The state of the esports industry has been a hot topic for the past few years, with many viewing competitive gaming as a bit of a money pit. Is there a reason investors are shying away from the esports scene? Esports journalist Kevin Hitt decided to ask Mark Cuban, one of the most famous investors out there.
Cuban, of Shark Tank fame, is the owner of NBA’s Dallas Mavericks and the team’s NBA 2K League esports affiliate, Mavs Gaming. Despite his involvement with esports, Cuban has never been too impressed with the industry.
In 2019, Cuban sat down on Fair Game to candidly discuss esports and he didn’t sound too confident in its future. While he felt there was money to be made in Korea and China, Cuban said that a lot of people that have purchased esports teams were not aware of “how bad a business” it really was, especially in the United States.
“I think a lot of people who bought in didn’t recognize the difference between a stream and viewer in Europe and Asia versus a stream and a viewer here. Even Overwatch League [had about] 300,000 maximum global viewers, that’s not a huge number,” Cuban said at the time.
So are things looking better now?
When Hitt asked Cuban if he had any recent thoughts on esports, Cuban responded with certainty that it’s still not looking too great in North America. Cuban explained that esports still has a niche following and didn’t become “mainstream” in the United States as many investors hoped.
“But the economics don’t support the scale of investment back then. It may be that other than for publishers, more money has been lost than made,” Cuban explained.
The esports scene largely agreed. Esports teams often struggle to make money, usually relying on sponsorships and investments to pay employees and pro players. Many esports teams make more money off of their full-time streamers than the competitive side.
Still, the esports industry was said to be worth $1.65 billion in 2021. The industry has continued to grow, with more teams and tournaments and sponsors than ever before. But will investors see their money any time soon? Cuban doesn’t think so.
Cuban is a billionaire entrepreneur, television personality, and media proprietor whose net worth is an estimated $4.8 billion, according to Forbes. He is ranked No. 177 on the 2020 Forbes 400. While investors are often behind the scenes, Cuban gained popularity through his role on the show Shark Tank, where he often invests in various products and gives insightful advice about various industries.