According to the news that regularly arrives from the world of e-sport, the future looks bright for clubs. In July 2021, UK team Excel Esports collected 20 million euros with a private investment fund. A few months later, in January, it was the turn of the French Team Vitality to announce the crossing of a new course, with record fundraising of 50 million euros over three years. More recently, in July, the American team FaZe Clan, which has distinguished itself in video games Counter-Strike: Global Offensiveeven decided to go public.
The economic reality of the sector, however, no longer seems to correspond today to the promises of expansion of yesterday, many clubs facing heavy budgetary disappointments. FaZe Clan, precisely, shows nearly 19 million dollars (19.4 million euros) of net losses in the first half, and the share price collapsed in a few months: introduced at around 13 dollars, today it is worth less than half. American e-sports group Enthusiast Gaming recorded a net loss of $26 million, while British club Guild Esports, backed by ex-footballer David Beckham, lost $6.1 million. dollars.
Deductibles and massive investments
Some investors see this paradox as a symptom of a speculative bubble and have started to redirect their funds. Creator, in the early 2000s, of the international competition eSports World Convention (ESWC), the Frenchman Matthieu Dallon now heads Trust Esport VC, an investment fund dedicated to e-sport.
Of the 20 million euros envelope that he raised from the Fimalac, Amaury and Française des jeux groups, not a penny financed a team, he reports to the World. “Today, apart from family offices [des organisations privées contrôlant le patrimoine de familles fortunées] of private individuals, there are no more funds to invest in clubs. » This playing field is too uncertain, almost never profitable, notes the businessman.
For Xavier Oswald, co-founder of the event production company Gozulting and business and strategy director of the French team Karmine Corp, one of the roots of the problem dates back to the years 2017-2019. Three popular games – LoL, Overwatch and Call of Duty- have, at the time, seen their official competitions gradually being franchised by their respective publishers, Riot Games and Activision Blizzard. On the model of traditional North American sports, clubs wishing to participate must now pay an entry fee, amounting to several tens of millions of dollars.
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