Reality Challenges Optimism in 2024
THE ESPORTS ADVOCATE
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It's tough to turn the page on 2023 when mass layoffs and closures continue in 2024.
It has been a tough couple of weeks in gaming as Twitch and parent company Amazon, Discord, Unity, Google, and others announced big layoffs this week. While some in the tech and gaming sector had hoped to turn the page on 2023 and the mass layoffs that happened, there are more to come in 2024 as the global economy puts its finger on the scales of all businesses and shareholders seek austerity measures to maximize profits and avoid losses.
That belt tightening and cost cutting will continue in the first quarter of 2024—we imagine—for a number of reasons, including dire projections like this one from the World Bank. - James Fudge
Top Stories
Twitch CEO Says Platform is Not Profitable
After laying off around 500 employees—or 35% of its workforce— this week, Twitch CEO Dan Clancy said in a follow-up livestream that the Amazon-owned streaming platform was not profitable, but that its parent company is still bullish on it as an ongoing business unit and will continue to invest heavily in it. It's not really a great shock that the platform isn't profitable, though the public wouldn't know that because Amazon does not break down spending and profits of Twitch in its quarterly reporting.
“I’ll be blunt: we aren’t profitable at this point,” Clancy said. “Amazon has been extremely supportive of Twitch. Big thing for being sustainable over time is ensuring we don’t lose money. That’s a big part of my job because that’s going to be what makes sure we can be here for the long term.”
Clancy also noted that Twitch is done paying millions of dollars to retain high profile content creators as it did in the past.
“The cost of retaining those streamers would have been far more than the revenue generated from them,” he said. “That is something we’ve been very clear about. We don’t want to do that.”
Edward Craven, the co-founder of gray market gambling and casino company Stake, Primedice, and live streaming platform Kick, said in public this week that he looked forward to buying the platform. Clancy noted in his livestream that Twitch isn't for sale. Given that Kick's financials—including where its money actually comes from—are not publicly disclosed, it's unclear how the company could generate the tens of billions of dollars it would take to acquire such a property…
LEC, LCS Reveal Partners
It was the start of the LEC this weekend, but Riot Games spent the week touting its returning sponsors and partners for the LEC including Kia, LG Ultragear, and KitKat, among others. LCS also announced Kia, HP, HyperX, Omen, and others as sponsors for 2024 (Kia also announced an expanded partnership with NRG Esports).?
Partnerships aside, the LEC Winter Split 2024—which kicked off this weekend at the newly revamped studio in Berlin— saw a record-breaking opening day, according to EsportsCharts. EsportsCharts reported a peak viewership during the first day of roughly 556K during the 2023 Winter Split finals between MAD Lions and G2 Esports. We expect a full breakdown of this viewership on Monday.. Riot's Director of League of Legends Esports - EMEA Maximilian Peter Schmidt highlighted the milestone on Saturday.
Layoffs Hit Discord
Gaming-focused instant messaging and social platform Discord has laid off 17% of its global workforce, or roughly 170 employees. The news was delivered to employees in an email from Discord CEO Jason Citron on Thursday. These latest cuts follow a round in August of last year that saw approximately 4% of staff let go.
While Citron says a lot about the “why” of these layoffs, the gist of it is summed up succinctly in this paragraph:
“We grew quickly and expanded our workforce even faster, increasing by 5x since 2020. As a result, we took on more projects and became less efficient in how we operated.”
On the plus side (if there is one about a layoff), the company still has around $700M USD in cash on hand from the estimated $1B it collected from investors…
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People on the Move
Here are the latest movers and shakers in esports and gaming:
Esports:
Gaming:
In Other News:
??Raidiant named tournament partner for Verizon Valorant Game Changers.
???? Walmart partners with Unity.
?? Riot Games bans suspected Game Changers cheaters.
?? E-Go App and GRID collaborate on League of Legends Esports data.
?? Tencent cooled on gaming investments in 2023.
?? SMITE brought in big sponsors for annual championship, SMITE 2 announced.
?? Tencent reveals partnered teams for PUBG Mobile SEA esports.
?? Free Fire 2024 esports roadmap revealed.
?? Honor of Kings 2024 roadmap revealed.
?? Gearbox-owned studio sees massive layoffs.
?? Ubisoft reveals new games subscription scheme.
?????? Farming Simulator esports returns in 2024.
?? Egypt gets a payment partner for PUBG Mobile.
?? "The only way to do great work is to love what you do." - Steve Jobs. It's fantastic to see you're expanding your reach and following your audience's guidance! ?? Speaking of making big moves, did you know there's an upcoming sponsorship opportunity for the Guinness World Record of Tree Planting? It could be a great chance for visibility in a record-breaking event! ??? Check it out: https://bit.ly/TreeGuinnessWorldRecord
Thrilled to hear you're expanding your sharing platforms! ?? As Helen Keller once said, "Alone we can do so little; together we can do so much." Your newsletter is a beacon for the esports and gaming world. Check it out, folks, you might just find yourself a part of the narrative! ?????
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