Is Esports Dying? | A͏s͏m͏o͏n͏g͏o͏l͏d͏ Reacts

So yeah this is the Deep fake era gentlemen we are in it right now and apparently we’re also not in the Esports era is Esports dying uh oh is everything you know and love dying right before your eyes yes let’s find out yes the answer is yes dance yes the answer

Have you seen World of Warcraft all right you might have guessed it but I’m gonna be talking about some Hoodie orgs today but what you might not know is that we’re also a hoodie orc go down and click in the link in the description and get yourself one of our dope Dutch

Grass hoodies there is one question that has been sitting in the soft underbelly of the you see what they should do with that is they should create a program to if there’s a streamer that somebody doesn’t like or like a viewer you should be able to send a code to that person to

Insult them of giving them the hoodie that says touch grass that’s what they should do you turn buying the hoodie into an insole Esports and gaming world over the past few months is Esports dying now for me a lot of the Resurgence of this question follows the downward momentum of phase

Clans decidedly odorous initial public offering back on July 20th of last year for those of you who don’t know an initial public offering or IPO is what happens when a business takes their company public oh yeah and allows people to buy and sell their shares on a stock

Exchange and if you’re wondering how faze’s stock has been doing since it’s doing so badly it might actually be taken off the uh the S P 500 or something like that because the stock is going under a dollar it’s that fateful July day well you don’t have to be a financial analyst to

Analyze this chart since its debut on NASDAQ the shares in phasing up have complicit that’s bad that is really really really [ __ ] bad I I think it makes sense why it’s so low I mean I think Esports and everything about it have been massively overvalued people are just you know thinking it’s

Going to change the world and stuff like this I I don’t really think so obviously it’s bad for otk it’s bad for all the other orgs whenever you know phase doesn’t do well but you know it’s that’s what happens I think FaZe is also like it’s built around uh like YouTube

Stuff and uh Esports more which I think is not really doing as well as this chart since its debut on the NASDAQ acting up have completely tanked and that is contributing to a much larger conversation in the Esports gaming World about just how orgs and Esports become profitable businesses you see many of

The biggest Esports orgs that you know love and cheer for are propped up by speculative investment that’s right people keep putting money into them hoping that one day people will buy jerseys of Faker the same way they buy jerseys of LeBron James it’s not gonna happen it’s been a massive [ __ ] bubble for

Like 10 years for 10 years people have tried to chase the high of Starcraft 2 Esports and a handful of other [ __ ] high points and it just hasn’t happened and it’s not going to happen you just have more of these people investing tons of money into Esports and

Like that’s why you remember like TSM got like uh you know I think it was a hundred million dollars of Monopoly money from FTX they even changed their name for it they basically got married and uh guess what it was all [ __ ] rich people out there in the past said

To themselves hey this Esports [ __ ] could be pretty big yeah and then invested in those orgs in order to give them the cash that they needed to grow the problem is while many of those orgs have grown have developed fan bases and big audiences there’s just one thing

Missing yeah they’re not making money how the [ __ ] do they make money now in order to answer that question let’s do what every Boomer has been doing for the last five years when considering Esports compare it to traditional sports that’s right and the thing is that it’s not a

Boomer thing to compare it to traditional Sports because it’s Esports it’s the same general thing you’re selling tickets selling jerseys selling content selling everything of course traditional sports team like oh I don’t know the future of 2023 World Series champion Toronto Blue Jays makes money in a few ways we’ve got advertisement

Merchandise sales TV deals ticket deals licensing and revenue sharing and with that in mind many people including the early investors and things like the OverWatch league and the LCS thought that they could replicate this model and create what might be a very profitable merchandising and media business the

Problem is that so far it hasn’t worked and with many means it doesn’t work because that’s not how people generate like a lot of the people that watch Esports play the game of that esport and video games fundamentally change over the years like people aren’t playing the

Same video games there were five years ago like 15 years ago you had Halo 1 Halo 2 okay now you have Halo [ __ ] infinite Halo Halo 5. 50 years ago you had basketball today you have basketball we’re not playing basketball all three we’re not playing basketball infinite we’re not playing basketball reforged

It’s the same [ __ ] game and so you’re taking something that is a unique consistent thing which is traditional Sports and then you’re applying it to video games that have a very short shelf life it’s just it doesn’t work in Brands choosing notches title sponsors like that it doesn’t look like

It’s going to work anything just made for casual so with very few exceptions all of your favorite Esports orgs are still riding the high of that venture capital investment yeah all well trying desperately to find ways to make money and paying salaries of players that are probably deservedly very high

And you don’t have to take money oh yeah they’re very high the players get paid a good amount of money they can also win uh win tournaments and get more money that way absolutely for it just ask this guy’s toast toast assembled the ballot roster just before

The recent n a Challengers lcq and after a heroic run from a young team who had really only been together for a month they qualified for challenges that’s a press post with one important question you might find this one familiar and he took it one step further that’s the funny thing they don’t

From that he actually made a YouTube video explaining the entire story of signing this roster from start to finish yeah how we signed the team how much it costs and ultimately how daunting it is to try to recoup that cost as an org owner which gave me two months to you

Know create a new company sign a coach sign five players and hope they have enough time left to practice and win this whole thing and that’s also like and think about how many assumptions that is that’s assuming that the coach is good that’s assuming that the five players one person doesn’t quit

You know there’s not a twit longer on one of them that’s assuming that they will practice and also the big one is assuming they’ll win how hard could that be so with each player costing 5 000 bucks minimum there’s a month is also you know similar

To the okay sure you’re looking at so it’s thirty thousand thirty thousand bucks a month it’s a lot of money it is 360 000 a year that’s a lot of money minimum and again this doesn’t include any others well there’s also like management and Staffing it’s not like just the

Players and a coach yeah through my knee like designers like stuff like accountants and lawyers to look over to your contracts there it is ADD everything up and that’s at least half a million dollars a year oh as you can see from toast napkin math this [ __ ] ain’t

Cheap become more and more mainstream popular the biggest events are massively watched and the players are able to command even more competitive salaries let’s put ourselves in toe shoes and go back to our early example well it’s especially whenever the players also are streamers so like you’re not just

Getting a t a tournament player you’re getting a streamer too like for example Tarik or some other uh you know like I remember shroud was like that like before shroud left Cloud Nine uh or stop playing for cloud nine and Counter-Strike he also shrinked of traditional sports franchises he’s not

Going to be signing any hundred million dollar TV deals anytime soon he’s not a franchisee so he’s not going to be doing any Revenue sharing with Riot so the best that he can hope is to package himself and his team together and sell some ads or make some hoodies and sell

Those right but surely a crater backed orc run by one of the most respected figures in the industry not to mention handsome as hell would be able to eventually turn a profit right for those that don’t know I’m sure most of you know by now I own an Esports org called

Moist Esports and I [ __ ] love it I am extremely passionate about moist Esports but I run it at a massive net loss oh God yep there you go there it is oh [ __ ] I don’t want to get too deep into the nitty-gritty here too deep into the

Weeds and the brass tacks but I lose roughly six figures a month on it it’s just figures a month on it losing about a hundred thousand dollars how can you make up for them no I think that’s fine I think that’s fine because he can monetize a lot of watching the events

And then put the events on his YouTube channel and do further promotion for those events so maybe he’s able to break even whenever you count in all of his like personal monetization of the content as well so yeah I’m just I I think like if if

That’s what I was trying to do that’s what I would do not gross so I’m not sure do sponsors cover that right I think he’s including sponsors how do we make this more profitable for them buy more shirts and it’s fine so yeah I guess you can

See events this just keeps getting worse if you’re not aware toast is of course referring to voice criticals creatorback Esports org more tires yourself says he’s running at a six-figure loss per month yeah I don’t know what their uh what they’re finding I have no idea what

Their financials are I just kind of assumed like I don’t know how they set this up again but what I had assumed is that the reason and how he justifies it is because not not only is he passionate about it but he also can monetize it on a personal level

And and that makes up for it but maybe not some players in rocket League Apex Legend Guilty Gear and smash not even the biggest Esports where the players and staff would be demanding the highest salaries and you might say to me Keith you’re describing two small orgs that

Are backed by individual creators yeah assuredly this isn’t happening with those big words it’s worse with big orgs the bigger the orgs are the more problematic this is because many of those orgs are extremely big because they received a lot of venture capital money that you described earlier that are all

Backed by investment money and Venture Capital well let me tell you about the week that 100 thieves just had on February 7th Tech website digiday published an article in which they interviewed 6X 100 thieves employees about the company’s recent round of massive layoffs in their content creation Department the article

Discusses an alleged internal pivot within the organization one that moved their business model away from YouTube first content creation and Partnerships into a strategy that was focused on creating and acquiring new businesses over the last little while yeah they’ve been doing this a lot and I actually

Think this is kind of a good idea uh you know they did obviously courage and nadeshot they did the uh the backbone which is for phone gaming they have juvie which is their uh their Juice drink and I think that if you incorporate all of those products into

Hundred thieves I don’t know if they’re actually losing money because at a certain point hundred thieves becomes a loss leader for selling those products and then those products make up the difference of my money that they are losing on 100 thieves peripheral company High Ground And of course continue to expand their clothing

And merchandise footprint You Know Hoodie org etc etc the article colors nature they also have foundations I forgot about that yeah that’s the uh the clothing company uh and the company in a little bit of a darker shade than usual it also paraphrases a former employee making the accusation that nadeshot and

Their executive team are prioritizing passion projects like juvie over their traditional money making Partnerships business and this I think that’s a good idea I think nadeshot and them are making the right calls actually I I think selling actual products is always going to be more stable than

Trying to monetize creators uh I think if anything this last two years has taught us that you know anybody’s career could just be over in like a week something like that and also people fall off like how many people from like the Among Us era that we’re getting 10K plus

Viewers now get a thousand well guess what whenever you do that with somebody then you’re not going to make as much money with them there’s so many of them yeah even less exactly is where things get complicated for me because as someone who creates YouTube content in Esports I don’t want to see

Anyone losing their jobs on the other hand I know it’s really sad that people are losing their jobs it [ __ ] sucks uh I mean and I think at a certain point like obviously the problem is that not only is Esports undergoing effectively a re-evaluation of it’s like a revaluation that’s really

What’s happening here is that people are going back and saying is this really worth five hundred thousand dollars is this really worth 2.5 million dollars is a thirty thousand dollar a month cost that returns maybe three thousand dollars is this actually a brand investment after we’ve been investing

Into this for five years and the brand doesn’t really seem to be any better because of it so it’s already going through that and then there’s the multiplier of on top of that you have the economy the economy is in the [ __ ] it’s not doing well inflation is

Massive people are losing their jobs we’re going into a recession so you put both of those things together you know the Esports bubble not bursting but at least showing a lot of cracks and also a global recession and guess what you have people that get laid off it sucks

If nadeshot and his executive team believe that there’s no path to profitability in Partnerships and content creation even if it is more lucrative in the short term then they absolutely should pivot because if they don’t make the change then eventually the whole company will lose their jobs

This content model it’s not a new model you create an org you get some players but I do think that they should make more content on YouTube I don’t want to tell them what to do right I mean like there’s another org owner right what the

[ __ ] are they want to listen to me for but uh yeah I think they should make more YouTube content uh in general I think that if you’re running into a spot where you’re not succeeding look at what you used to do that you don’t do anymore and innovate that to be relevant for

Today players become popular you create content around those players then you try to Apple’s done that multiple times to Brands maybe even stick their logo on your jersey but if that strategy isn’t going to keep up with your 120 million dollars in venture capital investment and 460 million dollar rebellion and I

Also want to say that venture capital investment people have been extremely irresponsible with the type of money that they’ve been investing into these Tech projects like this is actually like one of the more reasonable ones they have been massively irresponsible because the logic that a lot of venture capitalists have is

Take a hundred shots hit one make a billion dollars that’s that’s effectively what their idea is situation and you think that hey what if we sell some energy drinks some hoodies some video games and maybe some keyboards and that will keep up then maybe that’s what you got to do okay so

Before we move on to maybe a few of the Rays of Hope in this Rat’s Nest of a situation let’s do a little recap rich people were like hey cool Esports let’s invest nadeshot did that cool pose with Drake that one time if you remember that

Was crazy how do we make any money off of this face goes public last summer and completely tanks and now we’re all left sitting here going is there any hope well I have two less gloomy paths forward that I’d like to discuss with you enter Ludwig I guess oh winning yeah hard work

Perseverance life liberty pursuit of Dubs the whole nine just Champions over here okay I get it moist is super successful you don’t have any crypto sponsors that’s the selling point right there to burn a lot of money to win that much didn’t Susan give you a lot of money to burn

So you just burn the money like this despite noise literally making YouTube videos recently announced that he had signed on and was going to be a co-owner of the org and according to the man himself yeah this is why he did it I like

Esports I know I talk [ __ ] on it all the time but my ideal Sunday is sitting down having football on one monitor Esports and the other monitor and chess on my main monitor while I tank ELO and watch my favorite teams win or you Ludwig is a

Very smart guy and I’d like to talk to you all about something called vertical integration vertical integration occurs whenever you create multiple paths and ways that you make money into different transitionary periods a profit sorry a product goes through as it goes through development into the consumer’s hands so

Ludwig owns a production company Ludwig also has stake in an Esports company Ludwig also has a media company effectively by being Ludwig so Ludwig promotes the Esports company that then they can use the production company to help produce events for Esports and then the Esports company wins hopefully these

Events and then Ludwig talks about it he’s creating a human centipede but instead of it being three different people it’s just three ludwigs if you go back and you look at a lot of the ways that people made a massive amount of money almost every single one of them made a

Lot of money through being able to completely control the vertical integration of a process whether this is Apple Rockefeller or uh [ __ ] I think those are probably the first two examples of Walmart Walmart’s another one yeah Ford exactly Yes Ford there’s another one go back and look at almost

Every single person that’s been very successful that’s what does it usually lose and this is how he feels that moist Esports could actually make some money but outside of passion and wanting to work with Charlie I also think there’s some possibility that it could make money because I think we have

An advantage that most and again it can make money in the abstract like for example uh you can have think about it like this uh you can have one thing lose money and then two other things gain money and then what’s the average well the average is green that’s how it works

Teams don’t the same advantage that somebody like this guy’s toast would have which is the exact tweet I sent out to him a week ago about the same topic we’re all content creators and in this space where every single venture capitalist group freaks out gushes and comes their little pants at the sentence

Creator economy oh yeah we have a lot of Leverage a lot more than an Esports team like you know well I guess I shouldn’t name any because there might no but you’re definitely right we all know what you’re talking about yeah of course because a lot of these other Esports teams don’t

Have the marketing reach competitors now but like another Esports team who’s not Creator backed yeah it sucks not being able to name drop anymore doesn’t it obviously Ludwig is being optimistic here he’s a big name with a lot of money he’s trying to do something cool with one of his friends

And hopefully they can make some money together yeah but I do think he makes a strong argument there are very few things in this space more powerful than a big megaphone and Ludwig that’s probably the biggest The Voice will now be able to package up their Esports offering with the viewership and fan

Basis of both moist critical and Ludwig and take it to Brands and say hey this is probably something you want your name attached to and the fact is they’re not wrong and crucially he’s also stressing creating products and merchandise and using those big megaphones to sell them something that yeah it’s again

The way that these the the if you’re on if you need to understand how these things make money and how you can make money you need to watch the human centipede and have a metaphysical understanding of that thieves is literally being criticized for that’s right ultimately Ludwig and

Moist are passionate about yes and for me I’m not wrong all this really comes down to there’s not going to be some magical money fairy that comes down and makes this all better well there actually has been and that’s been the problem is that there have been a lot of

Magical money fairies and the Magical money fairies have created a fantasy world and eventually all fantasies end at the end of the day it’s going to take risks from the people that can actually afford to take those risks to make this [ __ ] work out which brings me to my last

And maybe my most important point I think also like it’s about taking risks and trying to innovate and monetize in ways that people previously haven’t been willing to do so or haven’t been able to do so in let’s talk about the role that the developers play in all of this because

Unlike traditional Sports Riot games and the developers that make these Esports titles literally own the product that all of these businesses are trying to build around nobody is putting patch notes out for basketball and that’s a lot more relevant than you might think at first glance the fact is leagues like

The end I mean to be to be fair like NFL and NBA have pretty much top-down decision making right remember that one uh team owner who was caught being racist or something like that and that the NF I think it was the NBA was like yeah you’re [ __ ] out get out and that

Was it so they do have top-down control in traditional Sports too well and the NBA have a rooting interest in the success of their Orcs when the LA Lakers are successful and popular the NBA can then sell that to broadcasters and advertisers and make money Riot on

The other hand well they obviously have a vested interest in Esports succeeding yada yada whatever they’re still going to make money hand over fist selling knife skins to 12 year olds in valorant yeah and it’s not even going to be close they’re going to make infinitely more

Money selling knife skins to 12 year olds whether or not Esports lives or dies so as you can see yeah companies I mean look at Nintendo valve and other developers they’ve got a lot of power in all this and ultimately the question of how and when these Esports orgs make

Money might just come down to the extent to which the developers allow them to profit off of their intellectual property the game well I mean that’s completely what it is I mean and you can look at an extreme example of that as Nintendo look at [ __ ] Nintendo you

Can’t really invest a lot into do any nintendo-based Esports because you don’t know whenever they’ll just randomly decide to shut it down themselves a good example of this is the various Revenue sharing programs that have been built across Esports the recent VCT skin bundles R6 charms CS go

Stickers CDL skin bundles and Street Fighter League Skins are all examples of products that developers have created and sold as a way to infuse their Esports teams and players with Revenue now I’m not saying that these are currently driving enough Revenue to keep an entire org’s lights on but it’s

Obviously a step in the right direction and perhaps this is why Riot games completely rebuilt their franchising model for the VCT where they asked teams for literally zero dollars in stark contrast to the millions that teams had to pay to get into the LCS the OverWatch League back by by millions he doesn’t

Mean 3 million he means 20. 20 million it was nuts in the day maybe the system is somewhat of an Olive Branch from that’s why they had to get the Venture capitalists because and that’s a year I’m pretty sure developers that’s a lot yeah it was [ __ ] crazy it’s obviously gonna

Profit off of the long-term viability of Esports and they don’t want to [ __ ] these orgs from the onset and honestly the brass taxes that’s what this all comes down to from creators like Ludwig to massive multinational corporations like Riot if the Esports puzzle is going

To be solved we need all hands on deck now I know I just kind of spelled out doomsday for you but I’m trying to stay optimistic because there is really something pretty cool here going on with Esports and there are a lot of passionate really intelligent people

Working their asses off to make sure that we can watch simple wield his awp for years to come oh yeah if you want more content like this and I would say um I would also say like for Counter-Strike Counter-Strike is probably the most resistant to these kinds of changes because of how

Ingrained the Esports Community is for it hit the sub button and ring the notification Bell for Unique bite-sized videos you won’t find anywhere else hit us up on our Twitter Instagram Facebook and tick tock all right so there we [ __ ] go I am not a surprise not surprised about

This at all and I think that again it seemed like Esports and all the money that was being invested into it it doesn’t take a genius to look at that and think to themselves Hmm this can’t last and uh CS is going to well not only is

CS growing but uh valorin is growing as well a lot of this stuff has been growing and I think that’s a good thing Foreign