The hype around esports is fading as investors and sponsors dry up

Esports players kick off the League of Legends College Championship in 2017 in Santa Monica. But after a boom five years ago, several prominent esports teams and organizations, particularly in the U.S., are contracting, the result of a broad economic downturn, a venture capital industry that’s no longer willing to accept growth without profits and a crypto meltdown that has undercut a significant source of backing. “We have been operating our esports teams at a loss since inception,” said Ben Spoont, founder and chief executive officer of Misfits Gaming Group, who sold the organization’s slot to field a team in the League of Legends European Championship in July. Some sponsors have turned their attention to increasingly popular gaming influencers — namely Twitch streamers and YouTube creators like Tyler “Ninja” Blevins — who are better-positioned to capitalize on viewers’ attention than esports teams focused on competing and winning tournament prize pools. Misfits’ Spoont said selling the League of Legends European Championship slot was part of a strategy to expand the group’s emphasis on partnering with top creators like Minecraft YouTuber Toby “Tubbo” Smith and “QTCindarella.” Influencers are also a better bang for the buck than esports teams, whose players’ salaries can be as high as seven figures.