How Esports Companies Are Being Impacted by the COVID-19 Pandemic

How Esports Companies Are Being Impacted by the COVID-19 Pandemic

video games lawyer

How Esports Companies Are Being Impacted by the COVID-19 Pandemic

1000 648 David Hoppe

As the COVID-19 pandemic has raged across the world, millions have been stuck at home due to physical distancing policies and job layoffs. Like nearly all sectors of the economy, the esports industry has had to make changes to adapt to the new environment. In a recent report, The Esports Observer (TEO) studied the potential impacts of the novel coronavirus on the esports industry.

As we wrote in our post about video game playtime and sending, both of these data points have soared since the start of the COVID-19 pandemic. In the US, for example, 39 percent of people said they were spending more on video games. As a result, game publishers are likely to see increased revenues for this quarter.

SuperData estimates that gaming revenue for the week ending March 15 hit three-quarters of game revenue during the Christmas season. That bodes well for publishers like Activision Blizzard, Electronic Arts, and Ubisoft. According to TEO, these three companies said in their earnings statements that they expect increased game revenue as a result of stay-at-home orders due to COVID-19.

As tournaments have gone online, streaming services have experienced skyrocketing viewership numbers and increased revenue. According to a report from StreamLabs and Stream Hatchet, Twitch surpassed 3 billion hours watched in a single quarter. Not only is this figure a record for the company, but it’s also a rebound from the company’s 2019 fourth-quarter slump. YouTube Gaming and Facebook Gaming also saw an increase in viewership for the quarter.

Chinese streaming platform Huya, meanwhile, expects its revenue to grow 45-47 percent for the quarter compared to the same period in 2019.

Short-term revenue for game peripheral manufacturers, such as Logitech and Turtle Beach, is expected to increase as well, as consumers order more gaming accessories.

Unfortunately, TEO reports, a number of esports companies will be negatively impacted by the pandemic. Companies that own esports teams have seen sponsorship and live-event opportunities run dry. While some companies, including Enthusiast Gaming and Simplicity, have cash reserves, others, like Astralis and Team Reciprocity, have been hit hard by the situation.

Tournament and event organizers have seen even greater losses. Live events are likely to remain canceled for the foreseeable future. For example, MTG has been forced to lay off staff as a result of the pandemic. TEO adds that other companies that could be negatively impacted include Allied Sports Entertainment and GFinity. and the Modern Times Group.

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David Hoppe

All stories by: David Hoppe

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