Postponed or cancelled tournaments, online leagues instead of LAN tournaments – the effects of the Corona pandemic on esport can be found everywhere. But what does this actually mean for the industry? New figures give an insight into how badly it is actually affected.
An example of the damage caused by the pandemic is the MTG Group. The parent company of both DreamHack and ESL has now published an interim report on the effects of the corona virus.
MTG update on esports (ESL/DH) business came out today re: COVID-19:
– 25% y/y revenue decline Q1
– 35-45% y/y revenue decline H1
– ESL/DH to reduce costs by $15mm
– Board continues to plan separation of gaming and esports businesses pic.twitter.com/Cgt0oy1idV— Tomi (@tomi) March 25, 2020
Plummeting turnover
The MTG Group is expecting a 35-40 percent drop in sales for the first half of 2020. Already for the first quarter, the company anticipates a minus of 25% compared to the previous year. In order to counteract the misery, both ESL and Dreamhack will reduce their fixed costs from the second quarter onwards.
In the report, however, the group also emphasised that it is in a solid enough position to compensate for the losses. Nevertheless, it is clear that tournament organisations have been particularly hard hit by the pandemic – especially ESL. Not only did it have to convert the Dota 2 Major in Los Angeles to an online format, but the CS:GO Major in Rio de Janeiro has now been postponed until November.
MTG is counting on the situation to calm down again in the second half of the year so that tournaments and events can be organised again.
Even professional teams under pressure
But it is not only the organizers who are struggling with the current situation, the professional teams also have less financial leeway. So only yesterday (25.03.2020) the Chaos Esport Club released its complete Dota 2 team.
Today we unfortunately have to announce the release of our Dota 2 Roster.
If you are an organization or sponsor looking to work with the team please contact their manager, @KBBQDotA , directly via [email protected]
Read More: https://t.co/XEcRsvMP54 pic.twitter.com/mCDADnvAXx
— Chaos EC (@ChaosEC) March 25, 2020
In its statement, the organisation explicitly wrote that the pandemic is forcing it to restructure. Due to the temporary suspension of the Dota Pro Circuit (DPC), the organisation was now forced to take this step.
Greg Laird, CEO of Chaos, continued: “This was not an easy decision for us. But in uncertain times with a suspended DPC it is impossible for us to justify the cost of a Dota 2 team. The world is in an exceptional situation and we are forced to focus our activities on selected key projects to ensure the long-term success of the organisation”.
Although the organization promised to support the team in their search for a new home, this will be of little consolation to the North American professionals around Yawar “YawaR” Hassan.
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