Is The Guard's fall the "Start of the End" for Esports?
The American Esports Organization The Guard has laid off 90% of its employees. The list includes the content, social, talent, and creative teams. Amidst the falling viewership numbers, multiple esports layoffs, etc., the Guard laying off adds fuel to the "Esports winter" fire.
Who is The Guard?
The Guard is an Esports organization under Kroenke Sports and Entertainment. Stan Kronke founded Kroenke Sports and Entertainment back in 1999. The holding company for multiple Sports teams, including Denver Nuggets, LA Rams, and Arsenal FC. They ventured into esports with the OWL team LA Gladiators, following up with LA Guerillas in CDL and a Valorant division competing in the Knights NA Challengers.
Last night, multiple Guard employees reported they were laid off. This includes Hunter(@HUNT2R) of Esports Talk News(@EsportsTalkNews).
With the Guard layoffs, They join the list of Esports organizations that have partially or entirely seized operations due to failing economic conditions.
Unlike most esports organizations founded by Esport personalities and then got funding, The Guard is a subsidiary of Stan Kroenke's holding company. The holding company has a history in traditional sports, which was why the incoming layoffs blindsided employees and the community.
While getting off a failing business is fine, The fact that the Guard employees received no intimidation regarding the layoffs. Moreover, the Guard was actively hiring and requesting employees relocate to work, which worsened it. The situation especially sucks for employees recently joining the organization.
What's going wrong with the Esports Industry?
Esports has been on the rise since 2013, with the prize pool reaching 1 Million dollars for a while. But as the prize pool increased, so did the player salaries and cost of running a team. And better players meant better salaries, eventually inflating the player salaries.
Moreover, as more teams poured in, the player salaries and the staff increased, and the tournament prize money was insufficient to field the roster.
The money needed to run the team eventually fell into Sponsor money. With more sponsors, the player's salaries increased once again. With good salaries, Esports started looking like a viable career option leading to more players and investors pouring into Esports.
But after reaching its peak in 2019, Esports has been stale, especially as the viewing numbers are falling. This led to a lot of speculation about the "Esports Winter." The money was still pouring in, but organizations did not make enough money.
Amidst other sponsors, Esports relied primarily on Crypto sponsors. When the second-biggest crypto exchange in FTX fell, the Crypto market crashed, and one of the most significant sources of money for Esports organizations failed.
With investors pulling out, more and more organizations started laying off employees. Multiple esports organizations either shut down a single division or just declared bankruptcy. Optic, Team Liquid, Faze Clan, 100 Thieves, and Order were affected.
Now an esports organization backed by a traditional sports holding company laying off employees, the speculations of the Esports winter are real. Additionally, the recent problems with 100 Theives. Faze Clan and TSM does not help with the current atmosphere of Esports. While there are multiple organizations, especially the legacy orgs who have a solid foundation and continue to invest into esports but apart from them, things are looking grim for Esports Industry and the Esports Winter in Coming...
Image Credits: The Guard
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