COVID-19’s Impact on the World of Esports

The COVID-19 pandemic is seeing most esports events postponed or called off. While the ‘e’ in esports ensures that most of it can continue uninterrupted, international competitions are being cancelled. After all, servers aren’t powerful enough to host gamers participating with an ocean between.

The long-term success of most major esports is directly tied to their long-term viability as revenue-generating properties for their publishers

While the number of players in almost every esports game have increased, collectively, their purchasing power has gone down as many countries are seeing their currency devalued because of a shrinking economy leading to lesser disposable income. Thus, in spite of its digital advantage, the esports ecosystem is also seeing an impact.

Event Cancellations

Esports organisations that are normally busy with big events all year through on a global as well as a local scale, have had to push back in order to survive. The reason is that any event on a large scale will need physical participation, which isn’t currently possible.

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Riot Games cancelled its Mid-Season Invitational (MSI), the company’s second-largest annual international League of Legends competition. Initially, the event was postponed, but seeing that the teams are unable to travel internationally for the competition, they were cancelled.

Blizzard Entertainment also announced calling off of the 2020 edition of BlizzCon, the company’s annual fan gathering celebrating its staple games like World of Warcraft, StarCraft, and Overwatch.

Layoffs

Meanwhile, COVID-19 has forced Activision Blizzard and its flagship esports property, the Overwatch League’s Vancouver to release the entire roster and coaching staff.

OverActive Media, the parent company of Toronto Defiant (Overwatch League) and Toronto Ultra (Call of Duty League), had to lay off up to 13 employees.

“This has been a tough day. We’ve had to make some very difficult decisions, affecting very good people, in order to ensure our organisation is well-positioned to continue to thrive in these challenging times,” OverActive Media Head of Content and PR Paulo Senra told The Esports Observer in a statement.

Esports Resilience

In spite of delays and cancellations, esports resilience on the face of the pandemic is strong. For example, in a time when many smaller esports organisations are announcing layoffs, shut downs, and scaling back operations, Panda Global (PG) has brought on five new full time staff. Organisations like PG and Tribe Gaming, with a focus on mobile gaming, have found a niche within their space and hence have been going strong.

Live events might be suffering in esports because of the pandemic, but video game revenues and active users are on the rise. Activision Blizzard reported a US$505 million profit for 2020’s first quarter, an increase of 13% than the same period of 2019.

Their game, Call of Duty: Warzone, launched on March 10, went beyond 60 million players in the first two months. As The Esports Observer says, “The long-term success of most major esports is directly tied to their long-term viability as revenue-generating properties for their publishers.”

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Similarly, Valve Corporation’s one and only esports competition, The International (TI) has been pushed back to 2021. However, its unique crowdfunding tool, which taps 25% of sales to the TI prize pool, is still going strong. In fact, the 2020 Dota 2 Battle Pass has scooped up more than US$10 million in less than 72 hours after its release. That’s higher than any previous Pass had accumulated by this point.

These are difficult times for any business ecosystem, and esports isn’t an exception. Still, the ecosystem is foraying into different directions while taking advantage of its digital nature.