to take risks. It’s something we’ve seen in esports quite a few times, where if there’s a crisis in esports, the US suffers the most and several teams drop out or have to quit.”
Europe, says Scholz, has always had less wild ambitions and enjoys strong support even outside the top leagues. And the move to Seoul shows how viable South Korea still is (or at least how far ahead of the rest it still is). In China, home to four of the Overwatch League’s 20 teams, the League has seen promising growth, with rumors of another local team exploding on social media.