Esport executives break down the business of esports

by theScore Staff Jan 29 2017
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Esports is no longer the small-scale enterprise it once was. In 2016, esports were valued at approximately $892.8 million and are expected to skyrocket above $1 billion in 2017, according to a market report by SuperData. Esports Heaven's cyanesports spoke to senior members of three esports organizations to get their take on the numbers, and the business side of the industry.

With over 200 million unique viewers last year, it comes as no surprise that more esport organizations have formed. As a result, more games have become competitive esports.

But how do organizations decide where to invest their money?

"In the early days it was more about what you liked playing than about business," Jason Lake, CEO of compLexity Gaming, told Esports Heaven. "I started complexity because I loved Counter-Strike and saw a future for it."

OSC-Root started out much the same way. "We've only had games [that] I play and like," co-founder Paulo "Catz" Vizcarra told Esports Heaven. "We do StarCraft because I like the game and see a value in spreading it; it's taught me enough that I like sharing through it."

Before Twitch, the love of games was the axis upon which esports rotated. While that may still be the case for some organizations, passion has taken a back seat to business due to rising saturation within the industry.

Splyce has fallen on the side of business and owner Marty "LazerChicken" Strenczewilk broke down the logic behind the organization's decision-making with Esports Heaven.

"Viewership, growth, league structure, monetization, exposure for our brand, developer relation, location and what players/teams are available, will we be able to win," Strenczewilk listed. "It also, of course, depends on our budget and what other games we are already in."

Both Lake and Vizcarra agree that financial decisions have become increasingly important with the massive growth of esports.

With the reputation of Splyce, the durability of coL and the shaky-yet-consistent presence of Root, new organizations can see three distinct paths to esports success. As Lake explained to Esports Heaven, though, sometimes the best decision an organization can make is bowing out.

"When a scene's costs surpass the return and viewership is in decline, a game has peaked and is in danger of becoming part of esports history," Lake observed.

"Many of us who genuinely love the games do our best to stay loyal to different titles but sometimes the economics dictate exit strategies."

Kristine "Vaalia" Hutter is a news editor for theScore esports. You can find her on Twitter.