How Coronavirus Will Shatter E-Sports Industry

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We explain how the global COVID-19 virus epidemic will affect the e-sports business and the video game industry.

How Coronavirus Will Shatter E-Sports Industry
We explain how the global COVID-19 virus epidemic will affect the e-sports business and the video game industry.
We all know that the world is fighting against the most dangerous epidemic in the last 100 years. But, of course, life on the planet does not stop, it is just reformatted. COVID-19 will affect eSports and will temporarily change the ecosystem of # 1 sports of the future.
Basic Assumptions
This crisis will be more robust than in 2008 because the whole sectors of the economy in different countries are frozen. In developed countries, the quarantine will last 3-6 months, in the worst cases - until the end of the year. Traveling between countries, as before ( without any restrictions), I think it will be possible at the beginning of 2021. ESports Audience

Obviously, we will see an influx of new audiences in eSports. We will definitely get many new fans around the world, many will come from traditional sports, as sports events are everywhere canceled.

Live Broadcasts

Definitely, we expect an increase in viewers on broadcasts of online tournaments and professional players. In the most conservative version, I think it will be + 10% -15% for significant online events.
In general, it can reach + 30% -40%. Then since you are sitting at home, you need to watch something. And since we live in the era of video / live-streaming content - eSports is now more than ever needed.

Tournament Organizers

For tournament operators, this will be a harrowing time. Everyone will have to reformat, cancel all offline events, and go online for 6-12 months. This will hit sales sponsorship & media rights, which account for up to 90% of revenue from specific organizers.
Also, all 100% will lose revenue from the sale of tickets, 90% from the sale of branded merchandise. Many game developers are already canceling events before the end of the year, so tournament organizers will not be able to count on their funding.
And if someone gets something, then in a much smaller amount. As a result, in 2020, some tournament operators will receive about 10−20% of expected revenue. I think that in the coming year, out of the 15 largest tournament organizers, about 10 will remain.
Those who remain will reduce up to 70% of the staff and cut salaries by 30-50% to the remaining employees. The ratings of tournament operators will plummet. All of the following rounds will be flat at best, most likely in 90% of cases, they will be down rounds.

Professional Teams

The teams are doing better, but also notice. Again sponsorship & media rights sales will plummet. Merchandise sales & royalties will also suffer. Of the 30 largest teams, about 25 will remain.
But if you take a sample of 100 brands - we can miss 20−25 teams over the next year. The remaining teams will cut the salaries of players by 50–70%, since they do not speak at offline events and sponsor brands do not shine in front of the audience.
Sponsors, in turn, may revise/break contracts, since, in most countries, the epidemic is a force majeure. Therefore, I recommend that the owners of the teams carefully study the deals.

Live Broadcast Studios

Live broadcast studios that have enough of their own / others' content will be the only ones whose value and evaluation will grow.
It’s easy for them to make new online tournaments with sane prizes, which will be played by tier1 teams. And, in fact, they do not need anything for this, except for the sale of sponsorship, which will be more than the prize pool. Under current conditions, this is more than real.

Betting

It will be the heyday of eSports betting! All sports competitions were canceled, many postponed from 2020 to 2021. Almost all sports betting simply ceases to exist for a while as an industry.
And all eSports will go online, and we will watch new tournaments and leagues every week. So many who bet on sports will somehow switch to e-sports.

Marketing / Talent Agencies

These areas will suffer significantly because sponsors will considerably cut marketing budgets. On the other hand, 5-10 people usually work there, so it will be easier for them to survive this time than for the same teams or tournament organizers.

Computer Clubs

In recent years, we have seen the renaissance of computer clubs in Ukraine, Russia, and Kazakhstan. But alas, many clubs will close during the quarantine period, and it’s not a fact that they will be able to open immediately after it ends.
The only thing that can save them is a decrease in the rental rate by 70-100% for the period of quarantine.

ESports Media

There will be a definite increase in audience, but an outflow of advertising/sponsorship money. Compared to other sectors, the crisis will have a minimal impact on the media.

Game Developers

These guys are the only ones who will earn much more money in 2020 than they planned. After all, everyone is sitting at home and playing for days on end!

ESports Startups

It all depends on the maturity of the project ( namely, revenue/costs structure). But I think it will not be sweet for everyone since projects at the breakeven or Cashflow / PnL decisive stage can be counted on the fingers of two hands.
Raising money will be harder, evaluations will be clearly below expectations.

Gaming Startups

There will be hype, good grades, and raising money will not be so hard. But of course, it all depends on the idea and the maturity of the project, because almost all the niches in gaming are occupied.
In total, the whole market should tighten its belts for 2-3 years, but I am sure that this will be a great time to create more sustainable business models and new opportunities in e-sports.
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Urdu Soft Books - Novels and Articles on Business, Health, Technology: How Coronavirus Will Shatter E-Sports Industry
How Coronavirus Will Shatter E-Sports Industry
We explain how the global COVID-19 virus epidemic will affect the e-sports business and the video game industry.
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