The investment hype surrounding esports is looking grim (for now).
Although esports was once a thriving sector in gaming, concerns about profit have led to investment firms moving elsewhere.
According to Drake Star Partners, Michael Metzger, only 33 of the 695 private gaming investments made in the first nine months of 2022 were esports deals. And it equated to about $330 million, which is a massive decrease.
In 2021, 138 esports deals (worth 2.1 billion) took place out of the 718 private gaming financings.
Where is Esports Money Headed?
Portfolios of large, gaming-focused VC companies like Bitkraft Ventures are focused less on esports and more on the blockchain. Esports and gaming seem to be on a collision course.
We’ve seen several companies be formed at their intersection and a few athletes get involved as well.
Esports is now anti-sexy for VCs who were burned by the hype surrounding esports startups and their high valuations a few years ago,” says Ben Goldhaber, an esports veteran.
The big picture:
Although esports is enjoyed by millions, it’s still a young alternative sport that doesn’t have the crossover stars or lucrative rights fees.
Companies that create the most popular esports game are the ones who own them. Activision, Riot, and others make the most money.
The question has become… “how can you make money if you’re not the game publisher?”
While all of this is taking place web3 is intermingling with gaming at the World Cup.
