The Impact of COVID-19 Recession on Esports Startups



Due to the continuous pandemic (COVID-19), most sports tournaments, such as the Olympic Games, NBA, and MLB have been postponed or canceled completely. To fill the void of competition, many sports organizations focused on streaming competitive and casual games. The esports industry has become the part of the same international economy that is facing the consequences of COVID-19 policies.

Esports organizations and venues depend on many factors, such as ticketing, merchandise, and concessions. Thus, many companies have to revisit their annual budgets to keep their budgets safe from excessive expenses. Since the particular situation influences the esports industry’s players, many esports companies like Dota2bets are susceptible to the negative impact of the economic crisis.

Esports Startups

The esports ecosystem is quite a new phenomenon. No wonder that it has become a host to a great percentage of startups. New projects pop up in a variety of shapes, sizes, and budgets. While a startup can cover many things, it always is an idea-oriented company through which an entrepreneur or a group of entrepreneurs strives to establish a sustainable business model.

Startup equity and debt are usually covered by investors. When the new business idea fulfills expectations and demonstrates the profitability potential, it is able to raise its next investment level. The economic impact on the actual global pandemic boosted the chances of possible failure in the future. In other words, only the strongest startups are about to survive.

Future Perspectives

Even if the esports ecosystem will have to go through huge challenges, there are still great opportunities to be grabbed by the strongest representatives. A number of startups will benefit from increased revenues from their market offering due to the high demand for esports, gaming, and game live-streaming. In addition, an economic recession is always a change for young but perspective entrepreneurs to try out the sustainability of their business idea.

In the United States, more than 500 companies were registered during the recession period, while the value of 50 technologic unicorns was estimated at almost $145 billion. In other words, if things are done properly, the chances of a well-organized startup to survive in the recession time are pretty high.

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