Time for an esports revolution.
The esports winter has arrived. It’s a term that’s being used to describe the current state of the industry in which esports teams are struggling financially to stay afloat.
Many of the industry’s biggest names are operating in the red, grappling with the harsh reality of the current market. However, this crisis might not be entirely detrimental. Instead, it could be the catalyst that forces esports teams and publishers to innovate, ultimately providing a better experience for their fans.
In an exclusive meeting hosted by Gen.G Esports, with a select group of media outlets, including ONE Esports, key players in the esports scene shared their insights on how the current financial struggles could spark innovation, and in turn, deliver a much better experience for fans.
Esports winter can be a good thing and even necessary for a better esports fan experience
Arnold Hur, CEO of Gen.G Esports, Jake Sin, Head of Valorant Esports Pacific, and Stefano Park, Head of Riot Korea Commercial Partnership, discussed the challenges faced by the esports industry and expressed optimism about the potential for positive change.
Some of the biggest esports names like FaZe Clan and T1 are operating in the red. According to T1’s audit report released in April, they showed an operating loss of approximately $12.6 million USD for 2022, while FaZe Clan has recorded a net loss of $53.2 million USD in 2022.
However, the key speakers believe that this difficult time could pave the way for esports to become a better and more sustainable industry. Jake believes it to be, “a natural cycle of growth,” and “a much needed one for esports.”
One of the ways esports can drastically improve is its fan experience.
“What we actually sell as esports is the experience,” Jake explained, “But currently as a viewer, I can only watch esports, and there are limited options for enhancing my experience even if I’m willing to pay more.” This gap between the desired and actual fan experience can be seen as a missed opportunity for potential revenue streams and engagement.
To bridge this gap, publishers and esports organizations can start considering ways to enhance and monetize the fan experience, with the overall esports fan journey in mind. The esports viewing experience, in-game experiences, and the experience of supporting their favorite esports teams, for example, are some of the areas that could be improved.
Currently, esports fans can buy in-game skins, with revenues split between game publishers and esports teams. While this model has been successful so far, there is a demand for more innovative products and services that can improve the esports fan experience and lead to increased engagement and revenue generation.
However, “it is not that simple”, Jake said. “It costs money and resources to make skins and since revenues are split between teams and publishers, and there’s not a lot of profit to be made from them. So, we need to think of more innovative and efficient ways to provide digital goods or services that fans want that can also be profitable.”
One idea suggested by the speakers is selling digital products to fans. Although specific examples of digital products were not discussed in detail, the recent launch of the LCK LEGENDARIES series can offer a glimpse into the future, which sells digital goods related to players, teams, and even clips of extraordinary plays made by LCK players.
READ MORE: Be part of LCK history: New LEGENDARIES esports collectibles every fan will love