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Is the Esports Bubble Ready to Burst?

26 Jun, 2019

By: Michael Popke

Beginning in 2020, the popular Overwatch League “will require all its teams to be physically based in the home cities they already represent, to play home and away matches like more traditional sports,” Forbes.com reports.

That decision further establishes the burgeoning influence of esports and means that more facilities like the $10.5 million Esports Stadium Arlington are coming to cities around the country. Among the most elaborate will be the recently announced $50 million gaming arena in South Philadelphia. According to The Philadelphia Inquirer, the 3,500-seat venue will be located next to the Xfinity Live! entertainment and dining destination and within walking distance of Lincoln Financial Field, Citizens Bank Park and the Wells Fargo Center.

Other highlights from the Forbes.com article:

  • Riot Games boasts multiple arenas around the world for its hugely popular League of Legends, “including a sleek facility complete with its own gift shop and dining area across Olympic Boulevard from its Los Angeles headquarters.”
  • Universities with large athletic departments, including the University of Washington and The Ohio State University are launching esports initiatives. This fall, Ohio State will debut an 80-seat facility to coincide with what it calls “a first-of-its-kind comprehensive esports program” that will include “undergraduate and graduate degrees; an elective course in esports content production; online certification programs for specialized credentials; and a gaming speaker series.” 
  • Full Sail University, which offers campus and online degrees, recently opened a $6 million, 11,200-square-foot esports arena named “The Fortress” in Winter Park, Fla. Considered the largest college arena of its kind in the country, the facility represents a major commitment by a school that offers no other intercollegiate athletics.

All that said, is the esports bubble about to burst?

Kotaku, a gaming news, reviews and tips site, posted an in-depth piece in May titled “Shady Numbers and Bad Business: Inside the Esports Bubble.” Reporter Cecilia D’Anastasio interviewed 17 esports experts and executives who expressed concern about the industry’s health. Front Office Sports aptly summed up the 8,000-word report in three bullet points:

  • No standard viewership measurements: “Unlike most traditional sports leagues, viewership numbers are reported either by the game publishers, the esports teams or the streaming platform,” Front Office Sports wrote. “But they are trying to fix this with Riot games saying they are ‘actively working with a number of entities in the esports and measurement industries to establish standardized data and measurement systems.’ Average Minute Audience is the new figure that publishers like Riot and Blizzard are reporting.”
  • Inflated view counts: “One of the areas the industry is battling is how to [discern] junk views vs. real views,” according to the Front Office Sports summary. “According to a former Twitch employee, junk viewers are defined as ’someone who’s logged in but not engaged with the content,’ and are a view that ‘only exists to increase a metric for somebody in sales or business development.’ According to the [Kotaku] report, boosting viewership numbers with junk views is a common practice.
  • The impact of influencers: “With more fans wanting to follow streamers like [online superstar] Ninja and not whole teams, some believe that influencers are ‘short-circuiting’ the industry, Front Office Sports notes. “Because influencers are making so much money, they are driving up the salaries of players on teams, leaving the teams with salaries that are ’at completely unsustainable levels.’”

But, as D’Anastasio concludes, “even if the bubble bursts, esports isn’t going away.

“I don’t f****** care about the bubble topic,” one source deeply involved with the Overwatch League told her, using salty language. “Let’s say it’s a huge bubble and it’s gonna burst and all the money goes away tomorrow. Will people still play games? F*** yeah, they will. Will people still get together to compete? F***yeah, they will. Will people watch? F*** yeah, they will! If there’s a bubble, let it pop, and let’s get back to a place of sustainability and build from there.”

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