January 15, 2024
Hong Lau

Esports Winter (2 minute read)

Mario, Princess Peach go on a new adventure in the animated film, Super Mario Brothers

Anyone following this blog knows I'm a huge fan of esports, whether Valorant, Counterstrike, or my favourite, League of Legends. It's been such an exciting ride for the entire industry. Although it's not a part of "esports," it's been interesting to see how the streaming part of gaming has continued to take off. And then you have the competitive scene. Players took some of the worst living conditions early on and competed for pennies on the dollar. But back then, it was truly about the love of the game. You've heard from many pros that it had nothing to do with the notoriety, money or anything you may think players play for now. 

It has been like a balloon that went from pennys to a massive cash injection from venture capital. You saw major investment from a lot of major sports franchise owners such as the Warriors, Knicks (MSG), and others, invest into the space. Some names attached to the space in the last decade include Steph Curry, Shaq, Michael Jordan, and many others. 

The cash injection didn't only come from investors/venture capital. There was also a massive influx in brand sponsorship with esports. Logitech, Squarespace, DoorDash, and many other companies. It was interesting how they thought this demographic was a "valuable" audience. I don't have as much data as some may like for this article, as it's purely opinion-based from this point on. 

I feel like many of these brands moved to "streamers" right after. I do, in turn, agree with this move. There was always a valuable audience in the gaming sector, but it wasn't in esports. Streamers are personalities you trust and interact with daily through their streams. While professional sports teams compete, it is no different than trusting the products that Steph Curry would endorse vs the Golden State Warriors. None of these brands, in my opinion, had an awareness problem, so why invest in the esports space? 

League of Legends could probably be summed up as the "biggest" event of esports and the pinnacle at the moment. They run two major events all year with major sponsorships such as Mastercard, Mercedes, etc. One is called the LoL World Championships (which you've probably seen here if you're a fan of our blog), with the second being the Mid-Season Invitational. During the year, regional play exists in North America, Korea, China, Europe and other smaller "regions." The two major events bring the best teams from these regions and compete for the ultimate prize. Some teams like NA and EU that have traditionally not been that competitive pretty much come for bragging rights against rival regions as themselves. 

I bring this all up as context. China and Korea have been dominating LoL for many years. As a matter of fact, China and Korea have the only World Championships for the last 11 years (ever since Worlds invited the entire world). These are the two countries that actually have "sustainable economics" around their league and franchises. That can be attributed to a couple of things 

  • In China and Korea, gaming is more widely accepted as a sport
  • They are the best and continue to win
  • It has been said that Chinese billionaires look at this as a toy 
  • Korea is the home/originator of esports
  • Korea promotes the culture with PC Centres all over 

Where North America / the West may have had more sustainable growth, in my opinion, is where they have been "competitive" for a lot of the 21st century. That would be in First Person Shooters. You're talking about CounterStrike, Call of Duty, Valorant, Halo and more. 

North America also spends A LOT more money and is less frugal than Korea (arguably the most sustainable region). But that VC and sponsorship money has now started to dry up… leading to the term "esports winter." 

I think, in general, for North America to have a more sustainable ecosystem, it will come down to removing the inflation of high salaries, trying to recapitalize money that is going more towards streamers and influencers, and the bottom line… WINNING. Winning is the cure for all professional sports and could be the cure to helping elevate the North American esports ecosystem.