
The credit crunch may well prove to be fatal for a young and most of the times naive business such as eSports.
Earlier last week, it had been Pfizer to cut 19,000 jobs, Philips to axe 6,000 employees and Fiat to threaten to show the door to a total of 60,000 workers.
On Thursday, it was Meet Your Makers to announce 21 job cuts.
While most of the community may not believe there is any connection between these incidents, the truth is MYM's shock announcement just goes to show how fragile the e-Sports business really is.
While, for example, football clubs rely on sponsors, advertising, gates, TV rights, player sales and private investors, the majority of eSports' organizations can only count on the support from sponsors - which, in the grip of recession, always tend to engage on cost-cutting moves - to finance their operations.
AMD, for example, which supports the likes of SK Gaming and x6tence and made headlines in December when it announced it would no longer continue sponsoring mTw, has confirmed it will cut 1,100 jobs and impose temporary pay cuts to respond to "tough business conditions".
So how long do you think it will take before other companies start cutting sponsorship deals?
Not even the tournaments can dodge this bullet. The ESWC can no longer count on NVIDIA - which announced in late 2008 it would cut its workforce by 6,5 % - as main partner, while the WCG has seen Samsung's support weaken and will hold no European Cyber Games this year at CeBIT.
And even the ESL - touted by many as the main pillar of eSports nowadays - seems to be suffering the effects of the financial climate. In fact, the ESL has yet to pay the prize money of the European Nations Championship and the Extreme Masters Global Challenges.
Furthermore, it has been confirmed that the EPS Scandinavia Finals have been postponed because of "unforeseen and uncontrollable circumstances." A rearranged date has yet to be announced.
When looking at the seven members that compose the G7 federation, one can see that three of them - Meet Your Makers, mousesports and Evil Geniuses - proudly exhibit Intel as partner.
In fact, the U.S. company is also the ESL's head sponsor. So can you even picture what would happen to today's eSports should Intel - which announced last week it would cut up to 6,000 jobs - go bankrupt?
Oh G7, Where art thou?
And where is the G7? That same federation which, in April 2006, announced its creation with a speech so heroic that made even the most skeptics shed some tears.
If the G7 is alive and kicking, then how come no measures are taken, meetings arranged and decisions announced? Practically nothing of the "cooperation with leagues and tournament organizers" has been translated into tangible material.
The community needs some answers from those in power and nothing better than hearing from the G7 to give people some peace of mind.
But the federation seems blind, deaf and mute, completely oblivious to a situation that has escalated and seems to have no light at the end of the tunnel.
In truth, the G7 just watched from the stands while MYM offered Warcraft III players the highest wages in the business knowing that no other non-Korean organization would be able to match such financial power.
And now that MYM have discarded the Warcraft "millionaires", the other organizations are left reaping what MYM sow. You almost must feel sorry for the teams that sound out the likes of Grubby and Moon, only to be deterred by their asking wages. No offense, but no-one likes to go from a Ferrari to a Fiat Panda.
Will E-Sports live through 2009?
One cannot help but think that something is wrong when elite Counter-Strike and Warcraft III players are without a home.
And 2009 will most likely bring many changes to several organizations, with some folding and others unable to put together the financial package required to retain the services of their players.
This means that those with hard cash ready to be spent will find themselves kings in a kingdom built on shaky ground.
For the record, I am not saying eSports will disappear or their days are numbered. But the truth is that the future looks as dark as Batman as every organization now faces a daunting task: a battle not for growth, but for survival.
Some analysts suggest that a period of recession is ultimately healthy for an economy. I agree, for it is in such moments that one realizes his mistakes and what has been done wrong. Sort of a reality check.
The organizations need to rethink how business is done and, as Mark Peter Fries said, they need to "look upon further cooperation and collaborations" - and that's exactly where the G7 should enter - as the "survival of the fittest" metaphor will prevail.
The yearly calendar has just lost its first event and, by the looks of it, more could follow. And so we enter a vicious circle: with less sponsors, we have less events, which means sponsors have less opportunities to show off their brands. Therefore, less sponsors.
eSports today may be weaker when compared to two years ago because of the financial climate. However, if the involved parties are able to cope with the current crisis and find new ways to do business, then tomorrow will only bring a stronger eSports.
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(last year)
#1
RESTINPEE |
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Well done stating the obvious
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(last year)
#2
The1Crow |
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Such a great article with a lot of truth...
Some ppl come into our lives and quickly go. Some stay ever!
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(last year)
#3
VisarkA |
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MTG <3 thats a good enchantment lol :D great article
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(last year)
#4
StreeTo |
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You got the point MIRA, I am wondering what is going to happen with KODE5 tourneys as they have announced so many qualifiers and therefor a lot of money to be spent....
www.gravitasgaming.net
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(last year)
#5
flyy90 |
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ye not bad article ;}
I Go Harder
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(last year)
#6
angelexian
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Survival challenge, seems Esports is on the brink of extinction XD....
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(last year)
#7
angelexian
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As Rachel would put it in the Dark Knight, "have faith in people". Have faith in the sponsors... I hope Esports will have a happy ending. If they can't keep it up.... GG no re.
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(last year)
#9
hancu |
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hmm i have a couple of criticisms to your article/opinions. so first off don't even try to make an assumption that intel would go bankrupt coz it's out of the question. it provides so many jobs for people that it would be impossible for the government to let them collapse. obviously it's a recession and in short words that means smaller demand, subsequently smaller supply which leads to people getting less money and companies offering fewer jobs. it's a natural cycle of the economy and it's not the first nor the last time events take such a turn.
with the previously mentioned conditions companies might cut back on sponsorships. probably some teams or tournaments will get disappointed but surely not all of them. the top teams which have assured a long-lasting relationship with sponsors won't loose anything. Companies sponsor in order to market themselves; well the basic idea is that successful companies are the ones that invest in marketing during a recession, so that they can (according to a recent McKinsey report - check it out on FT.com) collect the gains when the market starts revitalising itself. on another point of view maybe this can be taken as a sign of alarm. we (as in the gaming community) have high aspirations for the development of our industry yet there's only a handful of people out there actually making a difference .maybe teams should try to solidify their basic structure, and work more as companies and less as esport teams; take advantage of their main assets, such as pla btw if you're not pleased with g7 ask your boss what the hell is going on and why isn't he doing anything; it's useless to point out fingers as the g7 cannot move mountains. i really think that people like bds, jason lake, mercy and everyone else out there in the first lines are doing a good enough job at the moment. general conclusions: good article, i totally respect your views yet i feel that it's exaggerated, unfounded and maybe a little bit of lacking factual support. please don't take it as an offense, it's just my personal point of view -
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(last year)
#10
MIRAA |
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First off, I'm not making an assumption that Intel will fold, it's just for people to realize just how dependent on sponsors the organisations really are and that's probably why we are where we are right now. If, for example, Intel decides to stop sponsoring eSports, or even if it folds - just picture it, as I said - can you imagine how it would affect eSports?
My opinion on G7 is written in the article, I don't have to talk to my boss like you say, first of all because he is not the only one there. By that I am not saying he is the only right man in an organisation filled with wrong people. But this is my opinion and, if it changes some things, then I will be happy with it. Last edited by MIRAA at 02.02.2009, 16:10
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(last year)
#11
JohnnyB-122
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#9, I totally agree with you that this article is exaggerated, unfounded and maybe a little bit of lacking factual support.
it's easy to write such topics in these times. but in fact the writer does not know any valuable information. | |
(last year)
#13
Lun-
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sound sad
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(last year)
#14
Zechs
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Nice read, if somewhat depressing. One of the things i think we might see, and have already to some extent, is the revival of online competition. It's not ideal, but it's cheap and promotes a regular season - something esports (with the exception of WC3) has never really had since the fall of CSCL/Eurocup.
Writer of The Zechs Files at sk-gaming.com
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(last year)
#15
dunn |
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.
Last edited by dunn at 02.02.2009, 23:08
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(last year)
#16
Flex- |
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i remember that G7 was foundet on the strongest teams up to date, kinda wanna ask if mym is supposed to be in the G7?
Sup?
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(last year)
#17
imperator-xy
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nice article, but my opinion is a little bit different.
i think esports will stop growing and have a hard time for some months or even a year now, but after this it will continue growing like it did the last years. maybe it will be even faster. and btw. if starcraft 2 is the game we all want it to be it could save esport i think | |
(last year)
#18
Say_Maki_Pls |
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I think we need to go to mars and live there...
now, earth sucks @@ | |
(last year)
#19
drinn |
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You don't have to fear for eSports, because you don't have to. And it's NOT "economy crisis" fault that MYM got job cuts, it's the organization's own fault. Having more than 200 people @ the staff (obviously not all of them are contracted (?), but probably quite a big share of it) tells enough how badly the organization is doing "the magic", if other organizations can do the same thing and 1000x times better at the same time with nearly 15-20 people or less. And obviously not all of these 15-20 people are contracted, just the key members.
If you fear the economic crisis, then it will hit you. But if you don't, then it will not hit you. Spreading fear is completely ridiculous and not acceptable. For example our local media keeps naming a light financial downturn as a high recession all the time. It looks like they want a crisis to happen. And this article is basically doing the same thing to global eSports scene. Just ignore the so-called "economy crisis" and continue living your own life. | |||||||||||||
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The economic crisis is quite over-rated in my opinion. Ofcourse, the economic is lower than it have been for quite some years, but the media is scaring people, and thus people will keep an eye on their wallets, which will result in an even worse economic status. The key to a good economy is that the money keeps rolling, people just have to spend it.
Esports will never get near extinction, until everyone throws away their consoles. If the crisis actually hits, the paid/contracted eSports people will have to chew on a piece of wood for a while, and we'll find out who really love esports and who do not. www.fnatic.com
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(last year)
#24
iD-Virtuoso |
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Hmm..
let's hope Obama loves playing games. :D Meet me @ Garena: iD|Virtuoso
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well i just had to comment on this1. first of all i agree with article and with #9 completly and i just may add for some of u that just said that we can simply ignore economic crisis: ''Its not easy to ignore it everywhere in world. For example, today i heard that one of my teacher's friend from Germany had to sell his 2nd car... o_O
HELLOOO here in serbia it is common for many families not to have car and that is the way of living that has brought this crisis to us. I mean why u need 2nd car or another house or all new fancy stuffs? Bcs of cool look or some elite friends? Well if u knew how to spend ur monney [and here i mean to the most of WE and US] we wouldnt be in this crisis. And finaly for EE and most of Asia and i think whole Africa this is just a normal development of things in eSport and world economy''... peace best regards looser990 p.s. longest reply in my life :) Last edited by looser990 at 02.02.2009, 20:15
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(last year)
#27
IMsososoRRY |
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exaggerated
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(last year)
#28
weenus |
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Very valid article, it's a growing concern and I think a lot of people know about it but aren't acknowledging it. However, a problem that is equal in size for the well being of eSports in the community and it's attitude. Perhaps it's only the American scene, but I truly believe a lot of the eSports readers and community members no longer want eSports to succeed and grow. They want it to stay the same tiny size of teams playing each other Online for nothing, just so they can spec HLTV and complain on forums. People don't seem to want to see eSports expand or take that next step anymore, they would rather troll and flame than support and nurture.
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(last year)
#29
MrOw |
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it's already a quagmire...not fear for esport...esport as far as im concerned is fucked until new stimulus comes out...such as sc2...
also the asian scene is somewhat reclusive in terms of world e-sports growth, they are not exactly helping... I Feed On Your Tears <3
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(last year)
#30
fams |
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"as the "survival of the fittest" me
I think if people spent their money smarter instead of just throwing a lot of it around as 'power' then the E-Sports situation would be better off. http://www.friesport.com/?p=168 Mess with the best die like the rest
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(last year)
#31
LastDance |
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It wasn't just MYM who screw over competitive WC3. SK deserves a share of the blame too. They encouraged the salary problem by accepting the demands of the former Korean World Elite pla
The good news is, there has always been a lot of talent that had been over shadowed by the top tier pla | |
(last year)
#34
Mista_Masta |
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Very intersting article and a nice read.
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(last year)
#37
hancu |
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there's a clear need for a second stage of the article :) i'd propose a suggestive ti
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Back to playing board games I guess.
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(last year)
#41
XATMO8G
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Sigh this recession is really affecting esports. Lets hope obama does something to improve it. In any case, I don't think esports will die out. The games right now might, Wc3, CS and maybe even DoTA but once the recession is handled SC2 will come out and just own.
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(last year)
#42
baesjen
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Oh brother, where art thou?
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(last year)
#51
hellstar |
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Despite economic downturn, I will buy a copyright of SC2 to support gaming industry :(
DOTA COLA !!!
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(last year)
#54
roskii |
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Quoting drinn: LOL drinn oh drinn.. You always seem to amaze me. This financial crisis is real, wake up and realise that many companies around the world are in a huge amount of s**t, and quite a few of them have taken the plunge already. You need to accept that even if it doesn't affect you directly, someone you know has probably just been retrenched, or have had something repossessed. You are living in a fantasy world and I really hope one day you understand the true impact of economics on your life, because right now your heading down the wrong path. crafted from the souls of gods.
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(last year)
#59
J1mmy22
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nice read, will read again
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(last year)
#60
Der_Spotter
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HAHA INTEL GO BANCRUPT HAHAHAHAHAHAAA :D:D:D NICE JOKE!!!
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if just all would notice that esports is more than a game :)
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(last year)
#62
drinn |
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Quoting roskii: Oh really? I DIDN'T KNOW!! Better to live in a fantasy world than trusting all what the media is saying. This financial crisis has mainly hit to industry markets like they have always did before, and has always survived from the disasters. This time it's just a little bigger and will take more time to complete full recovery. I'm working too, but luckily I have selected a safe career. I don't have friends, who have lost their jobs due to this crisis, but it's quite normal that someone loses a job at some point. You always find new jobs. Last edited by drinn at 08.02.2009, 13:04
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(11 months ago)
#63
SoloZ |
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Great analysis and substantiation
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(5 months ago)
#64
sndmon |
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One of my favorite articles :)
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