In recent years, the Esports industry has been one of the fastest-growing ones, and by 2022, it is expected to make more than $1 billion. But there will be problems along the way, as there are in any industry that grows quickly. In recent years, the esports industry has had to deal with some big economic problems, and the ongoing pandemic has only made these problems worse.
Community Gaming, a Web3 platform for esports tournaments, just announced that it has let go of 17 employees, which is just over 17% of the company's staff. The move comes at a time when the esports industry is still having trouble. In the past few months, it has forced other businesses and sports teams to make similar decisions. Community Gaming is still hopeful that Web3 solutions could help esports organizations get through the recession.
Community Gaming's layoffs show that the esports industry as a whole is having trouble. "Because of the economic downturn in the esports industry," said CEO Chris Gonsalves, "we've had to restructure our goals in order to have a stronger future. This meant getting rid of some roles."
Other businesses and teams in the same field have to do the same things. Because the pandemic has messed up live esports events and changed how much money was expected to come in. Gonsalves told the press, "We value the work of all of our employees and will help them continue to be innovators in the space."
There have been other layoffs in the esports industry like the ones at Community Gaming. Many esports teams and organizations have had to lay off employees, cut salaries, or even close down. For example, esports teams have long relied on sponsorship money a lot.
But they are not enough to make money in a market that is going down. The pandemic has also had a big effect on live esports events, which have either been canceled or changed a lot to meet health and safety rules.
Community Gaming's Mission to Solve Esports' Payouts Problem
Even though the esports industry is facing problems, Community Gaming is still committed to its goal of solving the payouts problem in esports. Gonsalves started the company because he thinks that slow and hard to understand payouts are a problem in the esports industry. He wants to be able to pay tournament winners in cryptocurrency more quickly.
Gonsalves told Decrypt in the past, "We want to take away all the complexity that comes with Web3 solutions and give them a competition platform that automatically pays out."
Even with these problems, Community Gaming has grown a lot in the last few months. The company has gone from having about 100,000 users in April 2022 to having about 250,000 users today. Last month, Community Gaming also helped set up more than 600 tournaments.
During that time, more than 21,000 players took part in at least one tournament. Winners of the company's Web3 esports tournaments can get their money quickly. Streamlines the process and gets rid of the need for extra steps or fees.
The Potential of Web3 Solutions in Esports
Even though the esports industry is having trouble, Community Gaming sees Web3 as a way out. Gonsalves thinks that Web3 solutions can help esports organizations build technology that works well with new games whose IP is more open.
Web3 solutions can also make governance and decision-making in esports more decentralized and open, which makes it easier for the community to get involved.
The recent Series A funding round for Community Gaming, which brought in $16 million from big names in crypto like Softbank, Binance Labs, and ConsenSys Mesh, shows how Web3 solutions could be useful in the esports industry. The company plans to use the money to grow its platform and come up with even more new ideas.
The ongoing recession in the esports industry has made things hard for new companies like Community Gaming, but the company is still committed to its goal of fixing the payouts problem in the industry.
Gonsalves told Media that the esports industry is going through a slump. "Esports teams are having trouble finding other ways to make money because they were too dependent on sponsorship money." With Web3 solutions, esports organizations can get through the recession and come out stronger and more creative than ever.
"I think Web3 can help esports organizations build tech that works well with new games that are more open with their intellectual property," Gonsalves said. "However, everyone is having a hard year right now," he said. "After the huge growth we all saw during the pandemic, the games industry as a whole is taking a break, and companies will need to be more careful."
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