These troubles come during an economic downturn and a dampening of esports hype, with investors and sponsors growing impatient with the growth-before-profit model. 100 Thieves, the second-most-valuable esports team in the world, just laid off a sixth of its workforce. It’s not that esports is dying; it’s that investors are grappling with wildly exaggerated expectations, particularly in the US. Discussing the Overwatch League in the same breath as the NFL now seems premature, at the very least.
“Those numbers were totally unrealistic,” says Tobias Scholz, an assistant professor at the University of Siegen for Human Resource Management and Organizational Behavior and a founding chair of the Esports Research Network. “Before, in the US, if you say, ‘Hey, I did something with esports’: Here are 2 million (dollars). Suddenly, they feel the pressure. Teams will struggle a lot in the next few years, similar to 2008, where we saw a major turnover of teams.”
The problem is not just financial, it’s conceptual. In Global Esports: Transformation of Cultural Perceptions of Competitive Gaming, Rory K. Summerley points out that easy comparisons between esports and traditional sports like the NBA and NFL are misleading. Esports currently have more in common with “late sports,” as he terms them, the most successful of these being the X Games and UFC (and these are just the lucky survivors).
“In comparing esports to traditional sports, there is a risk of making natural equivalences that fail to look at the history of similar endeavors (such as late sports or sports institutions that have ceased),” Summerley says in the same paper. “Esports are unusually unstable compared to other sports and still command only a relatively niche audience even among people who regularly play or watch video games.”
Compared to traditional sports, the institutional landscape for esports is chaotic, says Cem Abanazir, a lawyer focused on the sports industry, in another paper. Unlike modern sports, “esports lack a monopolistic international federation having the duty and power to make the rules for all disciplines of a sport,” he says. “There are various organizations organizing international tournaments for various video games … video game publishers themselves have taken the mantle of organizing and promoting their own esports competitions based on the video games they develop,” Abanazir writes.
Rooted in mythology and history, traditional sports command cultural capital and institutional stability (and the government subsidies that come with that status), types of support esports lack. And comparisons to sports established in the first half of the 20th century are simply unrealistic. “The US is trying to copy-paste this NFL/NHL/NBA concept,” says Scholz. “It’s a cultural thing: The US is always about this hype, this identity of throwing money at it. They are more risk-taking. It’s something we saw in esports quite a lot of times, where if there is a crisis in esports, the US suffers the most and several teams are quitting or have to stop.”
Europe, Scholz says, has always had less wild ambitions and enjoys strong support even outside of the top leagues. And the move to Seoul shows just how viable South Korea remains (or at least how far ahead of the pack it still is). In China, where four of the Overwatch League’s 20 teams reside, the League has seen promising growth, with rumors of another local team exploding on social media.