The spread of coronavirus disease (COVID-19) affected the whole world, even the online gaming industry. While many people had to stay at home, they started looking for different forms of environment. Thus, eSports experienced a rapid rise in popularity marked with a volume jump of 71%.
In fact, the eSports industry isn’t immune to the economic issues. Over the last century, you can hardly think of an infectious disease outbreak that affected the stock markets as strongly as the current pandemic. In this post, you will have a great opportunity to check the companies in the eSports sector that are publicly traded.
Modern trends caused by COVID crisis
The United States stock market index Dow Jones Industrial Average lost almost 35% at the provisional top of the actual economic crisis. While the index only involves 30 large stock exchange-listed companies, the current situation is influencing all types of businesses directly or indirectly. In the eSports environment, three main tendencies occurred as companies are trying to adapt to the new circumstances.
Reducing Costs of Conducted Activities
Several eSports companies like https://csbet.gg/en took special measures aiming to cut costs of activities and counteract the loss of revenues. Team Reciprocity, which is currently aiming to demonstrate a reverse takeover (RTO), is publicly listed on the Canadian TSXV exchange.
Moving to the Online Format
While the games played at eSports competitions are originally played online, most big competitions mainly take place at a physical location such as an arena or a studio. As a result of the COVID-19 policies, most tournaments and competitions were checked in the online format to minimize possible risks of participants.
CS:GO developer Valve and eSports organizer ESL introduced a new online competition known as “ESL One: Road to Rio.” It will be the official qualifier for the CS:GO in Rio de Janeiro Major in November. Another also, there is CS:GO format of the DreamHack Masters, which was supposed to be conducted in Jönköping, Sweden. Most long-format eSports divisions such as the Overwatch League, Call of Duty League, and League of Legends have regional championships including the League of Legends European Championship (LEC), League of Legends Championship Series (LCS), and League of Legends Pro League (LPL). All of them were changed into an online format.
Sports Tournaments Joining In
Most eSports competitions decided to be online in a matter of time. Eventually, they joined a few sports companies to fill the void of sports events. NBA organization Phoenix Suns started arranging its regular season plan by simulating the games in Take-Two Interactive’s NBA 2K game. Also, Formula 1 organized a racing simulation series instead of its regular schedule in which some F1 and other motorsports drivers are involved. In addition, a great number of various sim-racing competitions were organized to observe the participation of racing drivers, athletes, and celebrities. These include the NASCAR exhibition that is broadcasted on linear TV station FOX Sports.
COVID-19 Is Forcing Markets to Adjust
Generally, lots of entities in the eSports ecosystem are able to adjust their business activities to the new situation in the world. With a few industry’s niches outperformed the whole market, some special measures need to be implemented. The eSports sector does not have a benefit from the pandemic situation so that the companies have to handle the challenges associated with remote work, lack of live-events, reduced sponsorships and media rights sales opportunities, etc.
Over the last several weeks, the consequences of COVID-2019 started being estimated. The world of eSports has become one of the few industries that by the specificity of its operations can adjust to the existing situation without much effort to be made. Thus, many players within the industry have a unique opportunity to benefit from the current global situation and unclear developments in other industries, especially the sports and entertainment industry. While they are sitting at home, they can do their favorite thing. Of course, the range of available can be limited, but it is still better than nothing.
Specific categories within the eSports environment are facing immense struggles such as tournament organizers and eSports venue operators. Recently, they have demonstrated a considerably worse performance compared to the general market. This factor needs to be considered when the situation looks hopeless to you. In addition, many not publicly-traded eSports companies, especially startups, are dealing with existential risks. This includes a lack of available risk capital.