Forbes’ list shows American esports organizations aren’t ‘awful business’

Originally, estimated with market revenue of $130 million in 2012, according to Statista, esports is a growing industry continuing to thrive. Esports has now grown more than five times by the year 2018 and is predicted to reach up to $1.7 billion by the year 2022.

Statistically, it proves its increasing success as a business to invest in for anyone wanting to consistently profit without heavy conditions. Fair Game’s interview with Mark Cuban and Forbes’s recent valuation of the top esports companies shed more light on the esports industry.

The viewership of tournaments is at an all-time high also. Reports say that last year, over 60 million tuned in to the League of Legends Mid-Season Invitationals, which is 2.7 percent of viewership coming from Esports fans around-the-world.

However, combined viewership was a different story. Esport events throughout the year 2018, received a combined total of 173 million in worldwide audience counting. All of which being frequent viewers.

Along with the booming business, professional players are increasing in count by the day. The reason for it is evident in the available prize pool of the tournaments; Cash prizes are becoming increasingly more enticing to professional players.

Dota 2’s The International 9 in August 2019 held a prize pool of $34 million—the highest in esports to date. The winners of that tournament are also the highest-paid professional esports players. The pentuple set of Dota 2 players from OG: Johan “N0tail” Sundstein, Jesse “JerAx” Vainikka, Antham “Ana” Pham, Sébastien “Ceb” Debs, and Topias “Topson” Taavitsainen, have earned a combined earning of over $20 million because of tournament wins. That by itself proves how quick and significant esports developed as an industry and a profession.

Mark Cuban gives his two cents

Credit to The Dallas Morning News

Esports is an industry many people are adamant about growing. However, some do disagree. Mark Cuban, an American businessman, investor and owner of NBA Dallas Mavericks, states that owning a United States-based esports team is “awful business.”

Fair Game interviewer Kristine Leahy brought Cuban to the show to talk about his investments in esports and his previous statements against buying a North American League of Legends Team because of “player overload.”

“You know what the meta is right? They change everything all the time, whether it’s Overwatch or League of Legends, Fortnite for that matter,” Mark said. “When it’s a five-person team and the meta changes, every 90-120 days, it’s like a whole new game. It’s so competitive, and it’s so mentally and physically straining that it’s brutal. … The economics [of esports], I think a lot of people who bought into teams, not the esports themselves, had no idea how bad of a business it was. No idea. In aggregate, it’s a good business. Is it growing? Yes, but domestically here in the United States, it’s an awful business. … I think a lot of people who bought in, didn’t recognize the difference between a stream in viewers in Europe, in Asia versus a stream in a viewer [in the United States.]”

Continuing the interview, Leahy dove more into Cuban’s expertise, asking where in the world esports are paying off.

“Being in Asia there’s money, and if you’re in Korea, there’s tons of money there; it’s real,” Cuban replied. “If you’re in China, there’s money there, here, not so much.”

In conclusion, Mark Cuban addressed the cons of American-based esport teams, stating the reason why his lack of investment is because of the on-going game changes and lack of streaming viewership. Additionally, physical and mental player overload due to the constant game balances and updates was apart of his reason.

Forbes defends esports organizations with facts

Recently, Forbes released an article that comprised the world’s most valuable esport companies of 2019.

The information that Forbes provided displayed the success of American-based teams. The list included 12 companies ranked in highest-earning, and seven of those companies are American-based: Cloud9, Team SoloMid, FaZe Clan, Envy Gaming, 100 Thieves, Immortals Gaming Club and NRG Esports.

Cloud9 stood tall along with Team SoloMid at a tied value of $400 million, making both the most valuable esport companies in the world. Although, as a combined force, all seven companies add up to a value of $1.73 billion. Economically, American-based teams, companies and organizations are doing much better than anticipated. To most, it is considered a “gold mine.”

American esport team viewership is not as bad as Mark claims it to be. According to Esports Charts, the most popular esports teams by hours watched in 2018 included four American-based teams out of the ten listed. The four teams’ viewership time added up to 184.8 million hours (equivalent to 21,095 years). American esport viewership reached an estimation of 25.7 million also in 2018, making it 14.8 percent of the worldwide audience viewership.

The numbers indicate that American esports companies are not an “awful business.” Viewership in esports grows year after year and with 2.2 billion gamers in the world—nearly a third of the human population—it’s likely that this trend continues.

Written by Jay Hunter