The death of the Esports ‘Middle Class’
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In 2015 and 2016, the future of esports looked inevitable. Big money and big names were investing into competitive titles on the (overinflated) promise that they would be the next big thing. But the boom times have not lasted.
Today, esports organizations and publishers are feeling the pain, but the layoffs and crunch are not happening uniformly across the industry. Bigger teams and publishers have — so far — weathered the winter better. Instead, the middle class of esports is on the precipice of a mass extinction event.
Esports teams are the bedrock of the industry. Esports layoffs have been widespread like many other sectors in recent months. In an effort to become cashflow positive, top organizations are letting go of talent and pulling out of games to cut costs and reduce their burn rates. These drastic measures are a sign that esports teams are preparing for the worst.
But smaller teams aren’t just cutting costs — they’re beginning to drown. Since November, some medium and smaller-sized teams have ceased operations. Australia’s ORDER was the first domino to fall. More recently, American organizations eUnited and Torrent have joined them.
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There are a number of reasons for the demise of these smaller teams. Esports organizations are heavily reliant on sponsorships. Ad spend is on the decline as brands tighten their belts over recession concerns. The entire industry is feeling the pressure but smaller teams are feeling the
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