The Excitement Around E-Sports Is Growing. But Where Are the Profits?

“Even with the recalibration brought on by the pandemic, we’ve had full arenas and record viewership,” said Joe Christinat, an Activision spokesman, adding that there was “overwhelming enthusiasm” for the new Overwatch and Call of Duty games. “Our fans want these leagues, and we remain committed to them.”

Investors have also realized that game publishers’ incentives are not necessarily aligned with their own. Publishers can afford to operate money-losing e-sports leagues as long as they drive interest in their profitable video games, so they sometimes prioritize growth over revenue. Riot, for instance, might hesitate to sign a contract to broadcast League of Legends exclusively on YouTube or Twitch because it would preclude viewers in China, where both services are blocked, from tuning in.

Those kinds of conflicting aims have at times led to tense negotiations.

“It’s a push and pull,” said Kirk Lacob, the son of Joe Lacob, who owns the Golden State Warriors. “I’ve had long discussions with various members at Riot over the years.” In addition to serving as executive vice president of basketball operations, the younger Mr. Lacob oversees the Warriors’ e-sports teams.

Kirk Lacob’s point of view is common among the sports ownership groups that have bought or invested in e-sports teams, a list that includes Stan Kroenke of the Los Angeles Rams, Robert Kraft of the New England Patriots and Hal Steinbrenner of the New York Yankees. A former gamer, Mr. Lacob discovered the competitive gaming scene in recent years and was enthralled by the prospect of reaching a young and growing audience. He remains bullish on the industry — but would like to start seeing some results.

“I really believe that where there are eyeballs, where there’s usage, there’s eventually revenue,” he said.

Article source: https://www.nytimes.com/2022/11/26/business/the-excitement-around-e-sports-is-growing-but-where-are-the-profits.html