Pause: The e-sports industry is starting to slow.

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On pause

The e-sports world, which was booming before the pandemic kicked the industry into overdrive, is beginning to slow down.

As reported by the NYTimes, owners of e-sports teams — who assemble a roster of talent similar to traditional sports teams — are looking for an exit. Expensive player contracts and waning viewership for some of the industry’s flagship competitions are leaving owners on the hook for major losses.

Viewership figures for the League Championship Series, the largest e-sports league in the US that see gamers compete in League of Legends, have fallen. Data from Esports Charts reveals that fans tuned in for nearly 15 million hours of the 2023 spring season — a staggering number, but one that was down 13% on last year, down 32% on 2021, and less than half of the 33m hours watched in 2017. The season-ending championship event for the game Rainbow Six Siege, known as the Six Invitational, has also seen 2 years of viewership decline, and the same is true of many other games.

Even the highly popular video-game streaming site, Twitch, is now showing signs of stagnation. The total number of hours watched on Twitch peaked two years ago, and has fallen in most months since — though more than 1,700 million hours of content are still consumed every month on the platform.

Boss mode

A significant challenge for e-sports is the misalignment of incentives between team owners, star players and game publishers. Unlike traditional sports leagues, which secure lucrative broadcast deals, content in e-sports is primarily watched for free on YouTube and Twitch, platforms where the individual players can distribute their own content. Game publishers also have competing incentives. They may choose to invest in competitions, but probably only if they see the event generating more sales. The same goes for rule or format changes, which may encourage game sales, aren't necessarily the best for the accompanying e-sports.

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